About two years ago, Massachusetts implemented a health care reform scheme very similar to the one being proposed in Washington. Everyone would be forced to buy insurance. If they couldn’t buy insurance, the taxpayers would pay for it. Since everyone would now be insured, health care providers wouldn’t get stuck with expenses for the uninsured anymore. This was supposed to result in cost reductions. A hospital wouldn’t have to charge paying customers more to compensate for those who didn’t pay. Insurance rates would fall but the total amount of money collected by insurance companies would remain about the same (more customers times less money).
How did it work out? Todays Boston Globe story “Health costs to rise again” show that we succeeded in getting more people into the system as paying customers. Prices, however, will rise by about 10 percent and will be the highest in the United States (and therefore the world). They will be double what they were in the year 2000:
“State health care reform has had some unexpected results,’’ suggested Tim O’Brien, senior vice president at Blue Cross Blue Shield’s headquarters in Boston. “The actual costs have been much higher than what were anticipated when health care reform went into effect in 2007.’’
The article mentions that a state commission proposes paying HMOs for annual care rather than for individual procedures, just as proposed in my personal health care reform plan. However, no steps have been taken in this direction.
In the discussion of the costs of the Massachusetts reform, no calculations are typically made of the costs incurred by each taxpayer in the state in securing a certificate proving that he or she has paid for insurance, the costs of organizing that certificate in with one’s tax filings, the costs of the people at insurance companies who have to prepare and mail out these certificates (and replacements as necessary), the cost of postage for mailing, the salaries of people in state government who try to figure out if someone is breaking the law by not buying insurance, the pensions for those people, the salaries of government workers who dispute with taxpayers as to whether or not they have complied with the law, the accountants and attorneys that taxpayers hire to defend themselves agains the public employees accusing them of not complying with the law by buying insurance, etc., etc.