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BHIPolicyStudyJune2011
TheHighPriceofMassachusettsHealthCareReform
DavidG.Tuerck,PhD
PaulBachman, MSIE
MichaelHead,MSEP
THEBEACONHILLINSTITUTEATSUFFOLKUNIVERSITY
8AshburtonPlace
Boston,MA02108
Tel6175738750,Fax6179944279
Email:[email protected],Web:www.beaconhill.org
B
eacon
HillInstitute
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TableofContentsExecutiveSummary.....................................................................................4Introduction..................................................................................................7
HealthCareReforminMassachusetts.................................................................................. 7CurrentCostEstimates.......................................................................................................... 10TheBHIEstimates.................................................................................................................. 13
Conclusion..................................................................................................19Methodology..............................................................................................20References...................................................................................................28AbouttheAuthors.....................................................................................31
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TableofTables&Figures
Table1:EffectofHealthCareReformonHHSandMedicaidSpending($m)............................................ 14Table2:EffectofHealthCareReformonHHS&MedicaidwithNationalGrowthRates($m).............. 14Table3:ReallocationofHHSandMedicaidSpending($m) .......................................................................... 15Table4:EffectsofHealthCareReformonAverageHealthInsurancePremiums ...................................... 16Table5:EffectsofHealthcareReformonTotalHealthInsuranceCosts ...................................................... 17Table6:EffectsofHealthCareReformonMedicareSpendinginMassachusetts..................................... 17Table7:EffectsofHealthCareReformonthePrivateSectorInsurancePremiums................................... 23Table8:StateHHSSpending($m)....................................................................................................................... 24Table9:StateMedicaidSpending($m)............................................................................................................... 24Table10:MedicareAdvantagePlanRate($perMonth) .................................................................................. 24Table11:MedicarePersonalHealthCareExpenditures($m) ......................................................................... 26Table12:InsuranceCosts,AverageSinglePlanPremium($perYear)......................................................... 26Table13:InsuranceCosts,AverageFamilyPlanPremium($perYear)........................................................ 27
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Executive Summary
In 2006, Massachusetts enacted landmark health care reform legislation that promised
toextendhealthcarecoveragetoallcitizenswhilesignificantlyloweringcosts. Thelaw
imposesmandatesonresidentstoobtainhealthinsuranceandonemployerswith11or
more employees to provide health insurance for their employees. It also expands
Medicaidcoverage and establishes a health insurancesubsidyprogram. Additionally,
itcreatesaninsuranceexchange,theMassachusettsHealthInsuranceConnector,which
helps individuals who are not eligible for Medicaid purchase competitivelypriced
healthplans.
Nowthatthelawhasbeenineffectformorethanfiveyears,wecanbegintoassessits
impact on the state of Massachusetts. Several studies have quantified the effect of
Massachusetts health care reform on the statebudget and health insurance premiums,
buttodatenostudyhassetouttocalculatetheaggregatecostofthehealthcarereformlaw.1
In this study, the Beacon Hill Institute at Suffolk University (BHI) attempts to fill the
gapbycalculatingtheeffectofhealthcarereformonstateandfederalgovernmentsand
theprivatehealthinsurancemarkets,includingemployeecontributionstotheirprivate
insuranceplans. Wefindthat,underhealthcarereform:
Statehealthcareexpenditureshaverisenby$414millionovertheperiod; Privatehealthinsurancecostshaverisenby$4.311billionovertheperiod; The federal government has spent an additional $2.418billion on Medicaid for
Massachusetts.
Overthisperiod,Medicareexpendituresincreasedby$1.426billion; Foratotalcumulativecostof$8.569billionovertheperiod;and The state has been able to shift the majority of the costs to the federal
government.
The federal government continues to absorb a significant cost of health care reform
throughenhancedMedicaidpaymentsandtheMedicareprogram. Healthcarereform
hasalsoincreased therateforMedicareAdvantage plansinMassachusetts,whichhascontributed to an increase in Medicare health care expenditures through prices for
medicalservicedelivery.
1SeeJohnF.Cogan,GlenHubbard,andDanielKessler,TheEffectofMassachusettsHealthReformon
Employer SponsoredInsurancePremiums,ForumforHealthEconomics&Policy13,no.2,http://www.bepress.com/fhep/13/2/5/(accessedDecember,2010).
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We estimate the effects of health care reformby comparing the actual value of each
variable with the value it would have had,based on recent trends, had health care
reformnotbeenimplemented. Weusetheyear2006(theyearreformwasenacted)and
year 2007 (first full year of implementation) as alternative event dates in separate
analyses. We also compare the growth in the expenditure variable in Massachusetts
aftertheeventdatewiththegrowthrateofthesamevariableintheUnitedStatesasa
whole, in order to exclude national factors that have contributed to the Massachusetts
growthrate.
Costcontainmentisoftenamajorgoalofhealthreformplans.However,thisparticular
health care reform legislation did not provide an effective means for containing costs.
Thepromiseofcostcontainmentrestedonavaguehopethatthenewlyinsuredwould
seek preventive care, access their primary care physicians earlier in their illness and
avoid costly emergency room visits. Yet, the number of emergency room visits rose
from2.351millionin2006to2.521millionin2009,orby7.2%overtheperiod. Thetotal
costofemergencyvisitshassoaredby36%overtheperiod,orby$943million.2
Underhealthcarereform,thestateHealthSafetyNetFund(HSNF),previouslyknown
as the Uncompensated Care Fund, which provides payments to hospitals and
community health centers for delivering care to the uninsured and underinsured, has
seen payments dropby about $250 million from FY 2007 to FY 2008. However, the
HSNF paymentsbegantorise againinFY2009,possiblyduetotherecession. Infact,
theHSNF experienceda shortfall of$100 to$125 millioninFY2011,meaning that the
hospitalsandcommunityhealthcentershadtoabsorbtheselosses.3
It is clear that the healthcare reform law sparked increases in private health insurance
premiums. Premiumsforplanscoveringasinglepersonroseby$284peryearby2009
andincreasedfamilyplanpremiumsby$2,504peryear.
The vast number of the newly insured residents in Massachusetts is responsible for
bottlenecksinthe primarycaresystemthatforcesresidentstoutilizeemergencyroom
care at a significantly higher than expected rate.4 However, the promise of expanded
2SeeOfficeofHealthandHumanServices,HospitalSummaryUtilization,
http://www.mass.gov/?pageID=eohhs2subtopic&L=6&L0=Home&L1=Researcher&L2=Physical+Health+and+Treatment&L3=Health+Care+Delivery+System&L4=DHCFP+Data+Resources&L5=Hospital+Summary
+Utilization+Data&sid=Eeohhs2(accessedJune24,2011).3MassachusettsDepartmentofHealthandHumanServices,DivisionofHealthcareandFinancePolicy,
HealthSafetyNetAnnualReportsfor2010,2009,2008and2007,
http://www.mass.gov/Eeohhs2/docs/dhcfp/r/pubs/10/hsn_2010_annual_report.pdf(accessedJanuary
2010).4KayLazar,ManycontinuetorelyonERs,BostonGlobe,November29,2010,http://www.boston.com/news/local/massachusetts/articles/2008/11/29/many_continue_to_rely_on_ers/
(accessedDecember,2010).
