romney care policy study

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BHIPolicyStudyJune2011

TheHighPriceofMassachusettsHealthCareReform

DavidG.Tuerck,PhD

PaulBachman, MSIE

MichaelHead,MSEP

THEBEACONHILLINSTITUTEATSUFFOLKUNIVERSITY

8AshburtonPlace

Boston,MA02108

Tel6175738750,Fax6179944279

Email:[email protected],Web:www.beaconhill.org

B

eacon

HillInstitute


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TheHighPriceofMassachusettsHealthCareReform/June20112

TableofContentsExecutiveSummary.....................................................................................4Introduction..................................................................................................7

HealthCareReforminMassachusetts.................................................................................. 7CurrentCostEstimates.......................................................................................................... 10TheBHIEstimates.................................................................................................................. 13

Conclusion..................................................................................................19Methodology..............................................................................................20References...................................................................................................28AbouttheAuthors.....................................................................................31


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TheBeaconHillInstituteatSuffolkUniversity/June2011 3

TableofTables&Figures

Table1:EffectofHealthCareReformonHHSandMedicaidSpending($m)............................................ 14Table2:EffectofHealthCareReformonHHS&MedicaidwithNationalGrowthRates($m).............. 14Table3:ReallocationofHHSandMedicaidSpending($m) .......................................................................... 15Table4:EffectsofHealthCareReformonAverageHealthInsurancePremiums ...................................... 16Table5:EffectsofHealthcareReformonTotalHealthInsuranceCosts ...................................................... 17Table6:EffectsofHealthCareReformonMedicareSpendinginMassachusetts..................................... 17Table7:EffectsofHealthCareReformonthePrivateSectorInsurancePremiums................................... 23Table8:StateHHSSpending($m)....................................................................................................................... 24Table9:StateMedicaidSpending($m)............................................................................................................... 24Table10:MedicareAdvantagePlanRate($perMonth) .................................................................................. 24Table11:MedicarePersonalHealthCareExpenditures($m) ......................................................................... 26Table12:InsuranceCosts,AverageSinglePlanPremium($perYear)......................................................... 26Table13:InsuranceCosts,AverageFamilyPlanPremium($perYear)........................................................ 27


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Executive Summary

In 2006, Massachusetts enacted landmark health care reform legislation that promised

toextendhealthcarecoveragetoallcitizenswhilesignificantlyloweringcosts. Thelaw

imposesmandatesonresidentstoobtainhealthinsuranceandonemployerswith11or

more employees to provide health insurance for their employees. It also expands

Medicaidcoverage and establishes a health insurancesubsidyprogram. Additionally,

itcreatesaninsuranceexchange,theMassachusettsHealthInsuranceConnector,which

helps individuals who are not eligible for Medicaid purchase competitivelypriced

healthplans.

Nowthatthelawhasbeenineffectformorethanfiveyears,wecanbegintoassessits

impact on the state of Massachusetts. Several studies have quantified the effect of

Massachusetts health care reform on the statebudget and health insurance premiums,

buttodatenostudyhassetouttocalculatetheaggregatecostofthehealthcarereformlaw.1

In this study, the Beacon Hill Institute at Suffolk University (BHI) attempts to fill the

gapbycalculatingtheeffectofhealthcarereformonstateandfederalgovernmentsand

theprivatehealthinsurancemarkets,includingemployeecontributionstotheirprivate

insuranceplans. Wefindthat,underhealthcarereform:

Statehealthcareexpenditureshaverisenby$414millionovertheperiod; Privatehealthinsurancecostshaverisenby$4.311billionovertheperiod; The federal government has spent an additional $2.418billion on Medicaid for

Massachusetts.

Overthisperiod,Medicareexpendituresincreasedby$1.426billion; Foratotalcumulativecostof$8.569billionovertheperiod;and The state has been able to shift the majority of the costs to the federal

government.

The federal government continues to absorb a significant cost of health care reform

throughenhancedMedicaidpaymentsandtheMedicareprogram. Healthcarereform

hasalsoincreased therateforMedicareAdvantage plansinMassachusetts,whichhascontributed to an increase in Medicare health care expenditures through prices for

medicalservicedelivery.

1SeeJohnF.Cogan,GlenHubbard,andDanielKessler,TheEffectofMassachusettsHealthReformon

Employer SponsoredInsurancePremiums,ForumforHealthEconomics&Policy13,no.2,http://www.bepress.com/fhep/13/2/5/(accessedDecember,2010).


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We estimate the effects of health care reformby comparing the actual value of each

variable with the value it would have had,based on recent trends, had health care

reformnotbeenimplemented. Weusetheyear2006(theyearreformwasenacted)and

year 2007 (first full year of implementation) as alternative event dates in separate

analyses. We also compare the growth in the expenditure variable in Massachusetts

aftertheeventdatewiththegrowthrateofthesamevariableintheUnitedStatesasa

whole, in order to exclude national factors that have contributed to the Massachusetts

growthrate.

Costcontainmentisoftenamajorgoalofhealthreformplans.However,thisparticular

health care reform legislation did not provide an effective means for containing costs.

Thepromiseofcostcontainmentrestedonavaguehopethatthenewlyinsuredwould

seek preventive care, access their primary care physicians earlier in their illness and

avoid costly emergency room visits. Yet, the number of emergency room visits rose

from2.351millionin2006to2.521millionin2009,orby7.2%overtheperiod. Thetotal

costofemergencyvisitshassoaredby36%overtheperiod,orby$943million.2

Underhealthcarereform,thestateHealthSafetyNetFund(HSNF),previouslyknown

as the Uncompensated Care Fund, which provides payments to hospitals and

community health centers for delivering care to the uninsured and underinsured, has

seen payments dropby about $250 million from FY 2007 to FY 2008. However, the

HSNF paymentsbegantorise againinFY2009,possiblyduetotherecession. Infact,

theHSNF experienceda shortfall of$100 to$125 millioninFY2011,meaning that the

hospitalsandcommunityhealthcentershadtoabsorbtheselosses.3

It is clear that the healthcare reform law sparked increases in private health insurance

premiums. Premiumsforplanscoveringasinglepersonroseby$284peryearby2009

andincreasedfamilyplanpremiumsby$2,504peryear.

