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After initially asking for an 11% increase in its small group and individual health insurance rates, Neighborhood Health Plan has reached a settlement that allows them to raise those premiums by about 7%.
Neighborhood was one of six major Massachusetts health insurance companies that appealed and sued the state’s insurance commissioner when their proposals were denied in April. Now, they have bowed out of those efforts.
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For now, this is only happening in Massachusetts, but it could spread nationwide: hospitals are now required to make a one-time contribution to a fund that subsidizes the purchase of health insurance plans by small businesses. They will pay the insurers directly, and the health insurance companies will refund eligible businesses for two years.
After only one major hospital system–Partners HealthCare–agreed to contribute voluntarily, the State Senate President included a provision that forces them to pay $100 million to the fund. The amounts will be split based on the hospitals’ profit margins and the makeup of their patient populations.
According to supporters, small business health insurance premiums will drop by 2.5% as a result of the subsidy–although they acknowledge that it’s only a temporary solution. Detractors, including the Massachusetts Hospital Association, are worried that the mandatory assessments will negatively impact the finances of and quality of care from their facilities.
 Image: Rob Shenk under CC 3.0) |
What can the nation learn from Massachusetts about healthcare reform? There are several lessons that should be heeded to avoid their mistakes.
Massachusetts succeeded in providing health insurance to nearly 98 percent of it’s residents. Unfortunately, doing so has been extremely costly. That is a byproduct of appropriately funding the program to begin with.
The government must also work together with insurers to create more affordable health insurance options instead of vilifying them. The Massachusetts Connector is trusted and well liked as a result.
 Image: Massachusetts Charter Public School Association |
In a 10-year study period, beginning in 1999 and ending last year, the major health insurance companies in Massachusetts finished with a four-fold increase in their surplus reserves. By the end of the study period, their total surplus was $2.5 billion.
Consumers are worried that the soaring premiums over the past decade have gone toward those figures, and made it more difficult to find affordable health insurance. However, industry representatives claim that the reserves are necessary to make up for operating losses over the past year.
The state passed healthcare reform legislation midway through the study period. Its impact on the finances of Massachusetts health insurance providers was not explored by the investigation.
 Gov. Deval Patrick |
In Massachusetts, a recent report shows that healthcare spending on those with health insurance has risen by over 15% in three years. The state is one of the first in the nation to have enacted its own healthcare reform: theirs involves a health insurance mandate, coupled with government subsidies for lower- and middle-income individuals to increase access to affordable health insurance. The Senate has clearly taken their example as model for their bill.
Still, spending has continued unabated. Despite the mandate penalizing those who fail to buy health insurance, prices of health insurance plans have only increased. Some young, healthy people prefer to take the risk and pay a $1,000 annual fine instead of monthly premiums. That continues to leave older, sicker individuals in the risk pool–whom health insurance companies need to charge more in order to make a profit.
The state government’s report is a boon to Democratic Governor Deval Patrick, who wants the state to have the ability to cap health care prices. However, it also vindicates Massachusetts health insurance companies. It shows that at least some of their price increases are legitimately due to the higher cost of providing care. A higher percentage of outpatient care is being offered in expensive hospital settings, as opposed to less costly facilities. Spending in this category increased by over one-fourth, much of it passed onto consumers of health insurance.
Health care in Massachusetts, even with reform, is 15% more expensive than the national average. That figure can’t be entirely due to the higher cost of living in Boston! State legislators plan to hold a summit in March to get to the bottom of the issue.
Last week’s Nor’easter in Massachusetts stunned the Democratic party and created widespread panic. One likely consequence is that healthcare reform – Barack Obama’s signature initiative – will go down to defeat. Some would say reform of some sort is decades overdue. But not all Americans are convinced the effort must be abandoned.
Democrats could press on if they chose. The loss of their super-majority in the Senate is not decisive, after all. The party still controls the House of Representatives. If the House simply passed the bill which the Senate has already approved, the measure for mandating individual health insurance could go directly to President Obama’s desk.
But many Democrats in the House do not like the Senate bill and Liberals find it too timid. Moderates in swing districts, worried about November’s midterm elections fear it will lose them votes. Democrats aren’t simply sweeping their health plans under the rug; out of lack of conviction, they are choosing to surrender.
Democrats are looking at other options now, but options are tough to come by. Knowing full well these are likely to yield little or nothing of meaningful reform, aside from a bit more regulation, the bill is killed. You cannot guarantee availability of insurance coverage, for example, without an individual mandate to buy insurance: this would cause premiums to soar. Then, in turn, such a mandate requires subsidies. Once you start to pick apart the Senate bill, it unravels completely.
