Fred Bauer has poured over the new health care data in John F. Cogan’s, R. Glenn Hubbard’s, and Daniel P. Kessler’s “The Effect of Massachusetts’ Health Reform on Employer-Sponsored Insurance Premiums” report and points out that health care premiums in the Bay State have grown at a lower rate since the passage of Massachusetts’ signature health care law in 2006.
Relying on data “for average health-insurance premiums from the federally sponsored Medical Expenditure Panel Survey (MEPS), this report suggested that, up until 2008, these reforms led to a relative increase in health-insurance premiums.” But new numbers through 2010 shows that “Massachusetts’ health-insurance premium growth declined relative to the nation as a whole in the years since Romneycare has been enacted“:
Increase in employer-sponsored family premiums 2002-2006: MA: 40%; US: 34.50%
Increase in employer-sponsored family premiums 2006-2010: MA: 19%; US: 22%
Increase in individual premiums 2002-2006: MA: 32.70%; US: 29.10%
Increase in individual premiums 2006-2010: MA: 21.70%; US: 20%
While it’s difficult to know how much of the decrease can be attributed to the Massachusetts law — which focused on expanding access rather than controlling costs — (versus decline in utilization as a result of the recession and other factors), the very fact that the law did not meet the doomsday scenario of critics and cause premiums to skyrocket is significant. (In fact, Massachusetts had the third-lowest average family premiums in New England by 2010, Bauer notes).
Ezra Klein notes that we may already be seeing a very similar trend with the Affordable Care Act, which grew out of the Massachusetts experience. The latest spending projections found a “$275 billion (5.6 percent) reduction [in health care spending] for 2020, compared with pre-reform estimates. Moreover, that projection represents a cumulative reduction of $1.7 trillion over the 10 years from 2011 to 2020.” The numbers suggest that providers may be becoming more efficient in preparation for the ACA’s reductions in Medicare reimbursements and updates.