BoGlo Proclaims RomneyCare Successful at Transferring Wealth from Consumers to Big Health Care

Okay, I’m getting ahead of myself.

The central thesis of this Boston Globe article is not, in fact, that RomneyCare effected a wealth transfer from consumers to big health care.

Rather, the article proclaims that RomneyCare “achieved its main goals.” But nowhere in the 4,600+ word article does it treat “ensuring MA residents get access to health care” as one of RomneyCare’s goals. Instead, it reports on RomneyCare’s great success at ensuring MA residents get health insurance. And given the article’s admission that the cost of the program is unsustainable, the distinction is critical.

Particularly given two of the article’s more interesting details. First, there’s this passage, which makes it clear that the health insurance exchanges have done little to lower health insurance costs for small businesses.

What group is most unhappy about the changed health care landscape in Massachusetts?

Small business owners, in a landslide.

“I’d give it an ‘A’ for access and an ‘F’ for cost and small business fairness,’’ said Jon B. Hurst, president of the Retailers Association of Massachusetts. “We were supposed to get rid of the free care pool and get all these young folks insured, and that was going to bring costs down.

“Instead, what we did was a wealth shift from consumers and small businesses to big health care in the state, which is not a surprise given who was pushing the bill all along — the biggest hospital chain and the biggest insurer,’’ Hurst said, referring to Partners HealthCare and Blue Cross Blue Shield of Massachusetts.

Partners, because of its market clout and ability to negotiate higher rates from insurers, has been blamed by some for helping to drive up medical costs. The company has said its prices reflect the complexity of care provided by its physicians and teaching hospitals.

The retailers association surveys of its 3,200 members showed a 15 percent average increase in recent years in insurance premiums — a ruinous long-term trend.

Plans offered to small businesses through the connector offer no greater savings than those in the broader commercial market and are limited to a few smaller insurers, said Hurst.

Dick Powers, spokesman for the connector, said in an e-mail: “The value proposition we bring to the table is the ability for small businesses to easily shop on our website and make apples-to-apples comparisons among the plans.’’ [my emphasis]

Dick Powers sounds an awful lot like Ezra Klein, now backing off the claim that exchanges do anything to lower costs to the consumer. And the problem is one that exists at the national level: sufficient concentration such that the big players can use mandates as an opportunity to jack up costs on captive consumers.

Note too Hurst’s suggestion that part of the problem is that the free care pool has not, as promised, been eliminated. BoGlo admits there’s some funny accounting on this front: while RomneyCare supporters claim the cost of providing care to the uninsured has dropped $236 million or 36%. hospitals and state fine print say it has dropped only around $111 million or 17%.

Has the overhaul reduced, as predicted, the quantity and cost of so-called free care provided at safety-net hospitals and health centers?

Yes, but the numbers are rising again.

Before the new law, the cost of treating the uninsured was $656 million in fiscal 2006, a report by the office of administration and finance says. This year it’s carried on the state’s balance sheet at a projected $420 million, which makes it look like there has been a significant drop in this costly category of care.

But it leaves a false impression.

The Massachusetts Hospital Association says those figures do not reflect all the costs they absorb by treating uninsured patients. The real cost was $70 million more last year and about $120 million more this year, they say.

In the fine print of its budget submissions, the Patrick administration estimated the Health Safety Net fund shortfall, which hospitals must absorb, at between $100 million and $125 million this fiscal year and between $100 million to $150 million next. The shortfall represents the cost of services to the uninsured beyond the available funds in the account, which is largely financed by hospitals and insurers with smaller amounts from the state and federal governments.

The full cost of treating the uninsured, if the hospital group’s estimates are accurate, is more like $540 million this year and $580 million next, and slightly less if the administration’s numbers are on target. In either case, it’s a lot more than the $420 million supporters of the law often point to as evidence of the program’s success.

And the total is growing, for reasons not fully understood, though state officials believe the effects of the weak economy have had a significant impact.

If RomneyCare brought the number of uninsured from 530,000 or 6.4% of MA’s total population down to 120,000 or 1.9% (these numbers don’t add up because BoGlo cites different stats here)–if RomneyCare succeeded in getting three-quarters of the uninsured insurance–then shouldn’t the cost of treating the “uninsured” go down more than 17% (even admitting that the remaining uninsured may have the highest medical costs)?

Or is it possible that some of the confusion arises when hospitals provide free care to those with insurance who can’t afford to pay for necessary care–as we know is the case for a substantial number of MA residents?

Because if that’s the case, then in addition to giving small businesses a mandate but little help in keeping that mandate affordable, RomneyCare also forces people to use their last disposable income to pay insurance companies, while still forcing hospitals to treat those people without full compensation, which in turn means others still have to make up for the hospitals’ shortfall.

Again, I don’t know whether that’s what is going on. I don’t know how MA accounts for the care provided to people who have insurance but can’t afford to pay for health care (remember, though, that the bulk of these people are still just forgoing medically necessary care).

But it seems like so long as you have a mandate but measure success solely by whether or not people have insurance, than you are going to end up with a wealth transfer to big health care without, at the same time, ensuring people can actually get health care.

19 replies
  1. donbacon says:

    Yes, the principal question should be on the deliverance of required medical care and not on the deliverance of insurance. That was the main point of Moore’s “Sicko”, where all the unhappy people HAD insurance but were denied care. The insurance companies employed “denial executives” to make sure that that happened.

    Another question relates to the mandate and its purpose — to reduce the cost of medical premiums.

    “By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums.”

    Were health insurance premiums lowered in Massachusetts?

  2. emptywheel says:

    One thing I should have noted. If hospitals are eating the costs of treating people who can’t afford care, it ALSO means that those people are still undergoing financial crisis to pay for care, since the hospital is only going to pay for care if the patient ends up not paying.