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coverage at lower costs contradicts another basic economic theory. By increasing
demandforhealthcareserviceswithoutanequalincreaseintheirsupply,theuniversal
health care law guaranteed that the price of health care services and health insurance
would increase. Our findings are consistent with this most fundamental tenet of
economiclaw.
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Introduction
InApril2006,thenGovernorMittRomneysignedtheMassachusettshealthcarereform
(HRC) law, which entitled An Act Providing Access to Affordable, Quality,
Accountable
Health
Care.
At
the
time,
proponents,
including
Governor
Romney,
claimed that the law would not only expand coverage to all Massachusetts residents,
butalsoreducehealthcarecosts.5
Almost four yearslater,inMarch2010, PresidentObamasignedintolawThePatient
ProtectionandAffordableCareAct,which,somehavesaid,is essentiallyidentical to
theMassachusettslaw.6 The Presidentclaimed that thefederal law will lowerhealth
carecosts,guaranteemorehealthcarechoices,andenhancethequalityofhealthcare.7
If the federal law is modeled after the Massachusetts law, it stands to reason that
Massachusettsexperiencewithhealthcarereformprovidesanideaofwhatisinstore
for the country under the federal law. We now have five years of data to consider in
assessinghowwellhealthcarereformhasworkedoutforMassachusetts. Inthisstudy,
we provide estimates of the effects of Massachusetts health care reform on health care
costs as measuredby federal and state expenditures on health care andby the cost of
privateinsurance.
HealthCareReforminMassachusettsTheMassachusettshealthcarereformlawwasaboldattempttoattainuniversalhealth
insurancecoverageandreducehealthcarecosts. Thelawwastheculminationofthree
decades of state intervention in health care markets. An understanding of the long
standingimperfectionsofthestateshealthcaresystemiscriticaltounderstandingthe
forcesthatledtothepassageoftheMassachusettslaw.
In1974,MassachusettsjoinedMaryland, NewYorkandNewJerseyin ahospital rate
setting program that implemented annual revenue caps for acute care hospitals.8 The
regulatoryformulasbecamecomplexandcumbersomeforhospitalstoadminister.
5JosephRago,TheMassachusettsHealthCareTrainWreck:ThefutureofObamaCareisunfolding
here:Runawayspending,pricecontrols,evenlimitsoncareandmedicallicensing,WallStreetJournalhttp://online.wsj.com/article/SB10001424052748704324304575306861120760580.html,July7, 2010.6Ibid.7U.S.DepartmentofHealthandHumanServices,Healthcare.gov,UnderstandingtheAffordableCare
Act,http://www.healthcare.gov/law/introduction/index.html(accessedNovember2010).8JohnMcDonough,TheroadtouniversalhealthcoverageinMassachusetts,TheNewEnglandJournalofPublicPolicy20,no.1(2004):5763.
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In 1986, Congress enacted the Emergency Medical Treatment and Active Labor Act
requiringhospitalstoprovidecaretoanyoneneedingemergencyhealthcaretreatment
regardlessofcitizenship,legalstatusorabilitytopay. TheActfailedtoprovidefunds
to reimburse the hospitals.9 That year, Massachusetts established the Uncompensated
Care
Pool
to
cover
the
costs
of
providing
care
to
the
uninsured:
a
burden
that
previouslyfellontheindividualhospitals. Thepoolisfundedthroughasurchargeon
allpaymentsmadetohospitalsandambulatoryservicecentersandanassessmentpaid
bythehospitals. Tocovertheshortfallsbetweenrevenueandexpenses,thelegislature
oftenmadeappropriations.10
Twoyearslater,thestateenactedlegislationthatrequiredallemployerswithmorethan
five workers to provide health insurance or pay $1,680 per employee tax to help
providecoverage. Thelawalsoretained,butatthesametime,relaxedtheregulationof
hospitalbudgets. Other provisions included a health insurance mandate for all full
timecollegestudents,aswellasprogramsthatexpandedhealthinsurancecoverageto
the unemployed, disabled, children, lowincome pregnant women and new mothers.
However, given strong opposition from thebusiness community coupled with a
severe recession in the state economythe employer mandate was never
implemented.11
Governor William Weld, who took office in 1991, began to remove some of the
regulationsenactedinthe1970s. Inaddition,Weldbegananinitiativetoexpandhealth
insurancecoveragebyutilizingSection1115oftheSocialSecurityActFederalMedicaid
Research and Demonstration waiver. The plan was tobring hundreds of millions innew federal dollars into the state, subsidize employer coverage for lower income
workers, and repeal the 1988 employer mandate. The Weld administration advertised
theplanasuniversalcoveragewithoutanemployermandate. Subsequentlegislation
increasedMedicaideligibilityforchildren andadjusted theUncompensatedCarePool
financingformula. Later,thelegislatureaddedacigarettetaxincreaseof$0.25perpack
andaprescriptiondrugprogramforlowincomeseniors.12
TheWeldadministrationwasabletosecureadditionalfederalfundingforthiseffortby
convincing
the
federal
government
that
the
waiver
was
presumably
budget
neutral
9U.S.GovernmentPrintingOffice,Title42Examinationandtreatmentforemergencymedical
conditionsandwomeninlabor,42USC1395dd,(January2002)
http://law.justia.com/us/codes/title42/42usc1395dd.html(accessed September 29, 2010).10RobertW.Seifert,TheUncompensatedCarePool:SavingtheSafetyNet,Mass.HealthPolicyForum
IssueBrief 16,(October2002):132,http://www.ncbi.nlm.nih.gov/pubmed/12776714(accessedJune21,2011.11McDonough,59.12Ibid,60.
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(spending wouldbe at the same levels as without the waiver).13 As a result of the
flexibility providedby the waiver, Medicaid enrollments in Massachusetts exploded
from670,000in1995tooveronemillionin2001,oralmost16%ofthestatepopulation,
before droppingbackbelow one million. Furthermore, health care inflationbegan to
surgeasmorepeoplegainedaccesstoinsuredcare.
Thissituationposedadilemmatothestateofficials. Theyhadsecuredarenewalofthe
waiverin2002,butthewaiverwasupforrenewalagainin2005. Theyneededtosecure
continued federal supplemental funding commitments under the Medicaid waiver.
