Health Reform: Massachusetts Premium Caps

Is the Patrick Administration's decision to unilaterally cap heath insurance premiums a prelude to what the nation can expect under the new health reform law?

The Massachusetts and U.S. laws both expand access to coverage without doing anything meaningful to lower costs. Coverage cannot be denied, yet the cost of coverage continues to rise. It is also a sad truth that people who need health insurance are willing to pay whatever it costs, while the healthy will take their chances. This further increases the cost of insurance, as the risk pool worsens.

Massachusetts has experienced exactly this phenomenon. Despite near universal coverage, the cost of care rises. Small businesses are affected most because they are rated in the same pool as newly insured individuals, many of whom are expensive. Small business and the Governor believe that insurance companies are to blame. Someone should look at the effects of the health reform law itself. "We have met the enemy and they is us".

In this strange atmosphere, where the underlying medical cost (i.e. price) problem is ignored, what is there to do but act arbitrarily? Until we get serious about what is really driving health care costs, the implementation of our health reform laws will be like a bad, formula-driven movie -in the end, quite unsatisfying.