The vast number of the newly insured residents in Massachusetts is responsible for

bottlenecksinthe primarycaresystemthatforcesresidentstoutilizeemergencyroom

care at a significantly higher than expected rate.4 However, the promise of expanded

2SeeOfficeofHealthandHumanServices,HospitalSummaryUtilization,

http://www.mass.gov/?pageID=eohhs2subtopic&L=6&L0=Home&L1=Researcher&L2=Physical+Health+and+Treatment&L3=Health+Care+Delivery+System&L4=DHCFP+Data+Resources&L5=Hospital+Summary

+Utilization+Data&sid=Eeohhs2(accessedJune24,2011).3MassachusettsDepartmentofHealthandHumanServices,DivisionofHealthcareandFinancePolicy,

HealthSafetyNetAnnualReportsfor2010,2009,2008and2007,

http://www.mass.gov/Eeohhs2/docs/dhcfp/r/pubs/10/hsn_2010_annual_report.pdf(accessedJanuary

2010).4KayLazar,ManycontinuetorelyonERs,BostonGlobe,November29,2010,http://www.boston.com/news/local/massachusetts/articles/2008/11/29/many_continue_to_rely_on_ers/

(accessedDecember,2010).


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coverage at lower costs contradicts another basic economic theory. By increasing

demandforhealthcareserviceswithoutanequalincreaseintheirsupply,theuniversal

health care law guaranteed that the price of health care services and health insurance

would increase. Our findings are consistent with this most fundamental tenet of

economiclaw.


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Introduction

InApril2006,thenGovernorMittRomneysignedtheMassachusettshealthcarereform

(HRC) law, which entitled An Act Providing Access to Affordable, Quality,

Accountable

Health

Care.

At

the

time,

proponents,

including

Governor

Romney,

claimed that the law would not only expand coverage to all Massachusetts residents,

butalsoreducehealthcarecosts.5

Almost four yearslater,inMarch2010, PresidentObamasignedintolawThePatient

ProtectionandAffordableCareAct,which,somehavesaid,is essentiallyidentical to

theMassachusettslaw.6 The Presidentclaimed that thefederal law will lowerhealth

carecosts,guaranteemorehealthcarechoices,andenhancethequalityofhealthcare.7

If the federal law is modeled after the Massachusetts law, it stands to reason that

Massachusettsexperiencewithhealthcarereformprovidesanideaofwhatisinstore

for the country under the federal law. We now have five years of data to consider in

assessinghowwellhealthcarereformhasworkedoutforMassachusetts. Inthisstudy,

we provide estimates of the effects of Massachusetts health care reform on health care

costs as measuredby federal and state expenditures on health care andby the cost of

privateinsurance.

HealthCareReforminMassachusettsTheMassachusettshealthcarereformlawwasaboldattempttoattainuniversalhealth

insurancecoverageandreducehealthcarecosts. Thelawwastheculminationofthree

decades of state intervention in health care markets. An understanding of the long

standingimperfectionsofthestateshealthcaresystemiscriticaltounderstandingthe

forcesthatledtothepassageoftheMassachusettslaw.

In1974,MassachusettsjoinedMaryland, NewYorkandNewJerseyin ahospital rate

setting program that implemented annual revenue caps for acute care hospitals.8 The

regulatoryformulasbecamecomplexandcumbersomeforhospitalstoadminister.

5JosephRago,TheMassachusettsHealthCareTrainWreck:ThefutureofObamaCareisunfolding

here:Runawayspending,pricecontrols,evenlimitsoncareandmedicallicensing,WallStreetJournalhttp://online.wsj.com/article/SB10001424052748704324304575306861120760580.html,July7, 2010.6Ibid.7U.S.DepartmentofHealthandHumanServices,Healthcare.gov,UnderstandingtheAffordableCare

Act,http://www.healthcare.gov/law/introduction/index.html(accessedNovember2010).8JohnMcDonough,TheroadtouniversalhealthcoverageinMassachusetts,TheNewEnglandJournalofPublicPolicy20,no.1(2004):5763.


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In 1986, Congress enacted the Emergency Medical Treatment and Active Labor Act

requiringhospitalstoprovidecaretoanyoneneedingemergencyhealthcaretreatment

regardlessofcitizenship,legalstatusorabilitytopay. TheActfailedtoprovidefunds

to reimburse the hospitals.9 That year, Massachusetts established the Uncompensated

Care

Pool

to

cover

the

costs

of

providing

care

to

the

uninsured:

a

burden

that

previouslyfellontheindividualhospitals. Thepoolisfundedthroughasurchargeon

allpaymentsmadetohospitalsandambulatoryservicecentersandanassessmentpaid

bythehospitals. Tocovertheshortfallsbetweenrevenueandexpenses,thelegislature

oftenmadeappropriations.10

Twoyearslater,thestateenactedlegislationthatrequiredallemployerswithmorethan

five workers to provide health insurance or pay $1,680 per employee tax to help

providecoverage. Thelawalsoretained,butatthesametime,relaxedtheregulationof

hospitalbudgets. Other provisions included a health insurance mandate for all full

timecollegestudents,aswellasprogramsthatexpandedhealthinsurancecoverageto

the unemployed, disabled, children, lowincome pregnant women and new mothers.

However, given strong opposition from thebusiness community coupled with a

severe recession in the state economythe employer mandate was never

implemented.11

Governor William Weld, who took office in 1991, began to remove some of the

regulationsenactedinthe1970s. Inaddition,Weldbegananinitiativetoexpandhealth

insurancecoveragebyutilizingSection1115oftheSocialSecurityActFederalMedicaid

Research and Demonstration waiver. The plan was tobring hundreds of millions innew federal dollars into the state, subsidize employer coverage for lower income

workers, and repeal the 1988 employer mandate. The Weld administration advertised

theplanasuniversalcoveragewithoutanemployermandate. Subsequentlegislation

increasedMedicaideligibilityforchildren andadjusted theUncompensatedCarePool

financingformula. Later,thelegislatureaddedacigarettetaxincreaseof$0.25perpack

andaprescriptiondrugprogramforlowincomeseniors.12

TheWeldadministrationwasabletosecureadditionalfederalfundingforthiseffortby

convincing

the

federal

government

that

the

waiver

was

presumably

budget

neutral

9U.S.GovernmentPrintingOffice,Title42Examinationandtreatmentforemergencymedical

conditionsandwomeninlabor,42USC1395dd,(January2002)

http://law.justia.com/us/codes/title42/42usc1395dd.html(accessed September 29, 2010).10RobertW.Seifert,TheUncompensatedCarePool:SavingtheSafetyNet,Mass.HealthPolicyForum

IssueBrief 16,(October2002):132,http://www.ncbi.nlm.nih.gov/pubmed/12776714(accessedJune21,2011.11McDonough,59.12Ibid,60.


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(spending wouldbe at the same levels as without the waiver).13 As a result of the

flexibility providedby the waiver, Medicaid enrollments in Massachusetts exploded

from670,000in1995tooveronemillionin2001,oralmost16%ofthestatepopulation,

before droppingbackbelow one million. Furthermore, health care inflationbegan to

surgeasmorepeoplegainedaccesstoinsuredcare.