Withoutanextensionofthewaiver,thestatewouldhavebeenforcedtocoverthetotal
costsoftheexpandedMedicaidrolls(over$2billion)orreverttothestandardeligibility
rulesandreducetherolls.14 Thefirstoptionwouldhavecrippledthestatebudget,and
thesecondoptionwouldhaveforcedpoliticianstomakeunwantedcutsinhealthcare.15
Beginning in 2003, Governor Mitt Romneys Secretary of Health and Human Services,
Ron Preston,began working on a plan to expand access to health insurance evenfurther. Then,inApril2006,MassachusettsGovernorRomneysignedintolawChapter
58 which was designed to achieve universal access to health insurance for all
Massachusettsresidents. ThelawalsogaveMassachusettsanewprogramonwhichto
baseanextensionoftheMedicaidDemonstrationWaiver.
Keycomponentswere:
Anindividualmandate,requiringallresidentswiththefinancialmeanstoobtainhealth
insurance;
An employer mandate requiring all employers with 11 or more employees tomake a fair and reasonable contribution towards their employees health
insurance;
An expansion of Medicaid and creation of a health insurance subsidy programforresidentswithincomeupto300%ofthefederalpovertylevel;and
The creation of a quasipublic authority the Massachusetts Health InsuranceConnector (Connector) that would serve as an insurance exchange and
provide a sealofapproval to health insurance products that the Connector
deemedtobeofgoodvaluetoconsumers.
13JoshuaGreenbergandBarryZuckerman,StateHealthCareReforminMassachusetts:HowOneState
ExpandedHealthInsuranceforChildren,HealthAffairs16,no.4(1997):188.14Usingdatafromthe2004and2008MassachusettsComprehensiveAnnualFinancialReport,weaverage
theMedicaidrollsfor19951997,or691,000,andfor20032005,or961,000.Wemultiplythedifferenceof
(270,000)bytheaverageMedicaidexpenditurepercasefor2005($7,815)toarriveat$2.110billion.15McDonough,61.
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Supporters of the reform plan argued that it would enable all residents to obtain high
qualityhealthinsurance,easethefinancialburdenonhospitalsforprovidingcaretothe
uninsured, lower the cost of health insurance and eliminate joblockby providing
portabilityofinsurancethroughtheConnector. Akeyconceptthatproponentsusedto
generatesupportwasthatofsharedresponsibility. Tobeeffective,therationalewas
thatanyhealthcarereformproposalmustrequireindividualsandfamilies,employers
andgovernmenttosharetheburdenofexpandingcoverage.
CurrentCostEstimatesThelawhas achievedsuccessinincreasinghealthinsurancecoveragefrom91%ofthe
population in 2005 to 98.1% in 2010.16 However, the law has failed to deliver the
promised reductions in health care costs or to lessen the financialburden on hospitals
that serve a disproportionate percentage of uninsured and underinsured residents.17
Becausethesecostsandburdenshaveincreasedratherthandecreased,healthinsurance
premiums,particularlythosepaidbysmallbusiness,havecontinuedtorise.
OfficialsattheCommonwealthConnectorandothersupportersofthelawhavebecome
conspicuously silent on the issue of cost. The Division of Health Care Finance and
PolicyestimatesthatpercapitaspendingonhealthcareinMassachusettsis15%higher
than the rest of the nation, even when accounting for the states higher wages and
spendingonmedicalresearchandeducation.18 Nevertheless,eventhatreportdismisses
any direct connectionbetween higher costs in Massachusetts and the reform law. It
concludes that increasing health care costs are a national problem, not unique to
MassachusettsordirectlycausedbyChapter58sexpansionofaccesstocoverage.19
Thereportmistakenlyidentifiesmarketfailure,notpolicyfailure,asthedriverofrising
health care costs. It points to a wide variation in the prices that are paidby health
insurers, reflecting an imbalance in the health care marketplace that merits
intervention.20 Like most studies that identify market failure as the problem, the
reportrecommendsmoregovernmentinterventioninthehealthcaremarket,suchas:
16MassachusettsDepartmentofHealthandHumanServices,HealthInsuranceCoverageinMassachusetts:Resultsfromthe20082010MassachusettsHealthInsuranceSurveys,
http://www.mass.gov/Eeohhs2/docs/dhcfp/r/pubs/10/mhis_report_122010.pdf(accessedJanuary2011).17UrbanInstitute,EstimatesofHealthInsuranceCoverageinMassachusettsfromthe2009
MassachusettsHealthInsuranceSurvey,(October
2009).http://www.mass.gov/Eeohhs2/docs/dhcfp/r/pubs/09/his_policy_brief_estimates_oct2009.pdf.18DivisionofHealthCareFinanceandPolicy,MassachusettsHealthCareCostTrends:2010Final
Report,(April2010):1.19Ibid,2.20Ibid,3.
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Morehealthresourceplanning; Immediategovernmentoversightofhealthinsurancepremiumsandprovider
rates;
Legislativereviewofprovidercontractprovisionsthatmaynowlimitcompetition;and
Oversightanddirectionprovidedbyanindependentpublicentity.21According to one report, premiums in Massachusetts are growing 2146% faster than
the national average, in part as a result of the minimum creditable coverage
requirements for meeting the individual mandate.22 Massachusetts largest health
insurersinitiallysoughtdoubledigitpremiumincreasesin2010,withsmallbusinesses
and individuals to experience the greatest increase.23 Several insurers negotiated a
reduced increase with the state health insurance commission, while others continue to
bargainwiththestate.
In 2009, the Massachusetts Taxpayers Foundation (MTF) issued a report in which itestimated that health care spendingby Massachusetts would increaseby $707 million
fromFY2006toFY2010. AccordingtotheMTF,thefederalgovernmentpaidforhalfof
thisincrease,andthelawraisedtaxpayerhealthcarecostsby$353millionfrom2006
2010: anaverage increase of $88 million per year.24 However, as Cato Institute scholar
Michael Cannon points out, MTF assumes cuts in payments to safety net hospitals for
FY2010,whichareunlikelytomaterialize. Thesecutswouldreduceoverallspending
on health care reform,by $110 millionbetween FY 2009 and FY 2010.25 As noted
above,theHealthSafetyNetFundfailedtomake$75millioninpaymentstohospitals
and
community
health
centers
in
FY
2010.
Since
these
healthcare
facilities
had
to
absorb
theunpaidcosts,thecutsdonotreflectsavingsbutrathercostshifting.
