June 4, 2008 12:49PM

Defining Success Down, Massachusetts Style

Health Affairs has just published a new study of the Massachusetts health care plan by Urban Institute scholar Sharon Long. Media coverage has generally been positive, hailing the Massachusetts experiment as a success. But a closer look leads to a far less sanguine conclusion. Among other things, the study shows that:

  • Slightly less than half of Massachusetts’ uninsured population actually complied with the mandate. True, the number of people without health insurance was reduced from 13% of the state’s population to 7%, but when the bill was passed, advocates promised that “all Massachusetts citizens will have health insurance.” Perhaps it depends on your definition of “all.”
  • Most of those who are signing up are low‐​income individuals, whose coverage is fully or partially subsidized, proving once again that if you give something away for free people will take it. It certainly appears that it is the expensive and generous Massachusetts subsidies (up to 300% of the poverty level), not the unprecedented individual mandate that is responsible for much of the increased coverage.
  • Adverse selection remains a big problem, with the young and healthy failing to comply with the mandate. The state refused to change its community rating laws which drive up the cost of insurance for young, healthy individuals. Not surprisingly, they don’t find this a good deal.
  • The program is far exceeding its projected costs, with at least a 33% budget overrun in its first year.
  • The program has increased demand for health care services without increasing the supply of providers. As a result, patients are having trouble finding providers and waiting lists (Canada here we come) are beginning to develop.

If this is success, I would hate to see failure.