Massachusetts Plan Will Exceed Cost Estimates
Officials of Massachusetts Gov. Mitt Romney's (R) administration are "now telling Wall Street that they expect" the state's new law requiring all residents to obtain health insurance by July 1, 2007, "to be quite expensive," even though "supporters promised that health insurance could be provided with only a slight increase in expenditures," Sally Pipes, president and CEO of the Pacific Research Institute, writes in a Washington Times opinion piece.
According to Pipes, officials now say "the new plan will increase Massachusetts government health spending by $276.4 million in 2007" -- a $151 million increase "over what the public was told the plan would cost as recently as April." She continues that an Aug. 17 bond filing "reveals why Mr. Romney and friends had no problem getting consensus from the health community" and Democratic leaders, noting that according to the filing, the plan calls for $386 million in rate increases for hospitals, physicians and managed care organizations.
In addition, current government programs will receive $85.2 million to restore state Medicaid dental and eye care benefits and expand eligibility of the MassHealth program, according to the filing. In addition, the filing also discloses that the "plans being discussed by the panel for low-income people will cost $25 million more than originally projected," which "would put total first-year costs north of $300 million," Pipes writes, adding, "Although federal taxpayers are expected to pick up some of this tab, the majority of it will fall on Bay State taxpayers."
She notes that some families will be expected to pay up to 7.7% of their annual income on subsidized health insurance, making it "hard to see how the state will get even close to the 100% participation rate." In addition, the $295 per employee contribution "ceiling" being imposed on employers to help fund the plan will likely "prove to be a floor" because "the extra money must come from somewhere," and "[s]tate activists, legislat[ors] and the Democratic gubernatorial hopeful are already grumbling that businesses need to pay more," according to Pipes (Pipes, Washington Times, 11/5).