Perhapsmostimportantly,accordingtotheMassachusettsTaxpayersFoundation,only
20% of reforms costs actually accrued to the Commonwealth of Massachusetts. The
21Ibid.22CathySchoen,JenniferL.Nicholson,andSheilaD.Rustgi,PayingthePrice:HowHealthInsurance
PremiumsAreEatingupMiddleClassIncomes,TheCommonwealthFund,http://bit.ly/91cTbe,
(August2009):8.23RobertWeisman,2InsurersAgainSeekDoubledigitIncreases:EarlierRejectionsStillUnderAppeal,
BostonGlobe,June3,2010,http://www.boston.com/business/healthcare/articles/2010/06/03/mass_health_insurers_seek_double_digit
_increases_again/(accessedJune11,2011).24MassachusettsTaxpayersFoundation,MassachusettsHealthReform:TheMythofUncontrolledCosts(May2009).http://www.masstaxpayers.org/files/Health%20careNT.pdf(accessedSeptember27,2010).25MichaelF.Cannon,TheBostonGlobeMisleadsReadersAbouttheCostofHealthReformin
Massachusetts,August5,2009,http://www.catoatliberty.org/thebostonglobeknowinglyobscures
factsofmassmiracle/(accessedSeptember30,2010.)
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federal government paid for another 20%.26 The vast majority of new spending on
health care affects private individuals andbusinesses, whose increased spending on
healthcaremakesup60%ofthetotal.27
AccordingtoMichaelCannonandAaronYelowitz,totalnewspendingcametomore
than $1 billion in 2008. Specifically, the state of Massachusetts, the federal
government,andthenewlyinsuredspent$1billionmorein2008thantheywouldhave
without health care reform. The authors call this a conservative estimate, since it
includes only new spendingby the state government, the U.S. government and the
previously uninsured. It does not include new spending on insuranceby previously
insured residents, whose policies were deemed inadequate under health care reforms
new mandates. The policies of the previously insured exceeded the outofpocket
limits, and the services covered under such plans were often too limited to satisfy the
new law. In addition, Cannon and Yelowitz criticize insurance coverage rate claims,
assertingthatgainsincoveragehavebeenoverstatedbynearly50%,whilecostshave
beenunderstatedbyatleastonethirdandlikelymore.
28
InoneoftheearlystudiesonthenewhealthcarelawinMassachusetts,Coganandhis
coauthorsestimatedtheeffectofhealthcarereformonemployersponsoredinsurance
premiumsfrom20062008.29 Controllingforothernationalpremiumtrends,theyfound
that health care reform had increased these premiumsby 6% over the period. This
increasebecomes more striking when we consider that Commonwealth Carebegan to
crowdoutemployersponsoredinsurance,meaningthatthedemandforcoveragehas
actuallyfallen.30
26MassTaxpayersFoundation,MassachusettsHealthCareReform.27MichaelF.Cannon,BustingtheBayState:HidingtheCostofHealthReform,ProvidenceJournal,August9,2009,http://www.projo.com/opinion/contributors/content/CT_cannon9_0809
09_73F9ICH_v9.3f8e6eb.html.(accessedSeptember20,2010).28AaronYelowitzandMichaelF.Cannon,PolicyAnalysis657,CatoInstitute(January20,2010).29Cogan,Hubbard,andKessler,TheEffectofMassachusettsHealthReformonEmployerSponsoredInsurancePremiums.30 Ibid.
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TheBHIEstimatesTo gauge the rise in health care costs attributable to the reform law, BHI compiled
historical data on relevant health care costs, defined as Massachusetts Health and
Human Services (nonMedicaid), Medicaid, Medicare expenditures and Medicare
Advantage plan rates and health insurance premiums in Massachusetts. Using
historicaldata,weestimatedthedatapointvaluesfortheyears2006to2009(or2010if
data is available) to determinebaseline estimates of spending had health care reform
notbeenenacted. Ourstateexpendituredataisavailableinstatefiscalyears,whileour
otherdataavailableincalendaryears. Wethencomparedthebaselineestimatestothe
actualdata to determinewhateffect health carereform had on health care costs. This
methodissimilartothatusedbyotherresearcherstoestimatehealthcarecosts.31
To obtain ourbaseline estimates, we calculated two linear trends of the data, prior to
2006 and 2007, the year health care reform was enacted and the first full year after
enactment. These dates act as our analysis events. In the absence of health carereform,thecostdatashouldapproximatelyfollowitsrecenthistoricalpattern. Thejob
ofcalculatingtheimpactbasedondeviationsfromthetrendiscomplicatedbecauseof
theproblemofdeterminingthetruetrend. Therefore,weusedfourscenariostomake
our estimates. For example, we used 2006 in an attempt to capture any changes that
began asthe healthcare reformlawbecame moreofa certainty over the course of the
year.
To check our results we also conducted the analysis using the trend in national data,
where
available.
This
method
captures
any
trends
in
spending
that
have
affected
the
entireU.S.healthcaremarket,butwerenotcapturedinourtrendanalysisforthestate.
This method provides a secondbenchmark against which to measure Massachusetts
healthcarespending.
Our hypothesis is that if health care reform increased health care costs in the
Commonwealth, then the actual data for 20062009/2010 wouldbe higher than the
trend. Conversely,ifthereformlawreducedthegrowthrateofhealthcarecosts,then
theactualdatawouldbebelowthetrend. Tocalculateourfinalestimates,wetakethe
average of our four estimates. The appendix contains a more detailed explanation of
ourmethodologyanddata.
MedicaidandHealthandHumanServicesTable 1 shows the estimation results using linear trend calculation for HHS spending
and exponential trend for Medicaid spending. The top half of Table 1 contains our
estimatesusingFY2006theyearhealthcarereformlegislationwasenactedasour
31 Cogan, et al.
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event date. In the first five years the reform law lowered spending for Massachusetts
HHSandthestateportionofMedicaidbeforespendingexceededthetrendforFY2009;
leading to total savings of $466 million to the statebudget. While the state HHS and
Medicaidspendingdroppedintheinitialyears,federalMedicaidspendingroseduring
theperiodby$2.315billion.
However, ifweuseFY 2007as our event, health care reform increasedstate HHS and
Medicaidspendingby$513millionandincreasedfederalMedicaidspendingby$1.668
billionforatotalincreaseof$2.181billionovertheperiod. Ourresultsdemonstratethe
importanceofthefederalMedicaidwaiverextensionnegotiatedinFY2008inshielding
the state from incurring the full cost of the health care reform law. The federal
governmentabsorbedbetween$1.668billionand$2.315billioninMedicaidspending.