Thissituationposedadilemmatothestateofficials. Theyhadsecuredarenewalofthe

waiverin2002,butthewaiverwasupforrenewalagainin2005. Theyneededtosecure

continued federal supplemental funding commitments under the Medicaid waiver.

Withoutanextensionofthewaiver,thestatewouldhavebeenforcedtocoverthetotal

costsoftheexpandedMedicaidrolls(over$2billion)orreverttothestandardeligibility

rulesandreducetherolls.14 Thefirstoptionwouldhavecrippledthestatebudget,and

thesecondoptionwouldhaveforcedpoliticianstomakeunwantedcutsinhealthcare.15

Beginning in 2003, Governor Mitt Romneys Secretary of Health and Human Services,

Ron Preston,began working on a plan to expand access to health insurance evenfurther. Then,inApril2006,MassachusettsGovernorRomneysignedintolawChapter

58 which was designed to achieve universal access to health insurance for all

Massachusettsresidents. ThelawalsogaveMassachusettsanewprogramonwhichto

baseanextensionoftheMedicaidDemonstrationWaiver.

Keycomponentswere:

Anindividualmandate,requiringallresidentswiththefinancialmeanstoobtainhealth

insurance;

An employer mandate requiring all employers with 11 or more employees tomake a fair and reasonable contribution towards their employees health

insurance;

An expansion of Medicaid and creation of a health insurance subsidy programforresidentswithincomeupto300%ofthefederalpovertylevel;and

The creation of a quasipublic authority the Massachusetts Health InsuranceConnector (Connector) that would serve as an insurance exchange and

provide a sealofapproval to health insurance products that the Connector

deemedtobeofgoodvaluetoconsumers.

13JoshuaGreenbergandBarryZuckerman,StateHealthCareReforminMassachusetts:HowOneState

ExpandedHealthInsuranceforChildren,HealthAffairs16,no.4(1997):188.14Usingdatafromthe2004and2008MassachusettsComprehensiveAnnualFinancialReport,weaverage

theMedicaidrollsfor19951997,or691,000,andfor20032005,or961,000.Wemultiplythedifferenceof

(270,000)bytheaverageMedicaidexpenditurepercasefor2005($7,815)toarriveat$2.110billion.15McDonough,61.


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Supporters of the reform plan argued that it would enable all residents to obtain high

qualityhealthinsurance,easethefinancialburdenonhospitalsforprovidingcaretothe

uninsured, lower the cost of health insurance and eliminate joblockby providing

portabilityofinsurancethroughtheConnector. Akeyconceptthatproponentsusedto

generatesupportwasthatofsharedresponsibility. Tobeeffective,therationalewas

thatanyhealthcarereformproposalmustrequireindividualsandfamilies,employers

andgovernmenttosharetheburdenofexpandingcoverage.

CurrentCostEstimatesThelawhas achievedsuccessinincreasinghealthinsurancecoveragefrom91%ofthe

population in 2005 to 98.1% in 2010.16 However, the law has failed to deliver the

promised reductions in health care costs or to lessen the financialburden on hospitals

that serve a disproportionate percentage of uninsured and underinsured residents.17

Becausethesecostsandburdenshaveincreasedratherthandecreased,healthinsurance

premiums,particularlythosepaidbysmallbusiness,havecontinuedtorise.

OfficialsattheCommonwealthConnectorandothersupportersofthelawhavebecome

conspicuously silent on the issue of cost. The Division of Health Care Finance and

PolicyestimatesthatpercapitaspendingonhealthcareinMassachusettsis15%higher

than the rest of the nation, even when accounting for the states higher wages and

spendingonmedicalresearchandeducation.18 Nevertheless,eventhatreportdismisses

any direct connectionbetween higher costs in Massachusetts and the reform law. It

concludes that increasing health care costs are a national problem, not unique to

MassachusettsordirectlycausedbyChapter58sexpansionofaccesstocoverage.19

Thereportmistakenlyidentifiesmarketfailure,notpolicyfailure,asthedriverofrising

health care costs. It points to a wide variation in the prices that are paidby health

insurers, reflecting an imbalance in the health care marketplace that merits

intervention.20 Like most studies that identify market failure as the problem, the

reportrecommendsmoregovernmentinterventioninthehealthcaremarket,suchas:

16MassachusettsDepartmentofHealthandHumanServices,HealthInsuranceCoverageinMassachusetts:Resultsfromthe20082010MassachusettsHealthInsuranceSurveys,

http://www.mass.gov/Eeohhs2/docs/dhcfp/r/pubs/10/mhis_report_122010.pdf(accessedJanuary2011).17UrbanInstitute,EstimatesofHealthInsuranceCoverageinMassachusettsfromthe2009

MassachusettsHealthInsuranceSurvey,(October

2009).http://www.mass.gov/Eeohhs2/docs/dhcfp/r/pubs/09/his_policy_brief_estimates_oct2009.pdf.18DivisionofHealthCareFinanceandPolicy,MassachusettsHealthCareCostTrends:2010Final

Report,(April2010):1.19Ibid,2.20Ibid,3.


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Morehealthresourceplanning; Immediategovernmentoversightofhealthinsurancepremiumsandprovider

rates;

Legislativereviewofprovidercontractprovisionsthatmaynowlimitcompetition;and

Oversightanddirectionprovidedbyanindependentpublicentity.21According to one report, premiums in Massachusetts are growing 2146% faster than

the national average, in part as a result of the minimum creditable coverage

requirements for meeting the individual mandate.22 Massachusetts largest health

insurersinitiallysoughtdoubledigitpremiumincreasesin2010,withsmallbusinesses

and individuals to experience the greatest increase.23 Several insurers negotiated a

reduced increase with the state health insurance commission, while others continue to

bargainwiththestate.

In 2009, the Massachusetts Taxpayers Foundation (MTF) issued a report in which itestimated that health care spendingby Massachusetts would increaseby $707 million

fromFY2006toFY2010. AccordingtotheMTF,thefederalgovernmentpaidforhalfof

thisincrease,andthelawraisedtaxpayerhealthcarecostsby$353millionfrom2006

2010: anaverage increase of $88 million per year.24 However, as Cato Institute scholar

Michael Cannon points out, MTF assumes cuts in payments to safety net hospitals for

FY2010,whichareunlikelytomaterialize. Thesecutswouldreduceoverallspending

on health care reform,by $110 millionbetween FY 2009 and FY 2010.25 As noted

above,theHealthSafetyNetFundfailedtomake$75millioninpaymentstohospitals

and

community

health

centers

in

FY

2010.

Since

these

healthcare

facilities

had

to

absorb

theunpaidcosts,thecutsdonotreflectsavingsbutrathercostshifting.

