Massachusetts’ health reform plan is going to cost far more than projected – $1.35 billion annually within three years. That’s compared to the original estimate of $725 million.
That’s bad, right?
Actually, it’s not all bad.
Projected costs are increasing primarily because enrollment is much higher than anticipated – and ultimately will likely be more than two times projections. It appears officials significantly underestimated the number of residents without health insurance, and those without coverage have signed up faster than expected.
I’ll admit to being one of the naysayers – my take was the per-employee penalty of $295 was not going to be enough to encourage employers to offer coverage – and I’m happy to be wrong. The other related criticism (but not from me) had to do with ‘crowd out’ – employers might drop coverage if their workers could obtain it from the Connector (Mass’ name for the health plan buying entity). That doesn’t appear to be a problem either, at least not yet. A relatively small percentage of employers are going to drop coverage this year – a percentage not materially different from employers in other states.
So far, it looks like the reform plan is succeeding in getting more folks covered. But, the program has not met its goals for cost reduction or reduced payouts for indigent care. While the strong enrollment numbers are great, the tough part now starts – and controlling costs is going to be a lot tougher than enrolling members.
Feb
7