Table1:EffectofHealthCareReformonHHSandMedicaidSpending($m)
EventDate:FY2006 2006 2007 2008 2009 2010 Total
MassachusettsHHS+Medicaid (265) (180) (7) 174 (189) (466)
FederalGovernmentPortionofMedicaid 338 582 565 700 130 2,315
Total 73 401 558 874 (58) 1,849
EventDate:FY2007 2007 2008 2009 2010 Total
MassachusettsHHS+Medicaid (173) 286 360 40 513
FederalGovernmentPortionofMedicaid 409 530 634 94 1,668
Total 237 815 994 135 2,181
Table 2 shows the results using the growth rate of state government health care and
Medicaid spending in the other states as ourbaseline. The results are consistent withthoseabove. MassachusettsandHHSandMedicaidspendinggrowthdropsbelowthe
growthrateoftheotherstatesinFY2006,FY2007andFY2008,beforemovinghigher
thantheotherstatesinFY2009anddroppingagaininFY2010,whilefederalMedicaid
spending increases rapidly throughout the period. Over the period, Massachusetts
HHSandtotalMedicaidspendingfellbyanaverageof$1.217billion.
Table2:EffectofHealthCareReformonHHS&MedicaidwithNationalGrowthRates($m)
EventDate:2006 2006 2007 2008 2009 2010 Total
MassachusettsHHS+Medicaid (591) (619) (26) 164 (145) (1,217)
FederalGovernmentPortionofMedicaid 187 396 763 995 597 2,938
Total (404) (223) 737 1,158 453 1,721
EventDate:2007 2007 2008 2009 2010 Total
MassachusettsHHS+Medicaid 191 818 1,043 772 2,825
FederalGovernmentPortionofMedicaid 396 763 995 597 2,751
Total 587 1,582 2,038 1,369 5,576
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WhenweuseFY2007asourstartdate,stateHHSandMedicaidspendinggrowrapidly
comparedtothenationaltrend. Thedifferenceinthegrowthrateofspendingbetween
the state and the national average shows Massachusetts spent $2.825billion in more
fromFY2007toFY2010. Onceagain,theMedicaidwaiverplaysanimportantrolein
relievingthestateofhealthcarereforminducedhealthcareexpenditures. Onaverage,
Massachusettsspent$414millionovertheperiodduetothehealthcarereformlaw.
TheEffectoftheMedicaidWaiverThe Massachusetts Comprehensive Annual Financial Report (CAFR) provides a
glimpse of the effect of the FY 2008 Medicaid waiver extension agreement. Table 3
shows the tenyear schedule of HHS and Medicaid expenditures and other financing
uses fromboth the FY 2007 (left portion of the table) and FY 2009 (middle portion)
CAFRreports.32
Thereports
contain
different
entries
under
HHS
and
Medicaid
headings
for
the
fiscal
yearsFY2002throughFY2008. TheFY2007CAFRshowsthedatabeforetheMedicaid
waiver extension was approvedin September of2008,whilethe FY 2009 CAFR shows
the spending after the waiver extension. The FY 2009 CAFR shows smaller amounts
underHHSandlargeramountsunderMedicaidthantheFY2007CAFR. Thechanges
between the amounts under the two headings offset one another almost exactly,
showing the amount of spending that the Medicaid waiver has allowed the state to
reclassifyasMedicaid.
Table3:ReallocationofHHSandMedicaidSpending($m)
Fiscal Prewaiverextension Postwaiverextension Difference
Year HHS Medicaid Total HHS Medicaid Total HHS Medicaid
2002 6,104 5,261 11,365 5,386 5,979 11,365 718 718
2003 5,962 5,542 11,504 5,327 6,177 11,504 635 635
2004 6,832 5,945 12,777 5,868 6,909 12,777 964 964
2005 7,602 6,313 13,915 6,208 7,706 13,914 1,394 1,393
2006 6,797 7,219 14,016 5,865 8,151 14,016 932 932
2007 7,089 7,862 14,951 5,907 9,044 14,951 1,182 1,182
*2008 7,603 8,590 16,193 6,423 9,770 16,193 1,180 1,180
*2009
8,117
9,410
17,527
6,684 10,843
17,527
1,433
1,433
*2010 8,522 9,245 17,767 7,089 10,678 17,767 1,433 1,433
Total 64,628 65,387 130,014 54,757 75,257 130,014 9,871 9,870
*EstimatebasedonFY2008CAFRreportingthat$4.3billioninadditionalMedicaidreimbursementsfor
FY20092011abovetheFY20062008period. Totalsmaynotsumduetorounding.
32ComptrolleroftheCommonwealth, MassachusettsComprehensiveAnnualFinancialReports,(December2009
andJanuary2008):164165,162163;
http://www.mass.gov/?pageID=oscterminal&L=3&L0=Home&L1=Publications+and+Reports&L2=Financial+Reports&
sid=Aosc&b=terminalcontent&f=reports_audits_rpt_cafr&csid=Aosc. (accessedJune2011).
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According to the FY 2008 CAFR report, the Medicaid waiver extension authorizes
federalreimbursementforapproximately$21billioninspendingfromFY2009through
FY 2011, $4.3billion more in spending than was authorized for FY06 through FY08.33
Thereportoutlinestheextensionoffederalreimbursementforallcurrenteligibilityand
reimbursement levels and Commonwealth Cares subsidized coverage up to 300% of
thepovertyrate. Thesefiguresprovidefurtherevidenceofhowthefederalgovernment
continuestopickupthestategovernmentstabforhealthcarereform.
MassachusettsHealthCareInsuranceRatesandExpendituresBHI examined the effect of health care reform on health insurance costs from the
Medical Expenditure Panel Survey conductedby the Agency for Healthcare Research
and Quality at the U.S. Department of Health and Human Services. Table 4 displays
the results for total insurance premium costs forboth single and family plans. By
calendaryear
(CY)
2009,
annual
premiums
for
a
single
plan
exceeded
the
trend
line
by
$217. BetweenCY2006andCY2009thetotalexcesspremiumpaidforasingleperson
was$398. Thedifferenceforafamilyplanisevengreater,exceedingthetrendlineby
$1,074 in CY 2009. The total aggregate increase in premiums paid on a family plan
between CY2006and CY2009was$3,185. Theanalysisusing CY2007astheevent
reducesthetotalpremium increasesbynearlyhalf:to$171forasingleplanand$1,822
for a family plan. On average, the single plan premiums increasedby $284 and the
familyplanpremiumsincreasedby$2,504.
Table4:EffectsofHealthCareReformonAverageHealthInsurancePremiums
EventYear 2006 2007 2008 2009 Total
SinglePlan($peryear)
Eventdate:2006 101.60 60 19 217 398
Eventdate:2007 23 (22) 170 171
FamilyPlan ($peryear)
Eventdate:2006 612 704 796 1,074 3,185
Eventdate:2007 481 545 796 1,822
The increase in the health care premiums led to large increases in aggregate health
insurancecosts
over
the
period.
Table
5
provides
the
results.
We estimate that health care reform drove health care insurance expenditures upby
$4.736 billion to $6.144 billion over the period. This calculation is based on the
assumption that there exists a high correlation between the amount that private
consumerspayforhealthinsurance,andtheactualconsumptionofhealthcare. Thatis,
332009CAFR,1920.
