In the Arena

Health Care: Apocalypse Not

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Really good piece in the Washington Post by Ezra Klein today, checking in on the Massachusetts universal health care system–better known as Romneycare, the precursor of Obamacare. Overall, the system is working well. 98% of the state’s residents are covered; 99% of the state’s children. The cost of health care continues to rise, with the exception of one very important sector:

Like the federal law, the Massachusetts law left most people’s health arrangements alone. The exception: people who don’t get their coverage through a large employer or a public program. That accounts for most of the uninsured. It’s also where the individual mandate is primarily in play and where the “exchanges” – the purchasing markets that put individuals and small businesses in a single pool and force insurers to compete for their business and treat them fairly – really matter.

In Massachusetts, that market has worked better than expected. According to data from America’s Health Insurance Plans, the largest health insurer trade group, premiums for that market have fallen by 40 percent since the reforms were put in place. Nationally, those premiums have risen by 14 percent.

There are a couple of reasons for Massachusetts’s success. One is that the market is more transparent, and so insurers are competing more aggressively against one another. Jon Kingsdale, who ran the new health-care market, notes that the lower-cost plans have been much more popular than the higher-cost plans. The bigger reason is that the individual mandate – plus the combining of individual and small firms in the same insurance market – brought healthier, younger people into the mix, which brought average premiums down for everybody.

This is a crucial finding. And it points the way toward a further reform of the federal law: instead of dumping most of the working poor into Medicaid, the law should be amended to include those people in the exchanges. Granted, the poor have a higher incidence of ill health than the general population, but that can and will be mitigated over time if they have health plans that require annual check-ups and give them access to preventive care.

All in all, the Massachusetts results would be good news–if Republicans operated on the basis of “news,” rather than ideological fear-mongering, on this issue. Indeed, the Massachusetts results confirm a basic Republican principle: the efficacy of markets. As well as a pragmatic liberal principle: the necessity for mandatory participation by all.

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