Massachusetts Coverage Update

Cross-posted from State House Call.

By John LaPlante

A new study shows insurance premiums in Massachusetts climbed 50 percent faster than the national average between 2006 and 2008. Nearly a quarter (24.6 percent) of “workers in firms with <51 employees” pay twice as much to their premium as the state average, up from 16 percent of similar workers in 2006. So much for minimum creditable coverage and consumer protections making insurance more affordable.

Workers in small firms were also more than three times as likely to have high out-of-pocket spending (14.6 percent of such workers in 2008 compared to 4.7 percent in 2006).

On the other hand, the authors note other data in their study suggest “the increasing out-of-pocket spending was not interfering with workers’ ability to get the medical care and prescription drugs that they felt they needed.”

One factor that may be contributing to the finding that rising out-of-pocket health care spending was not affecting access to needed care is the increased availability of flexible spending accounts to pay for out of pocket costs. The share of all workers reporting that they had such an account rose from 19.4 percent in fall 2006 to 28.5 percent in fall 2008 (Exhibit 2). Among workers in small firms, the share also rose, from 12.2 percent in fall 2006 to 20.5 percent in fall 2008.

So the one positive effect of RomneyCare is that more people control their own funds. Seems like a convoluted and costly way to make the system more consumer-driven.