Perhapsmostimportantly,accordingtotheMassachusettsTaxpayersFoundation,only

20% of reforms costs actually accrued to the Commonwealth of Massachusetts. The

21Ibid.22CathySchoen,JenniferL.Nicholson,andSheilaD.Rustgi,PayingthePrice:HowHealthInsurance

PremiumsAreEatingupMiddleClassIncomes,TheCommonwealthFund,http://bit.ly/91cTbe,

(August2009):8.23RobertWeisman,2InsurersAgainSeekDoubledigitIncreases:EarlierRejectionsStillUnderAppeal,

BostonGlobe,June3,2010,http://www.boston.com/business/healthcare/articles/2010/06/03/mass_health_insurers_seek_double_digit

_increases_again/(accessedJune11,2011).24MassachusettsTaxpayersFoundation,MassachusettsHealthReform:TheMythofUncontrolledCosts(May2009).http://www.masstaxpayers.org/files/Health%20careNT.pdf(accessedSeptember27,2010).25MichaelF.Cannon,TheBostonGlobeMisleadsReadersAbouttheCostofHealthReformin

Massachusetts,August5,2009,http://www.catoatliberty.org/thebostonglobeknowinglyobscures

factsofmassmiracle/(accessedSeptember30,2010.)


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federal government paid for another 20%.26 The vast majority of new spending on

health care affects private individuals andbusinesses, whose increased spending on

healthcaremakesup60%ofthetotal.27

AccordingtoMichaelCannonandAaronYelowitz,totalnewspendingcametomore

than $1 billion in 2008. Specifically, the state of Massachusetts, the federal

government,andthenewlyinsuredspent$1billionmorein2008thantheywouldhave

without health care reform. The authors call this a conservative estimate, since it

includes only new spendingby the state government, the U.S. government and the

previously uninsured. It does not include new spending on insuranceby previously

insured residents, whose policies were deemed inadequate under health care reforms

new mandates. The policies of the previously insured exceeded the outofpocket

limits, and the services covered under such plans were often too limited to satisfy the

new law. In addition, Cannon and Yelowitz criticize insurance coverage rate claims,

assertingthatgainsincoveragehavebeenoverstatedbynearly50%,whilecostshave

beenunderstatedbyatleastonethirdandlikelymore.

28

InoneoftheearlystudiesonthenewhealthcarelawinMassachusetts,Coganandhis

coauthorsestimatedtheeffectofhealthcarereformonemployersponsoredinsurance

premiumsfrom20062008.29 Controllingforothernationalpremiumtrends,theyfound

that health care reform had increased these premiumsby 6% over the period. This

increasebecomes more striking when we consider that Commonwealth Carebegan to

crowdoutemployersponsoredinsurance,meaningthatthedemandforcoveragehas

actuallyfallen.30

26MassTaxpayersFoundation,MassachusettsHealthCareReform.27MichaelF.Cannon,BustingtheBayState:HidingtheCostofHealthReform,ProvidenceJournal,August9,2009,http://www.projo.com/opinion/contributors/content/CT_cannon9_0809

09_73F9ICH_v9.3f8e6eb.html.(accessedSeptember20,2010).28AaronYelowitzandMichaelF.Cannon,PolicyAnalysis657,CatoInstitute(January20,2010).29Cogan,Hubbard,andKessler,TheEffectofMassachusettsHealthReformonEmployerSponsoredInsurancePremiums.30 Ibid.


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TheBHIEstimatesTo gauge the rise in health care costs attributable to the reform law, BHI compiled

historical data on relevant health care costs, defined as Massachusetts Health and

Human Services (nonMedicaid), Medicaid, Medicare expenditures and Medicare

Advantage plan rates and health insurance premiums in Massachusetts. Using

historicaldata,weestimatedthedatapointvaluesfortheyears2006to2009(or2010if

data is available) to determinebaseline estimates of spending had health care reform

notbeenenacted. Ourstateexpendituredataisavailableinstatefiscalyears,whileour

otherdataavailableincalendaryears. Wethencomparedthebaselineestimatestothe

actualdata to determinewhateffect health carereform had on health care costs. This

methodissimilartothatusedbyotherresearcherstoestimatehealthcarecosts.31

To obtain ourbaseline estimates, we calculated two linear trends of the data, prior to

2006 and 2007, the year health care reform was enacted and the first full year after

enactment. These dates act as our analysis events. In the absence of health carereform,thecostdatashouldapproximatelyfollowitsrecenthistoricalpattern. Thejob

ofcalculatingtheimpactbasedondeviationsfromthetrendiscomplicatedbecauseof

theproblemofdeterminingthetruetrend. Therefore,weusedfourscenariostomake

our estimates. For example, we used 2006 in an attempt to capture any changes that

began asthe healthcare reformlawbecame moreofa certainty over the course of the

year.

To check our results we also conducted the analysis using the trend in national data,

where

available.

This

method

captures

any

trends

in

spending

that

have

affected

the

entireU.S.healthcaremarket,butwerenotcapturedinourtrendanalysisforthestate.

This method provides a secondbenchmark against which to measure Massachusetts

healthcarespending.

Our hypothesis is that if health care reform increased health care costs in the

Commonwealth, then the actual data for 20062009/2010 wouldbe higher than the

trend. Conversely,ifthereformlawreducedthegrowthrateofhealthcarecosts,then

theactualdatawouldbebelowthetrend. Tocalculateourfinalestimates,wetakethe

average of our four estimates. The appendix contains a more detailed explanation of

ourmethodologyanddata.

MedicaidandHealthandHumanServicesTable 1 shows the estimation results using linear trend calculation for HHS spending

and exponential trend for Medicaid spending. The top half of Table 1 contains our

estimatesusingFY2006theyearhealthcarereformlegislationwasenactedasour

31 Cogan, et al.


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event date. In the first five years the reform law lowered spending for Massachusetts

HHSandthestateportionofMedicaidbeforespendingexceededthetrendforFY2009;

leading to total savings of $466 million to the statebudget. While the state HHS and

Medicaidspendingdroppedintheinitialyears,federalMedicaidspendingroseduring

theperiodby$2.315billion.

However, ifweuseFY 2007as our event, health care reform increasedstate HHS and

Medicaidspendingby$513millionandincreasedfederalMedicaidspendingby$1.668

billionforatotalincreaseof$2.181billionovertheperiod. Ourresultsdemonstratethe

importanceofthefederalMedicaidwaiverextensionnegotiatedinFY2008inshielding

the state from incurring the full cost of the health care reform law. The federal

governmentabsorbedbetween$1.668billionand$2.315billioninMedicaidspending.

