To people that actually live in Massachusetts, one of the more hilarious statistics-based claims floating around the blogosphere the week of December 20 is the meme that Massachusetts healthcare premiums dropped 40% after the start of Romneycare. It looks like the claim started with David Leonhardt of the NY Times on December 14 and it is interesting to see how the liberal-blogger lemmings who followed all marched over the cliff behind him while changing the facts like people playing the pass-the-orange game (more to come in a future post).
But first to set the record straight (as if anyone who lived in Massachusetts needed to be reminded), premiums did not drop 40% after Romneycare. Here is the closest thing to some "official" up-to-date data on the subject of the trend line for healthcare insurance premiums in Massachusetts post passage of Romneycare. Unlike the NY Times data which is two to four years old, this data is from the August 2010 quarterly Key Indicators report from the Massachusetts DHCFP - Department of Healthcare Finance and Policy, page 22. Premiums for typical policies -- according to the state -- went up 40% since January 2008, not down 40%. The rise was just about the same even going back to January 2007, at the beginning of Romneycare (to see that data, access the August 2008 Key Indicators report from the linked website). In other words, premiums in general were up only slightly the first year of Romneycare, certainly not down 40%, and then began a steady increase.
To give the NY TImes some credit, even though the data is old Leonhardt does explain that he is only talking about those who used to buy insurance individually in Massachusetts, which was about 40,000 people out of 6,500,000 at the time Romneycare began. But Froma Harrop of the Providence Journal and other left-wing bloggers did not pick up on that subtlety and expanded the claim to include everyone in Massachusetts. And none of the bloggers seems to acknowledge that individuals in Massachusetts now buy healthcare insurance at the small group rate. Almost 800,000 people are in the small group market including the 40,000 added when the two markets were combined.
But this DHCFP data is useful only to the extent that it shows premiums for some middle-of-the-road classic healthcare insurance policies sold through the state to individuals and small groups acting as a broker for BC/BS, Centene, Fallon, Harvard and maybe Tufts. But there are hundreds of options in Mass and individuals or small groups might be getting a better deal through other means. The variations are almost endless especially because of ratings for age and geography in Massachusetts. And of course this does not apply to large group private purchases of insurance. The DHCFP data probably applies to the 150,000-plus people that get their insurance via the Commonwealth Care program however. There is no one statistic you can point to truly illustrate what is happening to premiums in Massachusetts. What you can do is look at reports from the Commonwealth Fund, Kaiser and other left-leaning research houses that say premiums in general on the average rose by varying different percentages. Similarly the Boston Globe runs a story about the "evil insurers" raising rates almost weekly. Many self-employed people – including me -- are anecdotally reporting that their premiums doubled during this time period. [Why do you think Deval Patrick and the Democrat-controlled Massachusetts state legislature twice froze individuals out of buying (or insurers out of selling is the way he would put it) insurance during 2010?] Overall, no one but the NY Times and its fellow travelers -- not even the bureaucrats in the Massachusetts statehouse that hope reform is a major success -- claim that premiums went down. But the false claim that they went down 40% is multiplying out on the Internet so there are apparently some who hope wishing will make it so. As your father taught you, don't believe what you read in the newspapers. -- Dennis Byron