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Thursday, October 08, 2009

Lessons from the States

Peter Suderman has a great article in the Wall St. Journal's opinions page about lessons we've learned from the states when it comes to health care reform and mandates.

The Lesson of State Health-Care Reforms points out some inconvenient truths; to borrow a phrase; about health care reform. Specifically, those things that we are being told from Washington will reduce our costs have done just the opposite in the states.

He points out numerous states, New York, Maine, Kentucky, Tennessee, Massachusetts, Vermont, and New Jersey that have tried things like community rating (rates based strictly on age, not risk) and guaranteed issuance (pre-existing conditions ignored) and mandated coverage. What they found is that each of them, in their own way, increased the cost of insurance, and didn't significantly decrease the number of uninsured.

Sounds counter intuitive that mandated coverage wouldn't decrease the number of uninsured, but, as Massachusetts has found out, if the penalty isn't big enough to be a problem, people will still ignore the mandate. They've also found out that with community rating and guaranteed issuance many people buy coverage when they find out they are sick, then drop it when the treatment ends.

Wisconsin was added to the list of failed state initiatives this week, when it's Badgercare Plus, for childless adults announced it couldn't afford to let anyone else into the program after this Friday. Like "Cash for Clunkers" it ran out of money long before anticipated, three months instead of a year.

While Wisconsin Governor Jim Doyle says that Badgercare Plus's problem shows we need national health reform, he doesn't mention that we should probably multiply the cost estimates by four to actually have enough money to pay for it. Then again, that's probably a wise thing to ignore. If folks were told we'd need 4 trillion over ten years, or even 3.4 trillion for the Senate package, everyone would be at the tea parties.

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