Commonwealth Care's Perfect Storm

An editorial in today's GLOBE calls for action on a number of bills before the Massachusetts Legislature, before the session ends in a few days.

Both the Senate and the House have bills that would take steps to cut back on rising health care costs. How? Simply by limiting drug companies from plying physicians with free lunches. Once under the spell of the free eats, the Docs are suspected of prescribing new drugs which are said to be more costly but not necessarily more effective than existing drugs. So let's follow the logic here: The Docs stop getting free lunches, and as a result, become more effective in prescribing drugs, thus lowering health care costs. Is this the best idea the Solons could come up with?

In the same editorial, the Globe pushes for passage of a Senate bill that broadens the mandate for coverage under the state's mental parity law. As it now stands, insurers can limit treatment for such conditions as eating disorders and substance abuse to 24 outpatient sessions or 60 days of hospitalization per year. If the bill is passed, these caps would be lifted and it would become easier for the state's mental health commissioner to add other "illnesses" to the list of required coverage. Here we go again. The Legislature lays another mandate on the insurance industry. What do you think this does to the cost of health insurance? If you said lower it, you are wrong. Mandates increase premiums.

An ARTICLE in today's Wall Street Journal on The high (and getting higher) cost of Commonwealth Care, makes the point that the cost increases associated with coverage mandates, such as fertility treatments, that have been legislated into law, were previously ignored because the bulk of these increases were borne by individuals and small businesses. Now that more and more people are signing up for the heavily-subsidized coverage the costs of the mandates are falling back on the state. And these costs are not insignificant:

"A state-sponsored study shows that total spending on mandates was $1.32 billion
in 2005, or 12% of premiums."


We seem to be seeing the financial clouds and pressure systems of a perfect fiscal storm beginning to form over Commonwealth Care. Governor Patrick has recently proposed an increase of $130 million to business's' cost of providing health insurance, arguing that business has not paid its fair share. In a RELEASE by Associated Industries of Massachusetts, it is noted that Massachusetts Employers pay $11.8 billion annually for their employees health care, including $ million of increased costs resulting from health care reform.Mass Business to Deval: No thanks, we gave at the office.

It's like driving with one foot on the gas and one on the brake. Pressure for no cost, or lo cost insurance, complete with mandated coverages, and we will pay for it with more taxes on business and eliminating free lunches for doctors.

The final piece of the puzzle should be unveiled any day now as the Federal Department of Health and Human Services is poised to issue a decision on the extension of the Medicaid waiver that is being used to partially fund Commonwealth Care. If the Feds don't renew the waiver, the prefect fiscal storm will be upon us in biblical proportions. It will be interesting, to say the least, to watch the Guv bail his way out of that.