Except there's a problem. Her analysis is complete garbage. It starts and ends with an erroneous assumption: that the federal health care law and the Massachusetts law are virtually indistinguishable, as are the markets for health care. Her proof? The misleading media claim that President Obama's health reform law was "modeled" after the one in Massachusetts. That is true only to an extent, and the federal law provides far more patient safeguards and employs far more cost containment measures than the MA law. We will explore those differences in detail later in this article. However, first, I want everyone to be clear on something else: a model in this instance is like a template. Not everything based on the same template is created alike. If in your class your professor requires you to submit your papers written in APA style, everyone essentially has the same template. Yet, some people in the class get an A on the paper and others get a D-. All things done following the same template are not created equal.
Our media does us a tremendous disservice by describing something as a "model" for something else and making it seem like the two are one and the same. That's the problem here. We keep hearing this vague assertion about how the federal health reform law is "modeled" after the MA law, without understanding the details of either, much less the differences between the two. So today, we are going to try find out what the differences are, and just what the impact of those differences are likely to be in differentiating the outcomes of the two.
Required minimum standards: MA had none till 2009, and even then it's weaker than the federal law.
The American Journal of Medicine study cited by Eve Gittelson to make her shaky case on medical bankruptcies uses data for bankruptcies in Massachusetts for 2009. This is quite an interesting year given that the the minimum insurance standards (known as "credible coverage" standards) went into effect in Massachusetts that very year, meaning that till December 31, 2008, junk underinsurance policies were just fine. As anyone familiar with personal finances knows, bankruptcies do not usually happen due to one's financial situation in a single year (although it can). Especially medical bankruptcies more often than not are caused by years of medical bills piling up. So it is just sheer dumb to blame all medically related bankruptcies filed between January 1, 2009 and December 31, 2009 on the failure of health reform in MA to protect those filers. In MA, if you had a junk insurance policy in 2007 and 2008 and have been accruing bills, you were still responsible for them in 2009.
Now, I don't know if Gittleson simply does not know how to read data and interpret it, or if she's purposefully trying to turn it over its head. Either way, her analysis leaves much to be desired. It is also notable that even in this situation, medical bankruptcies dropped to about 52% of all bankruptcies in MA from 59% before any reform at all was instituted.
In addition to the fact that required insurance standards had not been in effect for most of the time the costs were incurred in those bankruptcies, even when the required standards did come into play in MA, they are far behind what is required by the federal law. What are these differences?
No free preventive care in MA: There is no requirement in the MA law that insurance companies cover preventive care for free, as the federal law does, for everyone. The federal law requires that no copay be required for preventive care, nor can payments be required for preventive care before one meets their "deductible" threshold. There is no such protection in the MA law, except for people at the poverty level. All others have co-pays.
MA provides subsidies for people only until 300% of poverty: MA only provides subsidies for people and families up to 300% of the federal poverty level. The federal law provides subsidies for individuals and families up to 400% of the federal poverty level. In other words:
Could a higher level of subsidization mean a greater level of financial relief, and thus a lower level of contributory medical cost to bankruptcies? Both common sense and arithmetic would seem to indicate so.
- Today, [in MA] an individual with a yearly income of more than approximately $33,000 does not qualify for a public subsidy for insurance. In 2014, the limit will be approximately $43,000.
- Today, [in MA] a family of four with a yearly income of more than approximately $66,000 does not qualify for a public subsidy for insurance. In 2014, the limit will be approximately $88,000.
Some of the other distinct differences include:
- A massive expansion of Medicaid to cover Americans up to 133% of poverty. Medicaid reimbursement rates are set by the government, so there is an inherent cost control. MA had no such expansion of fully public health care.
- $11 billion expansion of Community Health Centers: Not only do community health centers provide excellent preventive care and treatment at very effective and low costs, they also provide a meaningful competition to for-profit medical care. When the federal health reform's authorized expansion of the CHC's is complete, the capacity of the CHC's will be about twice the total number of uninsured at that time - for the first time ever. This means even those without insurance (which is a shame) will be able to obtain primary care and treatment, thus preventing a lot of delayed and more expensive medical costs, and thus (ahem) medical bankruptcies. The MA health reform law does not provide funding to expand community health centers.
- The federal reform ensures young adults up to age 26 can stay on their parents' plan. The MA law is more restrictive, in that parents can no longer keep their children on their plan two years after they stop claiming them as dependents (should that be reached before age 26).
- In MA, small businesses have a disincentive to cover their employees and instead to push them into the state's plan. Even with a fine, this is true. The federal law, however, already offers a 35% tax credit for small businesses to cover their employees, and in 2014, that credit will rise to 50%, incentivizing even more coverage. Small businesses may also participate in the exchanges beginning in 2014, but they are not so eligible under current MA law.
Massachusetts reform had been primarily focused on expanding coverage, not containing costs. The federal reform, on the other hand, takes real strides at containing costs (even if it could always do a better job) and providing real competition to for-profit care with the expansion of the community health centers (as opposed to just for profit insurance).
There are lots of measures in the federal law to share the responsibility of coverage between the private and public sectors, with a good eye on lowering the burden of medical bills on individuals and families. Is it perfect? Of course not. Is it going to mean the end of medical bankruptcies? No. But it will in all likelihood significantly lower those instances when fully implemented. Yes, if you are looking for everything to be fixed with the snap of a finger on January 1, 2014, you're at the wrong place. But things are and will change for the better, and in the right direction.
It may be true that the MA reform law and the national reform law rose from the same set of basic concepts: expand coverage and provide relief for individuals and families. But the two are not the same thing, and on top of that, the detractors are presenting misleading statistics at best - given, once again, that there were no requirement for minimum coverage until the year 2009 in MA. The biggest problem with an ideological, rather than practical, vision of reform is that it takes an all-or-nothing approach, ignoring the fact that progress has to be made in steps. In their zeal to "show" everyone how "right" they are, they grasp for straws anywhere they can, render themselves incapable of analyzing data, and in the process, inevitably hurt their own credibility. By all means, let's find ways to make reform better. That, however, is not accomplished by bad analysis and dumb comparisons.