The president and most Democrats are simply tired and seem ready to let it all go away like a bad dream…If only we could get some sleep.
In the coming days, expect the Democrats to show they are listening to voters. It would be wrong to pretend that the Massachusetts election didn’t happen, of course. But popular opposition to healthcare reform is easily misinterpreted. It will be a very tight rope they will walk with the American public. But it may help their stance with voters to reassure their constituents that affordable health insurance is still available on the open market.
Though they ended up with a huge and expensive proposal, President Obama and his Democratic allies made a remarkable hash of getting there. The process was gruesome and the public support was non-existent. Voters have reason to be confused and fearful, and this is driving the polls. But there is no solid opposition to change. President Obama, after all, was elected largely on of comprehensive healthcare reform.
Sadly, it now looks too late for the president to exercise the leadership that was missing last year – in guiding the effort, in uniting his own party around a plan, and above all in assuring the public that it all made sense. No matter where you side on healthcare reform or the political party you affiliate with most, this whole mess gave everyone undeniable and decisive double-take on the Obama administration.
According to Al Franken, the public needs to experience healthcare reform before they fully support it. Such a statement may sound pompous and elitist from the comedian-turned-Minnesota Senator, but the Democrat isn’t minimizing the significance of Republican Scott Brown’s victory, or the impact that health insurance issues had on the Massachusetts race. Nor is he encouraging Democrats to push through a bill before the senator-elect–who won by a 52%-to-47% margin–is seated.
Franken is just pointing towards history: a Harvard study showed that while reform in the Massachusetts health insurance system was initially greeted with skepticism, 70% of the state’s residents were content with it. Only 11% of Massachusetts residents wished that the reforms were repealed today; granted, it is a generally liberal state. The results of the special election to fill the late Ted Kennedy’s seat belie those statements, except that Brown has not hid his initial support for healthcare reform in his state. The Massachusetts reforms are quite similar to those proposed by Democratic legislators in the Senate, but Brown believes that enacting a “one-size-fits-all” national program is wrong.
For what it’s worth, Franken also claims that Medicare was also initially unpopular. Of course, now it is a public program prized by senior citizens, albeit one plagued with some budget issues. Attempts to make some cuts in Medicare reimbursements were part of what has derailed general individual health insurance reform.
(Image: Official Senate Website)
Massachusetts Senator-elect Scott Brown has asked to be seated as soon as possible, in order to deliver the vote against health insurance plan reform that he promised. Democrats in Washington, D.C. have publicly agreed. Majority Leader Harry Reid (D-NV) has vowed to seat Brown as soon as the proper official paperwork is received. Democratic Senator Al Franken, who was unable to take his seat for several months due to a legal battle with his Republican opponent, also supported Brown’s speedy seating by invoking the Golden Rule: “Do unto others as they will do unto you.”
All of the well-wishes in the world, however, may not get Scott Brown on Capitol Hill any quicker. Standard Senate procedure would have him sworn in about two weeks from now, on February 3rd. That allows time for the state to tabulate absentee ballots and investigate for fraud. William Glavin, Massachusetts Secretary of State, promises to expedite the certification, which normally takes about 15 days in his state.
Depending on the final margin of victory, Glavin can declare Brown the unofficial winner; that way, Brown may be sworn in even quicker than expected. Senate Democrats have effectively decided to hold off on medical insurance reform votes until he arrives. The sooner Brown is seated, the sooner debate can continue.
(Image: ockam under CC 2.0)
New Massachusetts Senator Scott Brown is now most well-known for breaking a Democratic stronghold on the seat formerly held by the late Ted Kennedy. Just a few years ago, though, he was a regular state senator, as well as the proud parent of an American Idol contestant.
His daughter, Ayla Brown, narrowly missed the finals in Season 5. She was just 17 years old at the time. According to her official American Idol biography, her father is one of her role models. She also acknowledged him for his service in the National Guard. Ayla released an independent-label album before enrolling in Boston College and playing on their basketball team, while continuing to work on her music career. No doubt her student health insurance got put to good use! Scott Brown is also a devoted athlete.
Ayla was a prominent presence throughout Brown’s campaign, and was the first to announce his victory to supporters. While his opposition to health insurance reform was the driving factor behind his election, her local fame couldn’t have hurt. During his winning speech, Scott Brown informed the public that his now 21-year-old daughter is currently single, which resulted in her embarrassment!
Her music career has also received greater attention after Scott Brown’s win. She capitalized on her family’s increased by pledging to donate a portion of her album sales on election night to Haiti earthquake relief efforts.
Do you remember Ayla Brown from American Idol?
