Argument: Mandatory health insurance has failed in Massachusetts
Paul Hsieh. "Health care in Massachusetts: a warning for America". Christian Science Monitor. September 30, 2009: "Three years ago, Massachusetts adopted a plan requiring all residents to purchase health insurance, with state subsidies for lower-income residents. But rather than creating a utopia of high-quality affordable healthcare, the result has been the exact opposite – skyrocketing costs, worsened access, and lower quality care."
Paul Hsieh. "Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America". The Objective Standard. Fall 2008: "The Results in Massachusetts
Although advocates of the Massachusetts plan claimed that it would lower health care costs and achieve universal coverage, it has done neither. Instead, the plan has increased costs for individuals and the state, reduced revenues for doctors and hospitals, and left Massachusetts officials in the awkward position of having to admit that their “universal coverage is not likely to be universal any time soon.”14
Costs have risen for individuals because, under this plan, as under any mandatory insurance scheme, the government must define what constitutes an acceptable insurance policy. As a result, special interest groups have been given both the incentive and the means to lobby politicians to include their pet benefits as part of the government-approved plan. Consequently, the state government requires all patients to purchase “benefits” that are useless to many of them—benefits they would never voluntarily choose to purchase in a free market. For example, Massachusetts currently requires insurance plans to include forty-three mandatory benefits, including in vitro fertilization, blood lead poisoning treatment, and chiropractor services—whether or not customers want them. Residents must purchase alcoholism therapy benefits, even if they are teetotalers. These mandated benefits have raised the costs of health insurance in Massachusetts by 23 to 56 percent.15
Costs to the state government have skyrocketed and are projected to run hundreds of millions of dollars over budget.16 Because the mandated insurance is so expensive, the government has had to subsidize the costs of the premiums not only for lower-income residents, but also for residents with incomes as high as $60,000 for a family of four—which is three times the Federal Poverty Level.17 The state had expected a “significant drop in spending . . . for the uninsured” but has since acknowledged that this “is not going to happen to any large extent in 2009.”18 Instead, overall costs to the state have risen by more than $400 million, 85 percent more than originally projected.19
Because of its own rising costs, the state government has cut payments to doctors and hospitals. According to family physician Dr. Katherine Atkinson, the state insurance reimbursements often do not cover her expenses: “[E]very time I have a Medicaid patient it’s like handing them a $20 bill when they leave.”20
As a result of these rising costs and falling revenues, access to medical care has dwindled for many patients. Fewer doctors are willing to take on new patients for fear of losing even more money. Lee Sampson, a 47-year old medical transcriptionist, had to call fifty doctors’ offices before she could find one that would take her as a new patient.21 Tamar Lewis, a 24-year old hair stylist, called more than two dozen primary care doctors for a checkup. All of them turned her down, leaving her with no choice but to rely on the community free clinic.22 Patients face long waits for basic medical care—in some cases more than a year for a routine physical exam.23 These long waits are not due to a shortage of doctors. As the New England Journal of Medicine notes, Massachusetts “has the highest physician-to-population ratio of any state, in primary care as well as overall.”24 The waits are due to a government policy that discourages physicians from seeing patients—a policy under which seeing patients can mean that physicians lose rather than make money.
Advocates of the plan often claim that the program has succeeded because it has decreased the number of uninsured patients.25 In so doing, however, they commit the common error of conflating insurance “coverage” with medical care. The government can make endless promises of theoretical “coverage,” but this is not the same thing as guaranteeing actual health care. As Dr. H. Carroll Eastman, medical director of the Joseph M. Smith Community Health Center, confirms: “[W]e don’t have more doctors, but we have lots more patients”—and the new patients have to wait two to three months for an appointment.26 These patients know the difference between “coverage” and care.
The Massachusetts plan has created similar problems with access to dental services. Although the state theoretically guarantees dental coverage for nearly 700,000 previously uncovered low-income residents, many of them are having a difficult time getting access to actual dental care and often must wait months for an appointment. According to dentists, the state reimbursement rates for adult patients cover only half their costs, and the paperwork is a “nightmare.” Massachusetts dentists are therefore understandably reluctant to accept these patients. As Dr. Michael Wasserman says: “[I]f a dentist is going to treat these patients he or she should not be forced to lose money.”27 Once again, “coverage” does not equal actual care.
Access has also declined for those who were supposed to be helped the most—the “poor” and indigent. The Cambridge Health Alliance, which provides medical care to indigent patients in the Boston area, announced that due to rising costs it is facing a “catastrophic” loss and will have to fire staff, cut services, and “limit referrals to [outside] specialists” in order to remain financially solvent.28
These problems will only worsen. For individuals, insurance prices in Massachusetts will rise 10 to 12 percent next year, twice the rate increase of the national average.29 Costs to the state will also continue to rise. The state subsidies are expected to double over the next three years, and the state has asked the federal government to help make up the shortfall of hundreds of millions of dollars.30 Some analysts predict that the Massachusetts plan will ultimately cost the state more than three times the original estimates.31 The state is also considering raising taxes and requiring businesses, hospitals, and insurers to pay more to fund the program.32 Finally, the state plans to slash payments to doctors and hospitals an additional 3 to 5 percent, which will make it even harder for patients to find physicians willing to see them. [...] In other words, the plan is a fiasco."