Colorado keeping watch on Mass. health care plan

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As Massachusetts implements its universal health insurance law, the state will be under the watchful eye of health care administrators in Colorado, where 700,000 people do not have health insurance of any kind.
The legislation requires that Massachusetts’ 6.3 million residents have health insurance by July 1, 2007. No new taxes are planned, and the governor vetoed a section of the bill that required businesses with more than 10 employees that do not offer insurance to pay $295 annually for each worker.
Leaders of the Massachusetts legislature have indicated they will override the veto, saying the money is needed to help fund the program.
The cost of the health care package was put at $316 million for the first year, rising to more than $1 billion by the third year. The state expects much of the money to come from federal reimbursements and existing state revenue.
According to the legislation, residents with health insurance will see their contributions fall, and the poor will receive improved coverage and public subsidies to help them pay. Currently about 515,000 people in Massachusetts do not have health insurance. The law provides subsidies and sliding-scale premiums for the poor, while those deemed wealthy enough to afford insurance will face escalating tax penalties if they don’t buy policies.
One person who will be watching the plan closely is Memorial Health Systems’ John Suits. As associate administrator of business and government affairs, Suits is responsible for advocating for health care policies on behalf of Memorial, as well as tracking health care bills in the state legislature.
“It’s too early to tell what the Massachusetts law will look like in practice,” he said. “It’s not a single payer system; I applaud the state for their efforts to fix a problem that plagues all of us.”
Suits said that he has two questions: who will police the system, and what is the reimbursement level for providers?
“We’re certainly interested in watching the state, seeing what happens,” he said. “We’re required to take all patients, regardless of ability to pay. Last year, that meant that we had a cost of $35 million in uncompensated medical care. It’s a big issue for us.”
If steps are not taken to address the issue of burgeoning health care costs, and the rising number of uninsured people in Colorado, Suits said the state will likely have to consider a Massachusetts-like bill.
“In Denver, there are people who want to look at something similar in the very near future,” he said. “At some point, I think we’ll very likely look for similar coverage to the Massachusetts bill – with maybe three or four payers in the entire state.”
Dr. William Mandel, a member of the El Paso Medical Society and a Colorado Springs physician, said that the bill indicates a need for reform.
“It depends on how the program is deployed,” he said. “But we definitely need some type of safety net that covers basic medical needs, such as prenatal care, immunizations, diabetic care, depression, catastrophic coverage.”
Health care reform remains a big issue in Colorado and throughout the country. Colorado is considering legislation that would require companies with more than 3,000 employees to offer health insurance, or pay 10 percent of their profits to a fund that would provide health insurance.
Mandel calls it the “Wal-Mart bill,” and notes that similar legislation recently passed in Maryland.
Estimates are that the United States spends about 16 percent of the gross domestic product on health care.
Carole Shofstall, dean of the Beth-El College of Nursing and Health Sciences at the University of Colorado at Colorado Springs, said that the Massachusetts law is a good one.
“I can’t wait for a few more states to do it, so we can see how it’s going to work,” she said. “I honestly think it’s the only thing that will keep health care financially viable – to spread the costs.”
Health care coverage has become disjointed in the United States, Shofstall said.
“We have the most expensive system in the world,” she said. “But we don’t deliver quality care to every segment of the population. We’re the only industrialized country that does not provide universal health care – with the exception of South Africa. Some people talk about the quality of those systems, but the reality is that it’s much less cost for a very good system. It provides a lot of security. And if the Canadians spent as much money as we do right now on health care, then they would have a fabulous system.”
Shofstall said that the legislation will provide a model to deliver health care to the largest number of people.
“Some people are afraid that it would lower the quality,” she said. “But people with insurance would continue to have good quality health care; they would do it at less expense. We’re already providing for most people who don’t have health insurance, it’s just poorly delivered through a variety of programs, instead of just a single program.”
While Shofstall and Mandel said they believe the legislation will ultimately reduces prices, Dr. Yaron Brook at the Ayn Rand Institute said the opposite will happen: government intervention will increase prices, and quality health care will no longer be available in the United States.
“There is no fundamental right to health care,” he said. “And the consequences (of the legislation) will be hurtful to the economy. We’ve estimated that this bill establishes an unfunded liability of up to $700 million.”
Brook said the legislation was a “violation of rights”: the right of people to decide if they want insurance or not; the right of the insurance industry to determine who to insure and what packages to offer; and the right of employers to offer insurance or not.
“This legislation regiments policies for everyone,” he said. “Small businesses will be unable to compete, thanks to the additional cost of insurance. It’s one reason for the massive outsourcing of jobs – the high cost of health care.”
Brook said the government should allow health care to become completely private – shutting down such programs as Medicare and Medicaid. Those programs cause hugely inflated prices, he said.
“When this program fails – and I have no doubt it will fail – it will increase the burden on government, increase the pressure to socialize,” he said. “But true health care reform, and lowering of prices, can only come from the government staying out. It’s true of any privatized sector: prices drop when the government is no longer involved.”
The answer lies in more health savings accounts, a solution favored by the Bush administration, said Brook. The accounts allow people to save pre-tax dollars in special accounts for health care costs. Brook said the accounts should be universal and the tax incentives increased.
“The responsibility for health care costs lie with the individual,” he said. “When the government gets involved, the economic costs increase – the Defense Department buys $1,000 hammers. The costs will go down to a rational level once the government is out – there will be real market incentives to lower prices.”