    • bmaz says:

      Right. And, same as always, the hospitals and providers just quickly send it to their dedicated collection agents who hound the people to death and, if they think there are any assets whatsoever worth attaching, file suit (many, if not most, of which they get default judgments on).

  3. greenharper says:

    EW, thanks for highlighting this travesty!

    Massachusetts health insurance costs are off the charts. A few years ago I met a 64-year-old Mass. attorney who told me that he was looking forward to getting on Medicare. His health insurance, he told me, cost him about $2,000 a month. Yes, a month.

    I’ve seen reports that as many as 20% of Mass. residents with health insurance can’t afford to use it, but have found no links in a quick search.

    We can’t get single-payer Medicare for All fast enough in Massachusetts. Or anywhere else, for that matter.

  4. kafka says:

    That was the whole idea behind RomneyCare – turn people into captive consumers of Health Insurers. Now with ACA, we’ll see the same thing in all the other 49 states. You can thank you DEMOCRATIC WHORES in CONgress for this gift.

    • uneasyone says:

      Yup. Kucinich nailed it when he called it “The Health Insurance Industry Protection Act.” Shortly thereafter, he voted for it.

  5. HelenaHandbasket says:

    If health care exchanges in MA haven’t contained the rising cost of insurance premiums, what about the federal government employees exchanges, that the rep’s and senators partake in? What is their history of premium increases? IIRC after 2014, us citizens would get the ‘same coverage’ our elected reps get.

    After the past years of “moderate” increases in my individual policy of 20 to 30%, a “ruinous” 15% increase almost sounds like a blessing.

    Maybe the overturning of the PP&ACA will only hasten the day of single payer health care.

    • greenharper says:

      Without having the numbers at my fingertips, the federal gov’t health insurance rate increases have been modest, maybe a couple of percent, if they went up at all. I’ve been on federal gov’t insurance as both active employee and retired.

      • uneasyone says:

        I don’t have the numbers at my fingertips either, but my wife and I are on one of those plans also, and the increases have been anything but “modest.” Not to mention that co-pays are up about 400% in the last 10 to 15 years.

    • maa8722 says:

      “. . .Maybe the overturning of the PP&ACA will only hasten the day of single payer health care. . .”

      Kucinich said as much last fall.

      The GOP agenda is to scotch ACA, period. The House would not be expected to help make ACA “better” or “correct” any of the sundry inadvertant defects in the existing legislation. They’re out to kill it, and such problems will be seen as fodder in the GOP’s playbook.

      Also, the single payer project under consideration in Vermont would need waivers and Fed legislation to tweak ACA. HHS can do waivers, but it cannot change ACA — again, the House would be expected to stop it.

      Kucinich’s point was that over time the GOP will see diminishing political returns with their hostile stance. They may unintentionally open the door to single payer nationwide which would be better. Or it may become an even worse mess than we have now.

      It seems the only way to fix this stuff and move forward is for Dems to take back the House and keep the Senate and White House. Is that too much to expect?

      In the meantime there are getting to be too many dragons out there. ACA may collapse under its own weight, by court challenge, or more direct action from the GOP if they snatch more power in 2012. I wouldn’t bet on ACA staying put.

  6. liberalarts says:

    If I remember right, Obama went to Ohio to campaign for Dennis and embarrassed the hell out of him at the rally by calling him out to vote for the bill. Shitty move, Barack.

  7. donbacon says:

    If health insurance premiums increased rather than decreased in Massachusetts then the whole basis for the PPACA mandate is a fiction.

  8. regulararmyfool says:

    The Boston Globe is run by the same pack of thieving lying Ochs/Sulzberger’s that control the NYT.

    The sports section might be reliable. All else is directed by the servants of this inbred family of Ochs/Sulzberger’s. Premier leaders of the oligarchy and filthy rich to the 1,000th generation.

    The Boston Globe is not a “news” paper and should never be quoted without qualifying the source as propaganda.

  9. kall says:

    “Instead, what we did was a wealth shift from consumers and small businesses to big health care in the state, which is not a surprise given who was pushing the bill all along — the biggest hospital chain and the biggest insurer,’’ Hurst said, referring to Partners HealthCare and Blue Cross Blue Shield of Massachusetts.

    Coming soon, to an “Affordable Care Act” near you…

    It was embarrassing watching the Great Orange Satan et. al celebrate being led off the cliff.

  10. David65 says:

    I’m a Mass resident and saw reports disapointment that ER use has not gone down.
    As a user of HC with medicare and State Funded supplemental Ins. ( Wife worked in State System) have only seen Ins premiums rise and if anything quality of Ins use decrease, i.e. far more time consuming back and forth with Ins. to obtain coverage(payment) than before HC in MA was introduced. If I were to give a grade on the current state of affairs in MA it would not be a passing grade.

  11. JamesJoyce says:

    So how many folks understand the underlying tax structure of the health insurance industry in Massachusetts? How many folks comprehend ‘tax exempt public charity status for a corporation like BCBS who then pays and 11 million dollars to an exiting exec? Since the former speaker of the house was just convicted, I wonder what went on between the Beacon Hill leadership and the tax exempt not for profit health insurers who now are ENTITLED to your hard earn money, under fear of a punitive tax penalty levied against the consumer, while BCBS, a tax exempt public charity, has 11 million dollars to pay an exec. Not the first time either! BULLSHIT!!!!!!!!!!!!!!!!!!!!!!

    This is not healthcare reform. This is protecting corporatism, at the expense of life and liberty. I say abolish HEALTH INSURANCE Corporations, as slavery was abolished. The new American Life Tax, to be paid to corporation. Meanwhile who makes those contributions to the law makers??????????? I call it servitude, bought and paid for with campaign contributions. Just what Jefferson feared?

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