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we are likley to find that private insurance premiums rise or fall, depending on the
actualamountofhealthcarethatratepayersconsume.
TheanalysisutilizingCY2007astheeventyear,healthcarereformincreasedpremiums
by $3.361billion in CY 2009, using the Massachusetts growth trend, or $3.004billion
using the United States growth trend over the period. On average, the health care
reform law drove up health care insurance expendituresby $4.311billion over theperiod.
Table5:EffectsofHealthcareReformonTotalHealthInsuranceCosts
2006 2007 2008 2009 Total
MassachusettsTrend($m)
EventDate:2006 1,292 1,380 1,461 2,011 6,144
EventDate:2007 914 941 1,506 3,361
USGrowthRate($m)
EventDate:2006 420 979 1,530 1,806 4,736
EventDate:2007 544 1,080 1,380 3,004
MedicareExpendituresinMassachusettsAs discussed above, the federal government absorbed a large portion of the state
government expenditures for health care reform through the state Medicaid waiver
program. In order tobetter understand the federal governments liability for health
carereformand,inlightoftheincreasesinMedicaidcostsandprivatehealthinsurance
costs,BHIanalyzedMedicarespending,bothinsuranceplancostsandpersonalhealth
careexpendituresinMassachusetts. Table6displaystheresults.
Table6:EffectsofHealthCareReformonMedicareSpendinginMassachusetts
EventYear 2006 2007 2008 2009 2010 Total
MedicareAdvantageRatePlan($peryear)
Massachusetts
Eventdate:2006 385 521 874 926 647 3,352
Eventdate:2007 328 649 669 359 2,005
RestoftheUnitedStates
Eventdate:2006 237 320 360 71 102 1,090
Eventdate:2007 201 217 (97) (80) 242
Medicarepersonalhealthcareexpenditures($,million)
Massachusetts
Eventdate:2006 668 955 1,281 1,647 2,056 6,606
Eventdate:2007 788 1,099 1,450 1,845 5,186
RestofUnitedStates
Eventdate:2006 52 1,179 1,551 1,969 2,435 7,685
Eventdate:2007 968 1,324 1,726 2,177 6,194
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MedicareAdvantageplansinMassachusettsexhibitahighergrowthrateintheperiod
afterthepassingofhealthcarereformthanthetrendlinepriortoreform.34 InCY2006,
theplan ratesjumpedto$385peryearabovethetrendlineand surgedby$647inCY
2010fortotalincreaseof$3,352overthe period. Whencomparedto theUnitedStates
over the same period ratesjumpedby close to $237 above the trend in the first year,
resulting in an average Medicare Advantage plan costing $1,090 more than if health
carereformhadnotbeenimplementedoverthefiveyearperiod.
We reach similar conclusions using CY 2007 as the event year. Medicare Advantage
planratesarehigher,againsttheUnitedStatesorMassachusettstrendgrowth,by$242
peryearand$2,005respectively. Likewise,Medicarepersonalhealthcareexpenditures
would havebeen much lower had health care reform notbeen implemented. In CY
2010alone,spendingwouldhavebeenbetween$1.845billionand$2.435billionless.On
average,theMedicareAdvantageplansincreasedby$1,672overtheperiod.
34TheKaiserFamilyFoundation,MedicareHealthandPrescriptionDrugTracker,Massachusetts:Entire
MedicareAdvantageProfile,(2009).
http://healthplantracker.kff.org/georesults.jsp?r=26&yo=2&n=1&pt=8(accessedSeptember27,2010).
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Conclusion
Amid celebration and fanfare, the Commonwealth of Massachusetts enacted a long
soughtafter health care reform law in 2006. Advocates promised that the law would
shrink the rolls of the uninsured and reduce health care costs. As a result,
Massachusetts was held up as a model upon which national health care reform
legislation would be based. There is no doubt the federal Patient Protection and
AffordableCareActcloselyresemblesthestateshealthcarereformlaw. Butitislikely
the consequences will be the same: higher costs for both the policyholders and
taxpayers.
The Commonwealth has made strides in increasing health insurance coverage in
Massachusetts. However, the 2006 law has failed to reduce health care costs, an
important goal that was stressed as equally critical to success as universal coverage.
Health care reform has pushed increasesboth above the prereform growth trend inMassachusetts and the growth rate found in the rest of the country. The
Commonwealth hasbeen fortunate. Few of the increased costs identified in this study
havebeen shifted to the Commonwealth primarilybecause the federal government,
through its Medicaid waiver agreement, has absorbed a large portion of the cost
increases.
Private insurance carriers have notbeen able to escape theburden of the increase in
health care costs. While the Commonwealths health care ticket is paidby the federal
government,
privatecompanies
have
no
choice
but
to
pass
the
higher
costs
onto
the
insured.Someofthesecostsfallinthedoubledigitrange,adevelopmentthathascome
under fire from the same state officials who celebrate the laws success. Since it must
respond to competitive demands, the insurance industry does not enjoy the largess of
thefederalgovernmenttocoveritscostincreases. Theproposedsolutionwillmakethe
problems worse. Governor Deval Patrick and others now talk of controlling insurance
rates through regulatory oversight, a dubious policy. Controlling costs will translate
intocappingservicesprovidedbyphysiciansandothercaregivers. Theseare,ineffect,
pricecontrolsthatwilldampentheincentivetoprovideservicesandleadtolongerwait
timesandtherationingofhealthcare.
The ability of the federal government, facing its ownbudgetary problems, to carry
burdens imposed on itby the states, is not unlimited. Furthermore, itsbeneficence to
theCommonwealthwillmostlikelydiminish,ifnotexpire,inthefuture.Policymakers
atalllevelsshouldtakenote.
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Methodology
Weuseasimplelineartrendequationmethod,usingtheTRENDformulainMicrosoft
Excel which returns a value along a linear trend, using the Ordinary Least Squares
(OLS)method
to
calculate
the
trend
for
all
variables
except
for
Medicaid.
According
to
the state Fiscal Year (FY) 2008 Comprehensive Financial Report, $4.3 billion in
additional Health and Human Services (HHS) spending was retroactively reimbursed
under federal Medicaid waiver that supports the reform law.35 This gave the
impression that HHS spending dropped. However, state Medicaid spending spiked
after FY 2004. In order to adjust for this switch, we used an exponential trend line to
bettercapturethissurgeinMedicaidspending. Allofourgraphsreportthecoefficients
of determination (R2) value which measures the fit of the trend line to the data. The
closerto1.00theR2value,thebetterthetrendlinefitstothedata. AllofourR2values
exceed0.82,withmostexceeding0.90,whichmeansourtrendlinecapturesfrom82%to
over 90% of the variation in the data. See individual graphs for their respective R2
values.
