Jonathan Gruber: Health Reform In Mass. Has Been An Enormous Success

One of a series of analyses on the 10th anniversary of the 2006 Massachusetts health care overhaul. Jonathan Gruber is a Ford professor of economics at MIT. He was a key architect of the Massachusetts health reform and an adviser to President Obama on the Affordable Care Act.

One of the most difficult aspects of evaluating the success of health care reform, either in Massachusetts or nationally, is constructing the correct “counterfactual."

Take, for example, employer-sponsored insurance premiums in Massachusetts. According to the latest available government data, Massachusetts has premiums for family insurance plans that are 6.3 percent higher than the national average. Does this mean that, eight years out, health reform in Massachusetts had caused high employer premiums? Of course not, because before reform, in 2005, Massachusetts had premiums that were 6.6 percent higher than the national average! From 2005 to 2014, family premiums rose by 55 percent nationally -- and by 55 percent in Massachusetts. These figures illustrate the importance of carefully comparing what happened in Massachusetts in the wake of reform to what would have happened otherwise -- accounting both for where Massachusetts started, and what happened in other states.

Jonathan Gruber (Courtesy)
Jonathan Gruber (Courtesy)

There is now a host of economics research which carries out this type of careful comparison, and the results are clear: Health care reform in Massachusetts raised insurance coverage, improved health and financial security, improved the efficiency of health care, lowered premiums in the non-employer market, and had no meaningful impact on employer-provided insurance coverage or premiums.

Let’s start with the clearest finding: increases in health insurance coverage.  Health insurance coverage has grown much more rapidly in Massachusetts than would be expected based on trends either nationally or in neighboring states. And most strikingly is that this growth has been in both public and private coverage -- the long-feared “crowdout” of employer-sponsored coverage did not emerge, perhaps due to the strength of our individual mandate.

This growth in insurance coverage has been shown repeatedly to lead to improved health outcomes in Massachusetts relative to other states. Numerous studies show improvements in both self-assessed and objective health measures. Perhaps most striking is a 2014 study that found that health care reform avoided over 300 deaths per year in our state. Other studies show that this may be partly due to a shift toward more preventive care and less avoidable hospital care in our state, along with a reduction in emergency room visits over time.

Studies also show that premiums in the individual insurance market fell precipitously with reform, by almost 50 percent relative to trends in other states. But as noted above this was not marked by a rise in premiums faced by employers or overall health costs in our state, relative to others.

In summary, when evaluating health care reform, it is always necessary to carefully consider what might have happened without reform. But in this case such careful consideration agrees with simple observation: Health care reform in Massachusetts has been an enormous success.


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