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Tuesday, July 10, 2012

Can looking at Massachusetts tell us the impact of the Affordable Health Care Act?

      Thanks to Massachusetts we can see the impact of the Affordable Health Care Act (AHCA) when (and if) it is fully implemented.  Even though much of the AHCA will not be implemented until January 1, 2014 we can see how the law in Massachusetts has worked out six years after implementation.  Not surprisingly even the analysis of the the Massachusetts law can be viewed through a partisan lens.
     One big difference in the Mass. (I have to start abbreviating that word) law was the penalty for not signing up for health insurance.  In Mass you lost your personal exemption on their state income tax form.  This is a much larger penalty than the one in the AHCA law.  Today Mass has the highest rate of coverage for its population than any other state--98% for the adult population and 100% for children.  This compares with 23% of Mississippi's residents without health insurance--the worst in the United States.

A summary of the impact was described in the National Bureau of Health Research:

".....the Commonwealth’s health insurance reform reduced the number of uninsured among the inpatient hospital population by 36 percent. The reform increased coverage most among: young adults and the near elderly, men, people from the lowest-income zip codes, and people identified as black and Hispanic. "
      "Insurance coverage through Medicaid, the state-run federal program designed for low-income people, expanded by approximately 30 percent among nonelderly residents of Massachusetts. The largest change occurred in 2006 and the first half of 2007, immediately following passage of the new law. The researchers note that some of the Medicaid expansion appears to have crowded out private coverage, which decreased among the hospitalized population by almost 4 percentage points during the same period. CommCare, a new state-subsidized program for insuring low-to- moderate income residents, began covering 1.2 percentage points of the hospitalized population, also suggesting some crowd-out of other coverage for those individuals."

      "Coverage through Medicare, which provides insurance for those over age 65, did not change significantly in the elderly population. And, after the reform, the total number of newly insured and their doctors apparently did not demand more inpatient care. In fact, after the Massachusetts reform, treatment intensity -- as measured by length of hospital stays -- decreased by approximately 1 percent."

    "Use of hospital emergency rooms for routine care also declined after 2006: the reform’s expanded insurance coverage resulted in a 2 percentage point decrease in the fraction of hospital admissions from the emergency room. The reduction in emergency admissions was particularly pronounced among people in low-income areas of the state."

      "Hospital admissions for treating preventable conditions also fell. The authors find a decrease of 2.7 percentage points in inpatient admissions attributable to preventable conditions.
The authors note that the Massachusetts mandate for individual insurance coverage widened access to outpatient treatment and thus management of preventable conditions. Despite finding other hospital impacts, this study finds no evidence that hospital cost growth increased following the reform" 

On the other side of the political perspective is the conservative Cato Institute that many focuses on the lack of controlling health care costs in Mass:

"The Massachusetts plan might not have achieved universal coverage, but it has cost taxpayers a great deal of money. Originally, the plan was projected to cost $1.8 billion this year. Now it is expected to exceed those estimates by $150 million. Over the next 10 years, projections suggest that Romney- Care will cost about $2 billion more than was budgeted. And the cost to Massachusetts taxpayers could be even higher because new federal rules could deprive the state of $100 million per year in Medicaid money that the state planned to use to help finance the program."

"Given that the state is already facing a projected budget deficit this year, the pressure to raise taxes, cut reimbursements to health care providers, or cap insurance premiums will likely be intense. Romney likes to brag that he accomplished his health care plan "without raising taxes." Unless something turns around, that is not likely to be the case much longer."

"Moreover, the cost of the plan is also likely to continue rising, because the Massachusetts reform has failed to hold down the cost of health care. When Romney signed his plan he claimed "a key objective is to lower the cost of health insurance for all our citizens and allow our citizens to buy the insurance plan that fits their needs." In actuality, insurance premiums in the state are expected to rise 10–12 percent next year, double the national average."

   It is probably fair to say that the AHCA will be more successful in expanding health care coverage then controlling health care costs. It remains to be seen how many of the Republican Governors turn down the Feds money to expand Medicaid and this can have a major impact on the expansion of the health care coverage provided by the Act. Controlling health care costs is probably only possible in the long term by identifying and reducing the amount of  unnecessary health care being provided today.

Think you know what is in the Affordable Health Care Act?  Take the quiz. 

P.S. 2
     Almost a perfect correlation between the states planning on taking or not taking the federal dollars to expand Medicaid coverage and the health the States residents.  States planning on taking the expanded dollars and among the most healthy states are Vermont (1), Connecticut (3), Hawaii (4), Massachusetts (5,RomneyCare?) Minnesota (6) and Rhode Island (10).  State indicating they plan on refusing the expanded dollars and their ranking as unhealthy are Mississippi (1), Louisiana (2), Texas (7), South Carolina (6) and Nevada (9).  

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