Obamacare

A Raw Deal in Massachusetts

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Scott Brown's campaign has been telling Massachusetts voters that the candidate opposes national health care reform on the grounds that it would prove a "raw deal" for voters in his home state. A Brown spokesman told Politico's Ben Smith:

"In Massachusetts, 98 percent of residents are covered by insurance through our own state reforms. The plan is not perfect, and we need to get costs down, but we have already achieved near-universal coverage. There is nothing for us in a national plan except higher taxes and more spending to finance coverage expansions in other states. It's a raw deal for Massachusetts."

Judging by this report at The Daily Caller, that's a sentiment shared by a lot of Massachusetts residents.

Brown gained ground by arguing that because the state already has near-universal coverage, Massachusetts taxpayers don't need to pay more for the rest of the country to get it too.

"Scott Brown has repeatedly been saying, 'Why do we need to pay for this? We already have our plan and now we're going to pay for everyone else to be covered,'" Paleologos said.

It's worth noting, though, that by many measures the Massachusetts plan itself has been a raw deal for the state's residents. As I've noted elsewhere, its overall costs are ballooning out of control, with state insurance commissioners and independent analysts warning that, without significant changes, the program is probably not sustainable. Meanwhile, the state's insurance premiums are the highest in the country, and more double-digit rate hikes are expected.

Supporters of the program point to its uninsured rate, the lowest in the nation. But as a new study from University of Kentucky economist Aaron Yelowitz and Cato's Michael Cannon indicates, that figure may not be quite the selling point it seems:

We find evidence that Massachusetts' individual mandate induces uninsured residents to conceal their true insurance status. Even setting that source of bias aside, we find the official estimate reported by the Commonwealth almost certainly overstates the law's impact on insurance coverage, likely by 45 percent. In contrast to previous studies, we find evidence of substantial crowdout of private coverage among low-income adults and children. The law appears to have compressed self-reported health outcomes, without necessarily improving overall health. Our results suggest that more than 60 percent fewer young adults are relocating to Massachusetts as a result of the law. Finally, we conclude that leading estimates understate the law's cost by at least one third, and likely more.

The study looks at the survey methodology used to figure out how many individuals in the state are insured and concludes that there's strong circumstantial evidence that the results are skewed toward overcounting the number of insured. Why? Because the state's individual mandate makes it illegal to be uninsured, meaning individuals are less likely to admit that they aren't. It's difficult to definitively determine the exact effects of this sort of bias, but Yellowitz and Cannon make a good case that the 98-percent-insured figure is probably off by quite a bit.