The Boston Globe Misleads Readers About the Cost of Health Reform in Massachusetts

An editorial in today's Boston Globe announces, "Mass. bashers take note: Health reform is working." The editors write:

Pundits and politicians who oppose universal healthcare for the nation have a new straw man to kick around - the Massachusetts reform plan that covers more than 97 percent of the state’s residents. In the myth that these critics have manufactured, this state’s plan is bleeding taxpayers dry, creating nothing less than a medical Big Dig.

The facts - according to the Massachusetts Taxpayers Foundation - are quite different. Its report this spring put the cost to the state taxpayer at about $88 million a year, less than four-tenths of 1 percent of the state budget of $27 billion.

Here's why the claim that the reforms cost Massachusetts taxpayers just $88 million per year is wrong.

1. According to the Massachusetts Taxpayers Foundation, $88 million is not the annual cost of the law, but the average year-to-year increase in state spending due to the law.  It's a marginal-cost estimate, not a total-cost estimate.
2. The foundation used (uncertain) future spending cuts to make the average annual increase in spending appear smaller.  In 2009, the total cost to the state government, according to the foundation, will be $408 million, nearly five times what the Globe claims.
3. That $408 million is just the cost to the state government.  According to the foundation's estimates, the state government's share amounts to just 20 percent of the law's total cost of $2.1 billion in 2009. The remaining 80 percent is borne by the federal government (20 percent) and private individuals and employers complying with the law's individual and employer mandates (60 percent).  Since Massachusetts taxpayers also pay federal taxes and must comply with the law's mandates, state taxpayers pay much more than $88 million to comply with the law.  In fact, the total cost of the law is about 24 times what the Globe says it is.

So the Globe is wrong.  But here's why the Globe should have known better.

I recently wrote an op-ed where I picked apart the Massachusetts Taxpayers Foundation numbers.  The op-ed hardly "manufactured myths" or "kicked around straw men."  I reached these conclusions using the foundation's own data, and by talking with foundation president Michael Widmer.  Widmer agrees with all of these points.  (With one exception: he maintains it's legitimate to use assumed future savings to reduce the average year-to-year increase in spending.  But really, that's a minor issue.)

I submitted that op-ed to The Boston Globe.  They sat on it for a week, then rejected it.  Which is fine. (FYI, the op-ed has been accepted at The Providence Journal.)

At a minimum, that raises the question of whether this misinformation was in fact disinformation.