Tuesday, December 18, 2007
The Connector Now Moves To Price Controls!
By Michael Bond
Filed As: Health Care
Well what do you know! The Massachusetts Connector, a guaranteed issue, community rating fiasco has now moved to new lows trying to deal with its unworkable design.
The good aspects of health insurance exchanges (plan choice, real prices, combining spouse employer and dual employment contributions, and actuarially fair prices) have been destroyed by narrow risk bands (de facto community rating) and guaranteed issue. The solution to this self imposed problem? We simply will pay doctors below market Medicaid rates. After all, there are no quality and/or rationing issues when prices are set below equilibrium rates. That’s just some nonsense from every economist worth their salt on this planet. Indeed, that’s what Bill Clinton’s "health alliances" would have done had they not been defeated by a Democrat Congress. From CAHI:
Here's how the Boston Globe put it last week: "Striving to hold down costs to taxpayers, a state panel [i.e., the Connector Authority] yesterday approved a range of changes for next year for the rapidly growing subsidized health insurance program. The changes will probably cut payments to doctors and hospitals, reduce choices for patients, and possibly increase how much patients have to pay." After leaning on the participating health insurers to keep initial rates low -- artificially low, so defenders could claim victory for controlling costs -- plans are facing as much as a 14 percent increase. So Commonwealth Care, the subsidized program for modest-income workers, will cut health care provider reimbursements by 3 to 5 percent, according to the Globe. Said Connector Authority CFO Patrick Holland, "There's no justification to be paying more than Medicaid rates."- posted by Michael Bond
- 7:39 pm
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