We analyzed the trends using two different event years,both 2006 and 2007. When
using event year 2006, the OLS trend calculation uses the years up to and including
2005todeterminethevalues of theindependentvariables. Theactualdatapoints,for
example $551.51 in 1999 for Medicare Advantage plan rates, were used as the
dependent variable to determine a simple regression. We then used this regression
formula to estimate the spending for the years 2006, 2007, 2008, 2009 and 2010. The
differencebetweenourcalculatedvaluesandtheactualvalueswasthecostincrease,ordecrease, of health care reform in Massachusetts. We employed the same mythology
using 2007 as our event year, except data points up to and including 2006 were
included,andwecalculatedonlyfouryearsofspending(explainingwhymanyofthese
resultingtotalsarelower).
InadditiontousingtheMassachusettstrendforourcalculations,weusedthenational
trend,whereavailableandapplicable,tocontrolfornationalpoliciesandpricechanges
thatmighthaveaffectedthecostofhealthcoverage. Toachievethis,wecompiledthe
samedatasetsfortheUnitedStates,andcalculatedthetrendusingboth2006and2007
astheeventyears. WethencalculatedthepercentdifferencebetweentheUnitedStates
trend and the United States actual, and applied that to the Massachusetts actual,
resultingintheMassachusettstrendwithrespecttotheUnitedStates.
35ComptrolleroftheCommonwealth,FiscalYear2008StateComprehensiveAnnualFinancialReport,
(October2008)1920,
http://www.mass.gov/?pageID=oscterminal&L=3&L0=Home&L1=Publications+and+Reports&L2=Financi
al+Reports&sid=Aosc&b=terminalcontent&f=reports_audits_rpt_sbfr&csid=Aoscrts&sid=Aosc&b=termin
alcontent&f=reports_audits_rpt_sbfr&csid=Aosc (accessed June 21, 2011).
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Figures1though5providevisualrepresentationsof thedatasets. Additionally, they
showthelineartrendlineandtherespectivecoefficientofdetermination.
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The Medical Expenditure Panel Survey (MEPS) supplied both the total number of
privatesectoremployeesand thenumberofemployeescoveredbyasingleof family
plan. Wemultipliedthetotalnumberofprivatesectoremployeesbythepercentageof
insured individuals in Massachusetts to approximate number of private sector
employeesbuying insurance inagivenyear.36 TheMEPSalso reports the fractionof
privatesectoremployeeswhoareenrolledineitherfamilyorsingleinsuranceplansby
year. StartinginCY2001theMEPSalsobegancollectingenrollmentdateforemployee
plusoneplans. Aswedonothave theaveragecontribution for these typesofplans,
and thehighestpercentof employeespurchasing thisplan is13%,weused the ratio
betweenthefamilyandsingleplansforourcalculations.
First,wemultipliedthenumberofprivatesectoremployeesbythepercentinsured,and
then
by
the
ratio
of
single
and
family
plans
resulting
in
the
number
of
each
plan
purchasedbyyear. Sinceafamilyplanwilltypicallycovermorethanoneemployeeat
multiple employers,wedivide theamountofpeopleunder family coverageby 72%.
AccordingtotheU.S.BureauoftheCensus,55.74%oftwopersonhouseholdscontain
two workers, while 44.26% contain one worker. Nonworking households were
excluded, since we were calculating the cost of private sector employee health
36TheMedicalExpenditurePanelSurveyconductedbytheAgencyforHealthcareResearchandQuality
attheU.S.DepartmentofHealthandHumanServices,http://www.meps.ahrq.gov/mepsweb/.
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insurance. Toweightthiscorrectly,44.26%coveroneemployee,and55.74%covertwo
employees.Because44.26%/1and55.74%/2sumto72.13%,weinferthat72policiesare
required to cover 100 employees on average. We then multiplied these two numbers
bytheamountabovebaselinethatemployeeswouldhavetocontributetoeithersingle
or family plans. The result was the total annual insurance expense for private sector
employees above thebaseline. The following table supplies thebasic assumptions
includedinourestimationofemployeecontributionschangesduetohealthcarereform
inMassachusetts.
Table7:EffectsofHealthCareReformonthePrivateSectorInsurancePremiums
Variable 2006 2007 2008 2009
Numberofprivatesectoremployees 2,962,089 2,981,838 3,001,586 2,747,843
SingleCoverage(Weighted) 55.20% 56.03% 56.86% 59.47%
FamilyCoverage(Weighted) 44.80% 43.97% 43.14% 40.53%
PercentInsured 90.40% 92.20% 94.75% 97.30%
SinglePlanDifference($perplan) 98.40 101.61 104.82 269.53
FamilyPlanDifference($perplan) 203.60 148.23 92.85 644.98
InsuranceExpense($m) 389.69 335.71 283.43 1,127.49
A normal interval estimate, and the subsequent hypothetical testing for a confidence
interval,cannotbecalculatedforourtimeseriesdatasets. Ineachpopulationn=1,since
eachtimeperiodisindependent,onlyonedatapointisavailable. Sincenootherstates
implementedthesamehealthcarereformasMassachusetts,wemustuseMassachusetts
data,resultinginjustonedatapointforeachyear.
Tables 8 though 13 provide the detail of our data sets. The first two columns in eachtableprovidetheyearandactualdatapointsasfarbackaspossible. Sincehypothesis
testing was unavailable, we used the next three columns to provide a sensitivity
analysis. We assumed an event year of 2006, and calculated the baseline trend
multipliedby95%andthebaselinetrendmultipliedby105%. Thefinalcolumnshows
thedifferencebetweenthecalculatedtrendlineandtheactualdatalevelsforeachyear.
Table 8 shows the detailedbreakdown of state health and human service spending.
When the trend numbers are increased or decreasedby 5%, the magnitude of the
difference
does
change,
but
the
direction
does
not.
This
means
that
even
with
a
5%
errorthetheorythathealthcarereformincreasedHHSspendingholds. Thesameholds
trueforTable9,whichprovidesdetailsonstateMedicaidspending. Again,witha5%
error, the size changesbut the direction of the effect does not. Health care reform
increasedstateMedicaidspendingabovethehistoricalgrowthtrend.
