Pipes warns that the much–hailed compromise on health insurance in Massachusetts is likely to cost far more than initially advertised based on information revealed to bond markets.
Led by Republican Gov. Mitt Romney, supporters promised that health insurance could be provided with only a slight increase in expenditures. Skeptics at the time pointed out that this would not be possible, but were dismissed. Mr. Romney was celebrated as a bold innovator in the national press. Many governors have taken note and are reportedly looking at adopting similar plans. California is no exception. If re–elected, Gov. Schwarzenegger has said that health care reform will be the main platform in the 2007 State of the State address. It is likely that a Romney–style plan will be the cornerstone of his reform agenda.
The klieg lights are now off and the press has moved on to other stories. It's time to bring heaven to earth and make this thing work. What's the story?
Administration officials are now telling Wall Street they expect the plan to be quite expensive. In an Aug. 17 filing to support general obligation bonds, officials project that the new plan will increase Massachusetts government health spending by $276.4 million in 2007. That's a $151 million boost over what the public was told the plan would cost as recently as April. "Somebody once told me: if you want to know what is really going on in state government, look at the bond documents," the writers at HealthyBlog, who are tracking the details of the implementation process, pointed out, when posting the filings. "They can say whatever they want to the public, but they can go to jail for fibbing to Wall Street."
The filing reveals why Mr. Romney and friends had no problem getting consensus from the health community, legislative Democrats, and even Sen. Ted Kennedy, Massachusetts Democrat.
The plan provides $386 million in rate increases for "hospitals, physicians and managed care organizations." Current government programs get a boost of $85.2 million, restoring the gold-plating to Mass Medicaid benefits, that is, including dental and eye care, costing $51.7 million, and expanding MassHealth to families living at three times the poverty level added another $38 million.
Although federal taxpayers are expected to pick up some of this tab, the majority of it will fall on Bay State taxpayers. And the real bill will certainly be higher. The filing discloses that the plans being discussed by the panel for low income people will cost $25 million more than originally projected. This would put total first year costs north of $300 million.