Table1:EffectofHealthCareReformonHHSandMedicaidSpending($m)

EventDate:FY2006 2006 2007 2008 2009 2010 Total

MassachusettsHHS+Medicaid (265) (180) (7) 174 (189) (466)

FederalGovernmentPortionofMedicaid 338 582 565 700 130 2,315

Total 73 401 558 874 (58) 1,849

EventDate:FY2007 2007 2008 2009 2010 Total

MassachusettsHHS+Medicaid (173) 286 360 40 513

FederalGovernmentPortionofMedicaid 409 530 634 94 1,668

Total 237 815 994 135 2,181

Table 2 shows the results using the growth rate of state government health care and

Medicaid spending in the other states as ourbaseline. The results are consistent withthoseabove. MassachusettsandHHSandMedicaidspendinggrowthdropsbelowthe

growthrateoftheotherstatesinFY2006,FY2007andFY2008,beforemovinghigher

thantheotherstatesinFY2009anddroppingagaininFY2010,whilefederalMedicaid

spending increases rapidly throughout the period. Over the period, Massachusetts

HHSandtotalMedicaidspendingfellbyanaverageof$1.217billion.

Table2:EffectofHealthCareReformonHHS&MedicaidwithNationalGrowthRates($m)

EventDate:2006 2006 2007 2008 2009 2010 Total

MassachusettsHHS+Medicaid (591) (619) (26) 164 (145) (1,217)

FederalGovernmentPortionofMedicaid 187 396 763 995 597 2,938

Total (404) (223) 737 1,158 453 1,721

EventDate:2007 2007 2008 2009 2010 Total

MassachusettsHHS+Medicaid 191 818 1,043 772 2,825

FederalGovernmentPortionofMedicaid 396 763 995 597 2,751

Total 587 1,582 2,038 1,369 5,576


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WhenweuseFY2007asourstartdate,stateHHSandMedicaidspendinggrowrapidly

comparedtothenationaltrend. Thedifferenceinthegrowthrateofspendingbetween

the state and the national average shows Massachusetts spent $2.825billion in more

fromFY2007toFY2010. Onceagain,theMedicaidwaiverplaysanimportantrolein

relievingthestateofhealthcarereforminducedhealthcareexpenditures. Onaverage,

Massachusettsspent$414millionovertheperiodduetothehealthcarereformlaw.

TheEffectoftheMedicaidWaiverThe Massachusetts Comprehensive Annual Financial Report (CAFR) provides a

glimpse of the effect of the FY 2008 Medicaid waiver extension agreement. Table 3

shows the tenyear schedule of HHS and Medicaid expenditures and other financing

uses fromboth the FY 2007 (left portion of the table) and FY 2009 (middle portion)

CAFRreports.32

Thereports

contain

different

entries

under

HHS

and

Medicaid

headings

for

the

fiscal

yearsFY2002throughFY2008. TheFY2007CAFRshowsthedatabeforetheMedicaid

waiver extension was approvedin September of2008,whilethe FY 2009 CAFR shows

the spending after the waiver extension. The FY 2009 CAFR shows smaller amounts

underHHSandlargeramountsunderMedicaidthantheFY2007CAFR. Thechanges

between the amounts under the two headings offset one another almost exactly,

showing the amount of spending that the Medicaid waiver has allowed the state to

reclassifyasMedicaid.

Table3:ReallocationofHHSandMedicaidSpending($m)

Fiscal Prewaiverextension Postwaiverextension Difference

Year HHS Medicaid Total HHS Medicaid Total HHS Medicaid

2002 6,104 5,261 11,365 5,386 5,979 11,365 718 718

2003 5,962 5,542 11,504 5,327 6,177 11,504 635 635

2004 6,832 5,945 12,777 5,868 6,909 12,777 964 964

2005 7,602 6,313 13,915 6,208 7,706 13,914 1,394 1,393

2006 6,797 7,219 14,016 5,865 8,151 14,016 932 932

2007 7,089 7,862 14,951 5,907 9,044 14,951 1,182 1,182

*2008 7,603 8,590 16,193 6,423 9,770 16,193 1,180 1,180

*2009

8,117

9,410

17,527

6,684 10,843

17,527

1,433

1,433

*2010 8,522 9,245 17,767 7,089 10,678 17,767 1,433 1,433

Total 64,628 65,387 130,014 54,757 75,257 130,014 9,871 9,870

*EstimatebasedonFY2008CAFRreportingthat$4.3billioninadditionalMedicaidreimbursementsfor

FY20092011abovetheFY20062008period. Totalsmaynotsumduetorounding.

32ComptrolleroftheCommonwealth, MassachusettsComprehensiveAnnualFinancialReports,(December2009

andJanuary2008):164165,162163;

http://www.mass.gov/?pageID=oscterminal&L=3&L0=Home&L1=Publications+and+Reports&L2=Financial+Reports&

sid=Aosc&b=terminalcontent&f=reports_audits_rpt_cafr&csid=Aosc. (accessedJune2011).


16/32


According to the FY 2008 CAFR report, the Medicaid waiver extension authorizes

federalreimbursementforapproximately$21billioninspendingfromFY2009through

FY 2011, $4.3billion more in spending than was authorized for FY06 through FY08.33

Thereportoutlinestheextensionoffederalreimbursementforallcurrenteligibilityand

reimbursement levels and Commonwealth Cares subsidized coverage up to 300% of

thepovertyrate. Thesefiguresprovidefurtherevidenceofhowthefederalgovernment

continuestopickupthestategovernmentstabforhealthcarereform.

MassachusettsHealthCareInsuranceRatesandExpendituresBHI examined the effect of health care reform on health insurance costs from the

Medical Expenditure Panel Survey conductedby the Agency for Healthcare Research

and Quality at the U.S. Department of Health and Human Services. Table 4 displays

the results for total insurance premium costs forboth single and family plans. By

calendaryear

(CY)

2009,

annual

premiums

for

a

single

plan

exceeded

the

trend

line

by

$217. BetweenCY2006andCY2009thetotalexcesspremiumpaidforasingleperson

was$398. Thedifferenceforafamilyplanisevengreater,exceedingthetrendlineby

$1,074 in CY 2009. The total aggregate increase in premiums paid on a family plan

between CY2006and CY2009was$3,185. Theanalysisusing CY2007astheevent

reducesthetotalpremium increasesbynearlyhalf:to$171forasingleplanand$1,822

for a family plan. On average, the single plan premiums increasedby $284 and the

familyplanpremiumsincreasedby$2,504.

Table4:EffectsofHealthCareReformonAverageHealthInsurancePremiums

EventYear 2006 2007 2008 2009 Total

SinglePlan($peryear)

Eventdate:2006 101.60 60 19 217 398

Eventdate:2007 23 (22) 170 171

FamilyPlan ($peryear)

Eventdate:2006 612 704 796 1,074 3,185

Eventdate:2007 481 545 796 1,822

The increase in the health care premiums led to large increases in aggregate health

insurancecosts

over

the

period.