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Table8:StateHHSSpending($m)
Year Actual
Trend
less5% Trend
Trend
plus5%
Difference
fromTrend
1997 4,507.00
1998 5,058.00
1999 5,160.00
2000 5,324.00
2001 5,622.00
2002 6,104.00
2003 5,962.00
2004 6,832.00
2005 6,208.00
2006 5,865.00 6,144.79 6,468.20 6,791.61 (603.20)
2007 5,907.00 6,335.24 6,668.68 7,002.11 (761.68)
2008 6,423.00 6,644.74 6,994.46 7,344.19 (571.46)
2009 6,684.00 6,849.17 7,209.66 7,570.14 (525.66)
2010 7,089.00 7,037.61 7,408.01 7,778.41 (319.01)
Table9:StateMedicaidSpending($m)
Year Actual
Trend
less5% Trend
Trend
plus5%
Difference
fromTrend
1997 3,455.53
1998 3,665.84
1999 3,856.45
2000 4,269.99
2001 4,642.34
2002 5,259.28
2003 5,698.31
2004 5,742.40
2005 6,268.84
2006 7,144.63 6,278.02 6,608.44 6,938.86 536.19
2007 7,840.93 6,628.82 6,977.70 7,326.59 863.23
2008 8,246.34 6,979.62 7,346.97 7,714.32 899.37
2009 8,679.21 7,330.42 7,716.23 8,102.05 962.98
Table 10 details Medicare Advantage plan rates. For 2006, a 5% increase in the trend
does change the direction of the sign, making the trend $5 million, or 0.006% higher
than the actual. Thus, a 5% increase in the trend changes the cost increase into cost
savingsfor2006. Therestoftheresultsholdfora5%increaseinthetrends.
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Table10:MedicareAdvantagePlanRate($perMonth)
Year Actual
Trend
less5% Trend
Trend
plus5%
Difference
fromTrend
1999 551.51 2000 569.90
2001 592.62
2002 606.41
2003 617.85
2004 687.50
2005 737.72
2006 772.42 703.35 740.37 777.39 32.05
2007 813.02 731.14 769.62 808.10 43.40
2008 871.69 758.93 798.87 838.82 72.82
2009 905.23 786.72 828.12 869.53 77.112010 911.29 814.51 857.38 900.24 53.91
Tables 11, 12 and 13 detail Medicare personal health expenditures and average
premiumsforsingleandfamilyplanrespectively,andfollowthissamepattern. A5%
changeinthetrendconfirmsthathealthcarereformincreasedcosts.
Table12showsthatwhenweincreasethetrendfortheaveragesingleplanpremiumby
5%thesigntochangesandhealthcarereformwouldshowtoreducecosts. Therefore,
the results would not hold if our trend calculation were 5%below the true trend forthese variables. Nevertheless, all the other trend estimates hold against a 5% trend
increase, giving us confidence that our results withstand changes to our trend
calculations.
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Table11:MedicarePersonalHealthCareExpenditures($m)
Year Actual
Trend
less5% Trend
Trend
plus5%
Difference
fromTrend
1991 3,485.00
1992 3,982.00
1993 4,505.00 1994 4,932.00
1995 5,463.00
1996 5,892.00
1997 6,024.00
1998 5,798.00
1999 5,830.00
2000 6,010.00
2001 6,526.00
2002 6,904.00
2003
7,285.00
2004 7,913.00
2005 8,300.74
2006 8,707.47 7,861.42 8,275.18 8,688.94 432.30
2007 9,134.14 8,140.70 8,569.16 8,997.62 564.98
2008 9,581.71 8,419.99 8,863.14 9,306.30 718.57
2009 10,051.22 8,699.27 9,157.13 9,614.98 894.09
Table12:InsuranceCosts,AverageSinglePlanPremium($perYear)
Year RateTrend
less5% TrendTrend
plus5%Differencefrom
Trend
1996 2,329.00
1997 2,237.00
1998 2,392.00
1999 2,539.00
2000 2,719.00
2001 3,086.00
2002 3,353.00
2003 3,496.00
2004
4,141.00
2005 4,235.00
2006 4,448.00 4,129.08 4,346.40 4,563.72 101.60
2007 4,642.00 4,352.54 4,581.62 4,810.70 60.38
2008 4,836.00 4,575.99 4,816.84 5,057.68 19.16
2009 5,268.00 4,799.45 5,052.05 5,304.66 215.95
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Table13:InsuranceCosts,AverageFamilyPlanPremium($perYear)
Year Rate
Trend
less5% Trend
Trend
plus5%
Difference
fromTrend
1996 6,002.00
1997 5,794.00
1998 6,139.00 1999 6,547.00
2000 7,341.00
2001 8,176.00
2002 8,779.00
2003 9,867.00
2004 10,559.00
2005 11,435.00
2006 12,290.00 11,094.10 11,678.00 12,261.90 612.00
2007 13,039.00 11,718.35 12,335.11 12,951.86 703.89
2008 13,788.00 12,342.61 12,992.22 13,641.83 795.782009 14,723.00 12,966.86 13,649.33 14,331.79 1,073.67
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U.S.GovernmentPrintingOffice.Title42.ExaminationandTreatmentforEmergency
MedicalConditionsandWomeninLabor.42USC1395dd.(January2002).
http://law.justia.com/us/codes/title42/42usc1395dd.html.(accessedSeptember29,
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Yelowitz,AaronandMichaelF.Cannon.TheMassachusettsHealthPlan:MuchPain,
LittleGain.PolicyAnalysis657.CatoInstitute.(January20,2010).
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TheBeaconHillInstituteatSuffolkUniversity/June2011 31
AbouttheAuthors
DavidG.Tuerck,PhD,isExecutiveDirectoroftheBeaconHillInstituteforPublic
PolicyResearchatSuffolkUniversitywherehealsoservesasChairmanandProfessor
ofEconomics.
He
holds
a
Ph.D.
in
economics
from
the
University
of
Virginia
and
has
writtenextensivelyonissuesoftaxationandpubliceconomics.
PaulBachman,MSEP,isDirectorofResearchatBHI.HemanagestheInstitutes
researchprojects,includingitsSTAMPmodelandotherprojects. Hehaspublished
studiesonstateandnationaltaxpolicyandonstatelaborpolicy.Healsoproducesthe
institutesstaterevenueforecastsfortheMassachusettslegislature.HeholdsaMaster
ofScienceinInternationalEconomicsfromSuffolkUniversity.
Michael Head, MSEP, is an Economist at the BHI. He holds a Master of Science in
EconomicPolicyfromSuffolkUniversity.
TheauthorswouldliketothankFrankConte,DirectorofCommunicationsattheBeaconHillInstitute,forhiseditorialassistance.
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TheBeaconHillInstituteatSuffolkUniversityinBostonfocusesonfederal,stateandlocaleconomic
policiesastheyaffectcitizensandbusinesses.Theinstituteconductsresearchandeducational
programstoprovidetimely,conciseandreadableanalysesthathelpvoters,policymakersandopinion
leadersunderstandtodaysleadingpublicpolicyissues.
June2011bytheBeaconHillInstituteatSuffolkUniversity
THEBEACONHILLINSTITUTE
FORPUBLICPOLICYRESEARCH
SuffolkUniversity8AshburtonPlace
Boston,MA02108
Phone:6175738750Fax:6179944279
http://www.beaconhill.org