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This wasn't supposed to happen by those who advocated government mandated universal healthcare.
"WHEN Massachusetts forged ahead with a plan for universal health coverage for all its citizens, many were sceptical. It will soon be clear whether the doubters were right. The plan faces its first big test this month: uninsured residents must sign up for a health plan by the end of the year or be fined.
Early signs suggest the plan is going well. Some critics had argued that it would not achieve universal coverage because the penalties for non-compliance (about $220, though this figure will rise sharply next year) were too small, but this week state officials announced that some 300,000 had already signed up. That is roughly half of the state's uninsured population, reckoned to be between 500,000 and 700,000. However, many of those who have recently signed up are poorer people whose new insurance is being subsidised, so the real test is yet to come.
Another worry has been that the scheme will “crowd out” the private sector by encouraging employers to drop coverage. Here too the evidence is positive, though tentative. Several surveys of employers suggest that very few so far (only 3% according to one poll) have stopped covering their workers.
The news on cost is less encouraging. Over the long haul, universal coverage schemes are supposed to reduce costs (see article). Another reason to think cost rises would slow down under the Massachusetts scheme is the “Connector”, a government-created and partly-subsidised market-place for insurance products that aims to beg, bully and badger health-care providers and insurers into containing costs.
That is a fine theory, but in practice, concedes Jonathan Gruber, a professor at MIT and an architect of the state's reform plan, “We're struggling with this.” Next year's insurance premiums are likely to rise by 10-12%, confirms James Roosevelt, head of the organisation representing the state's health plans. Officials running the new health-reform effort this week declared grandly that costs must not increase by more than 5% next year—but, as Mr Roosevelt observes, that seems “more hopeful than likely”. Mr Gruber explains that the state can influence rates for those who get subsidies, but says that commercial insurers can do pretty much what they like about rates for the rest of the population.
If costs continue to soar, the state will not be able to afford this scheme for long, and it will become unpopular. Mindful of the brewing storm, the state's insurers are launching a charm offensive. Mr Roosevelt's group promises much greater transparency in insurance pricing and wants hospitals to do the same. Will that be enough? Sunlight is a powerful disinfectant—but it may meet its match in health-care inflation."
http://www.economist.com/world/na/displaystory.cfm?story_id=10254606
"WHEN Massachusetts forged ahead with a plan for universal health coverage for all its citizens, many were sceptical. It will soon be clear whether the doubters were right. The plan faces its first big test this month: uninsured residents must sign up for a health plan by the end of the year or be fined.
Early signs suggest the plan is going well. Some critics had argued that it would not achieve universal coverage because the penalties for non-compliance (about $220, though this figure will rise sharply next year) were too small, but this week state officials announced that some 300,000 had already signed up. That is roughly half of the state's uninsured population, reckoned to be between 500,000 and 700,000. However, many of those who have recently signed up are poorer people whose new insurance is being subsidised, so the real test is yet to come.
Another worry has been that the scheme will “crowd out” the private sector by encouraging employers to drop coverage. Here too the evidence is positive, though tentative. Several surveys of employers suggest that very few so far (only 3% according to one poll) have stopped covering their workers.
The news on cost is less encouraging. Over the long haul, universal coverage schemes are supposed to reduce costs (see article). Another reason to think cost rises would slow down under the Massachusetts scheme is the “Connector”, a government-created and partly-subsidised market-place for insurance products that aims to beg, bully and badger health-care providers and insurers into containing costs.
That is a fine theory, but in practice, concedes Jonathan Gruber, a professor at MIT and an architect of the state's reform plan, “We're struggling with this.” Next year's insurance premiums are likely to rise by 10-12%, confirms James Roosevelt, head of the organisation representing the state's health plans. Officials running the new health-reform effort this week declared grandly that costs must not increase by more than 5% next year—but, as Mr Roosevelt observes, that seems “more hopeful than likely”. Mr Gruber explains that the state can influence rates for those who get subsidies, but says that commercial insurers can do pretty much what they like about rates for the rest of the population.
If costs continue to soar, the state will not be able to afford this scheme for long, and it will become unpopular. Mindful of the brewing storm, the state's insurers are launching a charm offensive. Mr Roosevelt's group promises much greater transparency in insurance pricing and wants hospitals to do the same. Will that be enough? Sunlight is a powerful disinfectant—but it may meet its match in health-care inflation."
http://www.economist.com/world/na/displaystory.cfm?story_id=10254606
