Comments and observations on social and political trends and events.

Tuesday, May 18, 2010

Massachusetts Insurers Post Big Losses - Business - The Atlantic

Massachusetts Insurers Post Big Losses - Business - The Atlantic

Here are key quotes from the beginning and end of McArdle's blog entry.

When MassCare passed, it was supposed to lower the average cost of health care by getting relatively cheap young people into the system, and ending the inefficiencies of caring for the uninsured. Unfortunately, it hasn't quite worked out that way. ... There was a brief improvement in insurance prices for the individual market, because Massachusetts, with its community rating and
guaranteed issue, had had a pretty sizable problem with adverse selection.
But after a few years, insurance costs were still marching briskly upward, rates were among the highest in the country, and the system was putting heavy pressure on a budget that was already strained to the limit by the recession.

There's a depressing possibility, even a likelihood, that this is our
future. It's hard to simultaneously expand demand, while lowering the
incentives for supply (i.e. Medicare reimbursements), without having some pretty dramatic mismatches between the two. There's an old adage common in restaurants and engineering that goes "Good. Fast. Cheap. Pick Two." Change that middle word to "Universal" and you've got a pretty good summation of the problem that Massachusetts now faces--and that the rest of us soon will.

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