RomneyCare: More Price Controls On the Way?

The Massachusetts health care overhaul signed into law by Mitt Romney is similar to the federal plan signed into law two years ago by President Obama in all the most important ways: Both laws seek to increase health insurance coverage through a combination of insurance subsidies and expanded Medicaid enrollment; both laws contain an individual mandate to purchase coverage; both laws rely on state-run health insurance exchanges to regulate insurers and the types of plans they offer. 

But there are some differences. One notable difference is that the federal overhaul merely gives the Health and Human Services Secretary the power to label rate increases "excessive" and publicize them as such. It's the power to shame insurers rather than to explicitly block or cap their rates. 

Massachusetts, on the other hand, retains the power to reject health insurance rate increases outright should state officials deem the increases excessive. This power became a major issue in 2010 when the state rejected about 90 percent of proposed increases in the individual insurance market, effectively shutting down the market for a brief period of time. 

So as it stands, the Massachusetts health system mandates the purchase of insurance, subsidizes individual insurance buyers, regulates the plans that that insurers can sell, and sweeps low-income individuals into Medicaid, a government-managed plan.

But apparently this isn't enough for at least one state official, Massachusetts Attorney General Martha Coakley. According to The Boston Globe, Coakley is circulating draft legislation aiming to control the prices that insurers pay to health providers: "Providers and insurers would have to provide detailed price information to patients before they undergo a test or treatment, and the Division of Insurance and Department of Public Health would have new authority to limit the prices and market power of providers under Coakley’s proposal." 

The legislation is still in draft form; Coakley may not get the power she's asking for. But it is notable simply that she wants it, just as it is notable that Democrats initially wanted to give the federal government the power to reject rate hikes rather than merely publicize them. Given the similarities between the two laws, Massachusetts is the best real-world model for what we can expect from the national law. If Coakley is asking for this power now, it's a good prediction that that federal authorities will eventually request similar authority.

Meanwhile, it puts the law's defenders in a bit of an awkward place. Defenders of the Massachusetts health care overhaul continue to insist that it is working, despite rising insurance costs and an unsustainable health spending burden, but also that the system requires still more regulation and oversight. Any remaining problems, apparently, are caused by the few parts of the system they don't yet control. 

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  • tarran||

    It's the fucking socialist calculation problem...

    God! No amount of evidence will cure the Democrats of their fundamentalist adherence to the economically creationist dogmas of coercive socialism.

    Sigh... at least they're not executing Quakers anymore.

  • SugarFree||

  • Paul.||

    If Coakley is asking for this power now, it's a good prediction that that federal authorities will eventually request similar authority.

    It's always safe to assume that if federal regulators don't have the power to __________ now, they'll eventually request the power to ____________ eventually.

  • mb||

    Coakley is evil. I held my nose voting for the underwear guy (can't remember his name) and I'll do it again, since it will be another evil liberal Warren. Seriously I am surprised Coakley doesn't make these pages every week - you guys should follow her more closely - good material.

  • PapayaSF||

    I loved a description I read of her Senate campaign: "It wasn't the Hindenburg or the Titanic, it was the Hindenburg crashing into the Titanic."

  • GW||

    I can't wait until california just implodes because of liberal policies like this. Looks like MA may be close behind.

  • JeremyR||

    I just found out (from a post by a guy who hates Libertarians) that you guys used to support the mandate (that was the reason he gave for hating Libertarians).

    While I suppose it's good you didn't airbrush this, why on Earth is this guy still working for you? Why don't you mention you used to be for the health mandate?

  • JeremyR||

    Hmmm, though it won't let me post the url, even though it links to your own site

    But it's from your November 2004 issue, written by Ronald Bailey

  • LarryA||

    What Bailey suggested was mandating that everyone purchase at least a basic high-deductable plan from a private insurer. That would eliminate employer health plans, returning choice to the people who use the plans. As a result the people using the health care would be the ones paying for it, and would have every incentive to shop carefully among the competing plans. Insurance companies would have to offer what the customers wanted at reasonable prices. The customers would be more careful about what health care they purchased. And the customers would suddenly realize how much government regulation increases health costs, and scream or vote until Congress got the message.

    That's a bit different from mandating that everyone buy a government-designed plan hung with all the bells and whistles Congress can tie to it, where there's every incentive to schedule a "free" doctor visit every time you need aspirin.

  • Len Bias||

    If your friend hates libertarians for because one libertarian supported a mandate 8 years ago, then by that standard he should hate every party, because Dems and Reps have been known to support it.

  • Drake||

    I was born and raised in MA, but I will never move back. I would lose my shit with the fucking assholes that get elected there. Far worse than the typical assholes that get elected everywhere else.

  • ||

    Why.. why is the fucking state AG asking for this authority? Ugh, welcome to Massachusetts.

    Extra fun to be reminded of this bullshit on this (late) Tax Day, I just e-filed my MA return because I had to search around for the 1099-HC form sent months back.

    Get this, on that correspondence:

    Your Blue Cross Blue Shield of Massachusetts health plan does not meet MCC standards on its own; however, your employer has represented to Blue Cross Blue Shield of Massachusetts that the overall package of benefits provided to you through your employer does meet MCC standards. On behalf of your employer, Blue Cross Blue Shield of Massachusetts is issuing a 2011 Form MA 1099-HC, indicating that your coverage for the periods noted meets MCC standards

    Gee, thanks for doing me that solid guys. I have the average BCBS plan offered, and work for a large hospital. I can only imagine meeting this MCC ("minimum creditable care") mandate is going to be a treat to look forward to with new surprises every year.

  • LarryA||

    "MCC Standard" = If the guys who sell PowerBracelet TM and such stuff on late night TV can grease the right Representative they can get their "treatment" included in your health plan. Then they can offer it "at no cost to you" and bill RomneyCare.

    Which you end up paying for, one way or the other.

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