Minnesota Gets Massachusetts' Healthcare Exchange Facts All Wrong

A Minnesotan journalist has waded deep into one of the state's rumored 10,000 lakes by writing a piece on the Massachusetts healthcare insurance exchange (and exchanges in general).  At the point the article begins talking about Massachusetts, the journalist claims:

“Massachusetts, a state with one of the nation's highest premium costs, opened its exchange in 2006. In its first three years, the rate of uninsured dropped from more than 10 percent to 4.4 percent, the lowest in the nation, where it has remained.”

It’s hard to believe the reporter could pack so much misinformation into one sentence:

First, the healthcare-insurance exchange in Massachusetts has basically nothing to do with our state's high healthcare insurance premium costs one way or the other¹. And despite one of the article's later sentences, there was never any intention or hope that the exchange would lower actual healthcare – as opposed to healthcare insurance -- costs.

Second, the percentages of uninsured quoted are suspect but more important – as the article admits by saying "in its first three years" – these statistics are three years out of date. We in Massachusetts actually don’t know much about how any of the 2006 reforms are working today because the Deval-Patrick administration that runs Massachusetts stopped putting out statistics on years after 2009-2010. The reason, apparently, was because the results were so overwhelmingly negative concerning the first three years. (We assume the statistics continue to be negative or the Democrats would be bragging about them.  And the Democrats have had to pass five revisions to the initial 2006 law so apparently the reform is not working the way they want.) 

The exchange affects only about 3% of Massachusetts’ 6,500,000 residents; most of that 3% get free or effectively free Medicaid Lite policies. This small group signs up for the Medicaid Lite policies through the exchange bureaucracy after a whole separate Massachusetts’ Medicaid bureaucracy says they are ineligible for Medicaid; most exchange users don’t even get near the exchange until Medicaid says they can... after an extensive bureaucratic background check lasting months.

Most of the newly insured in Massachusetts got insured not because of the exchange but because they qualified for Medicaid and always qualified Medicaid and simply did not sign up before. This larger group on Medicaid does not use the exchange (There is some indication that all of newly insured are letting both their free Medicaid and their free exchange-based Medicaid-Lite insurance lapse but we cannot be sure because -- as noted above -- the state has not released the relevant statistics in the last 2-3 years.)

¹ There is one small exception to my statement: the small number of full-price policies bought through the Massachusetts healthcare-insurance exchange are more expensive than buying the same policy direct from the insurer or through a broker because of the state’s inefficient operation of the exchange. But that is not a big deal because less than one half of one percent of the state’s residents use the exchange to buy insurance.