Dumb and Dumber
There's lots of bad ideas floating around on how to lower health care costs. While we're focusing on real, fundamental reforms of the payment and delivery systems, as part of the Massachusetts Campaign For Better Care (see our spiffy new logo, at www.hcfama.org/bettercare) others are grasping for gimmicks.
Senate Candidate Scott Brown has focused on mandated benefits, which contribute little to health care cost growth.
For some small business groups, the answer is "association health plans." The hope is that if small businesses can ban together, they will be able to obtain better prices from insurers. This idea has been repeated rejected by the legislature, which understands that for an association to get better rates, it would have to limit its membership to only those who are healthier than average. The result would be higher rates for everyone else, and a disrupted market. Insurance works if the risk pools are large and heterogeneous, not stratified into segments.
The latest incarnation of this idea is to form small business "cooperatives," which is a new name for basically the same plan. The Division of Insurance has been looking into the idea, as part of its investigation into the small business health insurance market.
In December, HCFA joined a broad group of organizations to provide in-depth information and analysis to DOI, opposing the co-op plan. The signers ranged from Nancy Turnbull, Associate Dean at the Harvard School of Public Health and the consumer representative on the Connector Board, to the Association of Health Plans and Blue Cross Blue Shield. Last week the group sent a follow-up letter, responding to some of the points made by proponents.
The groups signing the letter don't always agree on health insurance issues. However, on this issue we are allies because the result of permitting cooperatives would inevitably be a significant disruption in the market and increased premium rates for the majority of small employers and individuals. The creation of one or more cooperatives would undermine important insurance reforms implemented by the Legislature over the last two decades to guarantee availability and renewability of health coverage and the creation of broad and stable insurance rating pools.
We need to address the underlying factors that cause rising health care costs- this includes comprehensive delivery system reform- and focus on sustainable cost containment for all Massachusetts residents.
- Georgia Maheras and Brian Rosman