Scandal Sheet

Obamacare and Romneycare

This article originally appeared on heartland.org.

Following on the heels of the failure of the Obamacare exchange in Oregon,Massachusetts has announced its “first exchange in the nation” is also going under.

Bay State officials are taking steps this week to junk central parts of their dysfunctional health insurance exchange – the model for President Barack Obama’s health care law – and merge with the federal enrollment site HealthCare.gov.

The decision is part of an expensive plan that would occur alongside a parallel, last-ditch attempt to build a working state system.

The state on Monday announced the hiring of hCentive, a Virginia-based contractor that helped construct the Kentucky and Colorado exchanges. The company would rush to build a viable state exchange in time for the next enrollment season, which begins November 15.

Officials aren’t sure it’s possible to make that happen in less than six months. Given the narrow timeframe, they intend to simultaneously start shifting the Massachusetts exchange, known as the Connector, to HealthCare.gov.

A move by Massachusetts to the federal exchange would represent a symbolic blow for local Obamacare supporters. Massachusetts built the model of a state-run exchange in 2006, a result of the health care reform effort by then-Gov. Mitt Romney. The RomneyCare exchange, which helped the state provide health coverage to more than 97 percent of residents, became the template for the Obamacare version.

Massachusetts is the second state to begin that transition. Late last month, Oregon opted to scrap its $200 million system and join the federal exchange.

How bad has the Massachusetts version of Obamacare been?

The strategy announced Monday will still cost an estimated $100 million, and it creates many uncertainties, especially for insurance companies and consumers. Some customers might eventually need to change insurance plans.

As late as March, the state had considered rebuilding the balky Health Connector site, which has left thousands of consumers frustrated and many without coverage for months. But Sarah Iselin, the insurance executive whom Governor Deval Patrick tapped to oversee repairs to the site, said that approach turned out to be far too risky …

Massachusetts had the first online health insurance marketplace in the country, created under its landmark 2006 law mandating coverage for most residents. The website worked well until it was revamped last year to meet the demands of the federal Affordable Care Act.

The new website was supposed to tell consumers whether they qualified for a subsidized plan, calculate the cost of coverage, and enable them to compare plans and enroll. It has not worked properly since it was launched in October, leading the state to encourage people to fill out paper applications instead. The flaws forced the state to enroll tens of thousands of residents in temporary insurance plans through the state Medicaid program.

Clearly, Romneycare’s implementation went much more smoothly than Obamacare’s. But what about the larger question of how much Romneycare actually helped people in the intervening period? Michael Cannon responds to a new study on this point:

Two of the most controversial questions in health care reform are whether government-sponsored expansions of health insurance coverage like ObamaCare and RomneyCare save lives, and if so whether other policies could save more lives per dollar spent. “Changes in Mortality After Massachusetts Health Care Reform,” published today in the Annals of Internal Medicine, presents evidence suggesting RomneyCare may have saved lives, but at a very high cost.

Conducted by Benjamin Sommers (Harvard University), Sharon Long (Urban Institute), and Kate Baicker (Harvard University), this study compares Massachusetts counties to similar counties in the United States before and after the enactment of RomneyCare in 2006. Consistent with similar studies, the authors found that when RomneyCare expanded health insurance coverage, consumption of medical services increased. They also find that relative to the rest of the country, mortality among adults age 20–64 in Massachusetts dropped by 2.9 percent, while mortality from causes treatable by medical care fell by 4.5 percent. The below chart shows how mortality rates in Massachusetts diverged slightly from the control group starting in 2006 …

The World Health Organization considers a medical intervention to be “not cost-effective” if it costs more than three times a nation’s per-capita GDP per year of life saved. This in turn suggests that RomneyCare would have to give every person it saves an average of nearly 30 additional years of life to meet the World Health Organization’s criteria for cost-effectiveness. Given that the mortality gains were concentrated in the 35–64 group, that seems like a stretch.

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