Table

5

provides

the

results.

We estimate that health care reform drove health care insurance expenditures upby

$4.736 billion to $6.144 billion over the period. This calculation is based on the

assumption that there exists a high correlation between the amount that private

consumerspayforhealthinsurance,andtheactualconsumptionofhealthcare. Thatis,

332009CAFR,1920.


17/32


we are likley to find that private insurance premiums rise or fall, depending on the

actualamountofhealthcarethatratepayersconsume.

TheanalysisutilizingCY2007astheeventyear,healthcarereformincreasedpremiums

by $3.361billion in CY 2009, using the Massachusetts growth trend, or $3.004billion

using the United States growth trend over the period. On average, the health care

reform law drove up health care insurance expendituresby $4.311billion over theperiod.

Table5:EffectsofHealthcareReformonTotalHealthInsuranceCosts

2006 2007 2008 2009 Total

MassachusettsTrend($m)

EventDate:2006 1,292 1,380 1,461 2,011 6,144

EventDate:2007 914 941 1,506 3,361

USGrowthRate($m)

EventDate:2006 420 979 1,530 1,806 4,736

EventDate:2007 544 1,080 1,380 3,004

MedicareExpendituresinMassachusettsAs discussed above, the federal government absorbed a large portion of the state

government expenditures for health care reform through the state Medicaid waiver

program. In order tobetter understand the federal governments liability for health

carereformand,inlightoftheincreasesinMedicaidcostsandprivatehealthinsurance

costs,BHIanalyzedMedicarespending,bothinsuranceplancostsandpersonalhealth

careexpendituresinMassachusetts. Table6displaystheresults.

Table6:EffectsofHealthCareReformonMedicareSpendinginMassachusetts

EventYear 2006 2007 2008 2009 2010 Total

MedicareAdvantageRatePlan($peryear)

Massachusetts

Eventdate:2006 385 521 874 926 647 3,352

Eventdate:2007 328 649 669 359 2,005

RestoftheUnitedStates

Eventdate:2006 237 320 360 71 102 1,090

Eventdate:2007 201 217 (97) (80) 242

Medicarepersonalhealthcareexpenditures($,million)

Massachusetts

Eventdate:2006 668 955 1,281 1,647 2,056 6,606

Eventdate:2007 788 1,099 1,450 1,845 5,186

RestofUnitedStates

Eventdate:2006 52 1,179 1,551 1,969 2,435 7,685

Eventdate:2007 968 1,324 1,726 2,177 6,194


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MedicareAdvantageplansinMassachusettsexhibitahighergrowthrateintheperiod

afterthepassingofhealthcarereformthanthetrendlinepriortoreform.34 InCY2006,

theplan ratesjumpedto$385peryearabovethetrendlineand surgedby$647inCY

2010fortotalincreaseof$3,352overthe period. Whencomparedto theUnitedStates

over the same period ratesjumpedby close to $237 above the trend in the first year,

resulting in an average Medicare Advantage plan costing $1,090 more than if health

carereformhadnotbeenimplementedoverthefiveyearperiod.

We reach similar conclusions using CY 2007 as the event year. Medicare Advantage

planratesarehigher,againsttheUnitedStatesorMassachusettstrendgrowth,by$242

peryearand$2,005respectively. Likewise,Medicarepersonalhealthcareexpenditures

would havebeen much lower had health care reform notbeen implemented. In CY

2010alone,spendingwouldhavebeenbetween$1.845billionand$2.435billionless.On

average,theMedicareAdvantageplansincreasedby$1,672overtheperiod.

34TheKaiserFamilyFoundation,MedicareHealthandPrescriptionDrugTracker,Massachusetts:Entire

MedicareAdvantageProfile,(2009).

http://healthplantracker.kff.org/georesults.jsp?r=26&yo=2&n=1&pt=8(accessedSeptember27,2010).


19/32


Conclusion

Amid celebration and fanfare, the Commonwealth of Massachusetts enacted a long

soughtafter health care reform law in 2006. Advocates promised that the law would

shrink the rolls of the uninsured and reduce health care costs. As a result,

Massachusetts was held up as a model upon which national health care reform

legislation would be based. There is no doubt the federal Patient Protection and

AffordableCareActcloselyresemblesthestateshealthcarereformlaw. Butitislikely

the consequences will be the same: higher costs for both the policyholders and

taxpayers.

The Commonwealth has made strides in increasing health insurance coverage in

Massachusetts. However, the 2006 law has failed to reduce health care costs, an

important goal that was stressed as equally critical to success as universal coverage.

Health care reform has pushed increasesboth above the prereform growth trend inMassachusetts and the growth rate found in the rest of the country. The

Commonwealth hasbeen fortunate. Few of the increased costs identified in this study

havebeen shifted to the Commonwealth primarilybecause the federal government,

through its Medicaid waiver agreement, has absorbed a large portion of the cost

increases.

Private insurance carriers have notbeen able to escape theburden of the increase in

health care costs. While the Commonwealths health care ticket is paidby the federal

government,

privatecompanies

have

no

choice

but

to

pass

the

higher

costs

onto

the

insured.Someofthesecostsfallinthedoubledigitrange,adevelopmentthathascome

under fire from the same state officials who celebrate the laws success. Since it must

respond to competitive demands, the insurance industry does not enjoy the largess of

thefederalgovernmenttocoveritscostincreases. Theproposedsolutionwillmakethe

problems worse. Governor Deval Patrick and others now talk of controlling insurance

rates through regulatory oversight, a dubious policy. Controlling costs will translate

intocappingservicesprovidedbyphysiciansandothercaregivers. Theseare,ineffect,

pricecontrolsthatwilldampentheincentivetoprovideservicesandleadtolongerwait

timesandtherationingofhealthcare.

The ability of the federal government, facing its ownbudgetary problems, to carry

burdens imposed on itby the states, is not unlimited. Furthermore, itsbeneficence to

theCommonwealthwillmostlikelydiminish,ifnotexpire,inthefuture.Policymakers

atalllevelsshouldtakenote.


20/32


Methodology

Weuseasimplelineartrendequationmethod,usingtheTRENDformulainMicrosoft

Excel which returns a value along a linear trend, using the Ordinary Least Squares

(OLS)method

to

calculate

the

trend

for

all

variables

except

for

Medicaid.

According

to

the state Fiscal Year (FY) 2008 Comprehensive Financial Report, $4.3 billion in

additional Health and Human Services (HHS) spending was retroactively reimbursed

under federal Medicaid waiver that supports the reform law.35 This gave the

impression that HHS spending dropped. However, state Medicaid spending spiked

after FY 2004. In order to adjust for this switch, we used an exponential trend line to

bettercapturethissurgeinMedicaidspending. Allofourgraphsreportthecoefficients

of determination (R2) value which measures the fit of the trend line to the data. The

closerto1.00theR2value,thebetterthetrendlinefitstothedata. AllofourR2values

exceed0.82,withmostexceeding0.90,whichmeansourtrendlinecapturesfrom82%to

over 90% of the variation in the data. See individual graphs for their respective R2

values.

