MAR. 31, 2016 • BY JON HURST

They said it would get rid of the free riders, require personal responsibility, and therefore prevent unfair cost shifts. They said it would mean lower costs as the newly insured would stop using high cost and unnecessary emergency rooms and instead go to the proper setting for the proper care. They said it would help our local hospitals by better managing federal Medicaid money, which in turn would help stop unfair cross subsidies from commercial payers to providers covering government funded patients. They said it would create more competition, choices, defined contribution options and lower costs for small businesses and their employees through a state exchange.

And so on April 12, 2006 Chapter 58, or “RomneyCare” was signed into law; to be essentially copied—but also in too many ways to be preempted by the ACA (ObamaCare) four years later.

It is important on this 10 year anniversary to look at the political promises of both RomneyCare, and then the national version ObamaCare, and to determine the outcomes. In truth, none of the above promises have been achieved; but rather the consequences have created huge cost increases for small businesses, while enriching the largest providers and pharma companies. And looking back at the big money interests behind the efforts on both Beacon Hill and Capitol Hill, are we really surprised?

Yes, we have gone from 9% uninsured to 3%, but those newly insured individuals are almost entirely taxpayer supported—the same folks we have always supported through Medicaid and the hospital uncompensated care pool. The hospital emergency room visits have expanded—not reduced. Medicaid costs have exploded to 40% of the state budget. The uncompensated care pool still exists. And our community hospitals are in danger because too many fully insured consumers today are going to the extremely costly (but not higher quality) Boston teaching hospitals instead of getting quality, affordable care in their communities.

But by far the biggest failing of both laws has been the discriminatory cost shifts to small business and to their employees. Make no mistake about it: consumers on the extreme ends of the spectrum have either been helped (taxpayer subsidized individuals), or at least not harmed (those working for big, experience rated, or self-insured businesses or government employers). But those in the middle have been hammered.

Instead of freeing consumers and taxpayers of “free riders,” those costs have been placed unfairly and disproportionately on the backs of small businesses of 50 and under, and on their employees. Discrimination due to government selected risk pools have created three classes of consumers: 1. Those being subsidized by taxpayers & premium payers; 2. Those overly subsidizing others through both their taxes and their premiums (small businesses/consumer groups of 50 lives & under); and 3. Those working for large employers (50 & over) which are exempted from the premium cross-subsidies and therefore subsidize only through their tax dollars.

And that RAM members, is why our Main Street members have seen an incredible annual average premium increase of 12% since the passage of RomneyCare; while the state employee buying group (GIC) has seen an average of 4.5%; and the taxpayer subsidized consumer buying through the Connector has seen 1.76%. All during a period of time in which inflation has averaged 1.97%.

I find it inconceivable that employees of small businesses are 2, 3, or 5 times sicker than those individuals receiving taxpayer subsidized plans, or those insured through large employers in order to justify those premium disparities.

Ten years later we all know that big healthcare in Massachusetts has had explosive payroll and profitability growth, and that must be addressed. But equally important as the growth of healthcare, is the question of how those costs are being distributed. Small businesses compete every day with big businesses not only for customers, but also for employees. Bad public policy decisions in health insurance regulation have rigged the system against Main Street on healthcare costs, and we must demand a fix now.

Share this post:


Comments 0-5 of 0

Please login to comment