{"id":568097,"date":"2010-05-17T19:27:26","date_gmt":"2010-05-17T23:27:26","guid":{"rendered":"tag:theatlantic.com,2010-05-17:mt-56865"},"modified":"2010-05-17T19:27:26","modified_gmt":"2010-05-17T23:27:26","slug":"massachusetts-insurers-post-big-losses","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/568097","title":{"rendered":"Massachusetts Insurers Post Big Losses"},"content":{"rendered":"

When MassCare passed, it was supposed to lower the average cost of healthcare 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.  The bill for the uninsured only dropped by about 40%; the young, cheap people turned out to almost all need subsidies, and worse, some of them figured out how to game the system<\/a> by buying insurance, getting a bunch of expensive procedures, and then dropping the insurance again.  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.<\/p>\n

The Massachusetts governor’s answer to this problem was to
\nsimply deny the Massachusetts insurers the right to raise their
\nprices.  Then, when they refused to quote prices on the exchange at the
\nold, controlled prices, the government essentially argued that they
\nwere a bunch of whiny liars who didn’t need all that extra money, and
\ncommanded them to list their insurance at the old prices.  As far as I
\nknow, they never did find an actuary to sign off on the mandated
\nprices, but the insurers lost their hearing.<\/p>\n

Well, now the whiny liars have upped the ante, claiming that they lost a bunch of money in the first three months of 2010<\/a>,
\nmostly thanks to the extra money they had to reserve against the losses
\nthey anticipate under the new rates.  It will be interesting to see
\nwhether we get another War on Accounting, where Deval Patrick accuses
\nthe state’s biggest insurers of the dastardly use of Generally Accepted
\nAccounting Principles in order to embarrass his awesome government
\nprogram.<\/p>\n

And indeed, it’s not impossible that there’s a
\nstrategic element to this; there’s always discretion in how companies
\nreserve for losses.  There is also always the possibility of accounting
\nerror.  But those possibilities are not unlimited, because financials
\nhave to be signed off on by auditors who are keenly alive to the
\npossibility of ending up on the wrong side of a lawsuit if they wink at
\nobviously misleading representations.  And four different companies
\nprobably didn’t all make the same accounting error.<\/p>\n

There’s a
\ndepressing possibility, even a likelihood, that this is our future. 
\nIt’s hard to simultaneously expand demand, while lowering the
\nincentives for supply (i.e. Medicare reimbursements), without having
\nsome pretty dramatic mismatches between the two.  There’s an old adage
\ncommon in restaurants and engineering that goes “Good.  Fast. Cheap. Pick Two.” 
\nChange that middle word to “Universal” and you’ve got a pretty good
\nsummation of the problem that Massachusetts now faces–and that the
\nrest of us soon will.

\n

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\n
\nInsurance<\/a> – Deval Patrick<\/a> – Massachusetts<\/a> – Health care<\/a> – Governor of Massachusetts<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When MassCare passed, it was supposed to lower the average cost of healthcare 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.  The bill for the uninsured only dropped by about 40%; the young, cheap people turned out […]<\/p>\n","protected":false},"author":80,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-568097","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/568097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/80"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=568097"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/568097\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=568097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=568097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=568097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}