We analyzed the trends using two different event years,both 2006 and 2007. When

using event year 2006, the OLS trend calculation uses the years up to and including

2005todeterminethevalues of theindependentvariables. Theactualdatapoints,for

example $551.51 in 1999 for Medicare Advantage plan rates, were used as the

dependent variable to determine a simple regression. We then used this regression

formula to estimate the spending for the years 2006, 2007, 2008, 2009 and 2010. The

differencebetweenourcalculatedvaluesandtheactualvalueswasthecostincrease,ordecrease, of health care reform in Massachusetts. We employed the same mythology

using 2007 as our event year, except data points up to and including 2006 were

included,andwecalculatedonlyfouryearsofspending(explainingwhymanyofthese

resultingtotalsarelower).

InadditiontousingtheMassachusettstrendforourcalculations,weusedthenational

trend,whereavailableandapplicable,tocontrolfornationalpoliciesandpricechanges

thatmighthaveaffectedthecostofhealthcoverage. Toachievethis,wecompiledthe

samedatasetsfortheUnitedStates,andcalculatedthetrendusingboth2006and2007

astheeventyears. WethencalculatedthepercentdifferencebetweentheUnitedStates

trend and the United States actual, and applied that to the Massachusetts actual,

resultingintheMassachusettstrendwithrespecttotheUnitedStates.

35ComptrolleroftheCommonwealth,FiscalYear2008StateComprehensiveAnnualFinancialReport,

(October2008)1920,

http://www.mass.gov/?pageID=oscterminal&L=3&L0=Home&L1=Publications+and+Reports&L2=Financi

al+Reports&sid=Aosc&b=terminalcontent&f=reports_audits_rpt_sbfr&csid=Aoscrts&sid=Aosc&b=termin

alcontent&f=reports_audits_rpt_sbfr&csid=Aosc (accessed June 21, 2011).


21/32


Figures1though5providevisualrepresentationsof thedatasets. Additionally, they

showthelineartrendlineandtherespectivecoefficientofdetermination.


22/32


The Medical Expenditure Panel Survey (MEPS) supplied both the total number of

privatesectoremployeesand thenumberofemployeescoveredbyasingleof family

plan. Wemultipliedthetotalnumberofprivatesectoremployeesbythepercentageof

insured individuals in Massachusetts to approximate number of private sector

employeesbuying insurance inagivenyear.36 TheMEPSalso reports the fractionof

privatesectoremployeeswhoareenrolledineitherfamilyorsingleinsuranceplansby

year. StartinginCY2001theMEPSalsobegancollectingenrollmentdateforemployee

plusoneplans. Aswedonothave theaveragecontribution for these typesofplans,

and thehighestpercentof employeespurchasing thisplan is13%,weused the ratio

betweenthefamilyandsingleplansforourcalculations.

First,wemultipliedthenumberofprivatesectoremployeesbythepercentinsured,and

then

by

the

ratio

of

single

and

family

plans

resulting

in

the

number

of

each

plan

purchasedbyyear. Sinceafamilyplanwilltypicallycovermorethanoneemployeeat

multiple employers,wedivide theamountofpeopleunder family coverageby 72%.

AccordingtotheU.S.BureauoftheCensus,55.74%oftwopersonhouseholdscontain

two workers, while 44.26% contain one worker. Nonworking households were

excluded, since we were calculating the cost of private sector employee health

36TheMedicalExpenditurePanelSurveyconductedbytheAgencyforHealthcareResearchandQuality

attheU.S.DepartmentofHealthandHumanServices,http://www.meps.ahrq.gov/mepsweb/.


23/32


insurance. Toweightthiscorrectly,44.26%coveroneemployee,and55.74%covertwo

employees.Because44.26%/1and55.74%/2sumto72.13%,weinferthat72policiesare

required to cover 100 employees on average. We then multiplied these two numbers

bytheamountabovebaselinethatemployeeswouldhavetocontributetoeithersingle

or family plans. The result was the total annual insurance expense for private sector

employees above thebaseline. The following table supplies thebasic assumptions

includedinourestimationofemployeecontributionschangesduetohealthcarereform

inMassachusetts.

Table7:EffectsofHealthCareReformonthePrivateSectorInsurancePremiums

Variable 2006 2007 2008 2009

Numberofprivatesectoremployees 2,962,089 2,981,838 3,001,586 2,747,843

SingleCoverage(Weighted) 55.20% 56.03% 56.86% 59.47%

FamilyCoverage(Weighted) 44.80% 43.97% 43.14% 40.53%

PercentInsured 90.40% 92.20% 94.75% 97.30%

SinglePlanDifference($perplan) 98.40 101.61 104.82 269.53

FamilyPlanDifference($perplan) 203.60 148.23 92.85 644.98

InsuranceExpense($m) 389.69 335.71 283.43 1,127.49

A normal interval estimate, and the subsequent hypothetical testing for a confidence

interval,cannotbecalculatedforourtimeseriesdatasets. Ineachpopulationn=1,since

eachtimeperiodisindependent,onlyonedatapointisavailable. Sincenootherstates

implementedthesamehealthcarereformasMassachusetts,wemustuseMassachusetts

data,resultinginjustonedatapointforeachyear.

Tables 8 though 13 provide the detail of our data sets. The first two columns in eachtableprovidetheyearandactualdatapointsasfarbackaspossible. Sincehypothesis

testing was unavailable, we used the next three columns to provide a sensitivity

analysis. We assumed an event year of 2006, and calculated the baseline trend

multipliedby95%andthebaselinetrendmultipliedby105%. Thefinalcolumnshows

thedifferencebetweenthecalculatedtrendlineandtheactualdatalevelsforeachyear.

Table 8 shows the detailedbreakdown of state health and human service spending.

When the trend numbers are increased or decreasedby 5%, the magnitude of the

difference

does

change,

but

the

direction

does

not.

This

means

that

even

with

a

5%

errorthetheorythathealthcarereformincreasedHHSspendingholds. Thesameholds

trueforTable9,whichprovidesdetailsonstateMedicaidspending. Again,witha5%

error, the size changesbut the direction of the effect does not. Health care reform

increasedstateMedicaidspendingabovethehistoricalgrowthtrend.


24/32


Table8:StateHHSSpending($m)

Year Actual

Trend

less5% Trend

Trend

plus5%

Difference

fromTrend

1997 4,507.00

1998 5,058.00

1999 5,160.00

2000 5,324.00

2001 5,622.00

2002 6,104.00

2003 5,962.00

2004 6,832.00

2005 6,208.00

2006 5,865.00 6,144.79 6,468.20 6,791.61 (603.20)

2007 5,907.00 6,335.24 6,668.68 7,002.11 (761.68)

2008 6,423.00 6,644.74 6,994.46 7,344.19 (571.46)

2009 6,684.00 6,849.17 7,209.66 7,570.14 (525.66)

2010 7,089.00 7,037.61 7,408.01 7,778.41 (319.01)

Table9:StateMedicaidSpending($m)

Year Actual

Trend

less5% Trend

Trend

plus5%

Difference

fromTrend

1997 3,455.53

1998 3,665.84

1999 3,856.45

2000 4,269.99

2001 4,642.34

2002 5,259.28

2003 5,698.31

2004 5,742.40

2005 6,268.84

2006 7,144.63 6,278.02 6,608.44 6,938.86 536.19

2007 7,840.93 6,628.82 6,977.70 7,326.59 863.23

2008 8,246.34 6,979.62 7,346.97 7,714.32 899.37

2009 8,679.21 7,330.42 7,716.23 8,102.05 962.98

Table 10 details Medicare Advantage plan rates. For 2006, a 5% increase in the trend

does change the direction of the sign, making the trend $5 million, or 0.006% higher

than the actual. Thus, a 5% increase in the trend changes the cost increase into cost

savingsfor2006. Therestoftheresultsholdfora5%increaseinthetrends.


25/32


Table10:MedicareAdvantagePlanRate($perMonth)

Year Actual

Trend

less5% Trend

Trend

plus5%

Difference

fromTrend

1999 551.51 2000 569.90

2001 592.62

2002 606.41

2003 617.85

2004 687.50

2005 737.72

2006 772.42 703.35 740.37 777.39 32.05

2007 813.02 731.14 769.62 808.10 43.40

2008 871.69 758.93 798.87 838.82 72.82

2009 905.23 786.72 828.12 869.53 77.112010 911.29 814.51 857.38 900.24 53.91

Tables 11, 12 and 13 detail Medicare personal health expenditures and average

premiumsforsingleandfamilyplanrespectively,andfollowthissamepattern. A5%

changeinthetrendconfirmsthathealthcarereformincreasedcosts.

Table12showsthatwhenweincreasethetrendfortheaveragesingleplanpremiumby

5%thesigntochangesandhealthcarereformwouldshowtoreducecosts. Therefore,

the results would not hold if our trend calculation were 5%below the true trend forthese variables. Nevertheless, all the other trend estimates hold against a 5% trend

increase, giving us confidence that our results withstand changes to our trend

calculations.


26/32


Table11:MedicarePersonalHealthCareExpenditures($m)

Year Actual

Trend

less5% Trend

Trend

plus5%

Difference

fromTrend

1991 3,485.00

1992 3,982.00

1993 4,505.00 1994 4,932.00

1995 5,463.00

1996 5,892.00

1997 6,024.00

1998 5,798.00

1999 5,830.00

2000 6,010.00

2001 6,526.00

2002 6,904.00

2003

7,285.00

2004 7,913.00

2005 8,300.74

2006 8,707.47 7,861.42 8,275.18 8,688.94 432.30

2007 9,134.14 8,140.70 8,569.16 8,997.62 564.98

2008 9,581.71 8,419.99 8,863.14 9,306.30 718.57

2009 10,051.22 8,699.27 9,157.13 9,614.98 894.09

Table12:InsuranceCosts,AverageSinglePlanPremium($perYear)

Year RateTrend

less5% TrendTrend

plus5%Differencefrom

Trend

1996 2,329.00

1997 2,237.00

1998 2,392.00

1999 2,539.00

2000 2,719.00

2001 3,086.00

2002 3,353.00

2003 3,496.00

2004

4,141.00

2005 4,235.00

2006 4,448.00 4,129.08 4,346.40 4,563.72 101.60

2007 4,642.00 4,352.54 4,581.62 4,810.70 60.38

2008 4,836.00 4,575.99 4,816.84 5,057.68 19.16

2009 5,268.00 4,799.45 5,052.05 5,304.66 215.95


27/32


Table13:InsuranceCosts,AverageFamilyPlanPremium($perYear)

Year Rate

Trend

less5% Trend

Trend

plus5%

Difference

fromTrend

1996 6,002.00

1997 5,794.00

1998 6,139.00 1999 6,547.00

2000 7,341.00

2001 8,176.00

2002 8,779.00

2003 9,867.00

2004 10,559.00

2005 11,435.00

2006 12,290.00 11,094.10 11,678.00 12,261.90 612.00

2007 13,039.00 11,718.35 12,335.11 12,951.86 703.89

2008 13,788.00 12,342.61 12,992.22 13,641.83 795.782009 14,723.00 12,966.86 13,649.33 14,331.79 1,073.67


28/32


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AbouttheAuthors

DavidG.Tuerck,PhD,isExecutiveDirectoroftheBeaconHillInstituteforPublic

PolicyResearchatSuffolkUniversitywherehealsoservesasChairmanandProfessor

ofEconomics.

He

holds

a

Ph.D.

in

economics

from

the

University

of

Virginia

and

has

writtenextensivelyonissuesoftaxationandpubliceconomics.

PaulBachman,MSEP,isDirectorofResearchatBHI.HemanagestheInstitutes

researchprojects,includingitsSTAMPmodelandotherprojects. Hehaspublished

studiesonstateandnationaltaxpolicyandonstatelaborpolicy.Healsoproducesthe

institutesstaterevenueforecastsfortheMassachusettslegislature.HeholdsaMaster

ofScienceinInternationalEconomicsfromSuffolkUniversity.

Michael Head, MSEP, is an Economist at the BHI. He holds a Master of Science in

EconomicPolicyfromSuffolkUniversity.

TheauthorswouldliketothankFrankConte,DirectorofCommunicationsattheBeaconHillInstitute,forhiseditorialassistance.


32/32

TheBeaconHillInstituteatSuffolkUniversityinBostonfocusesonfederal,stateandlocaleconomic

policiesastheyaffectcitizensandbusinesses.Theinstituteconductsresearchandeducational

programstoprovidetimely,conciseandreadableanalysesthathelpvoters,policymakersandopinion

leadersunderstandtodaysleadingpublicpolicyissues.

June2011bytheBeaconHillInstituteatSuffolkUniversity

THEBEACONHILLINSTITUTE

FORPUBLICPOLICYRESEARCH

SuffolkUniversity8AshburtonPlace

Boston,MA02108

Phone:6175738750Fax:6179944279

[email protected]

http://www.beaconhill.org

romney care policy study

Documents