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Massachusetts health care — wonky, with a healthy dose of reality

MA Health Reform as National Model? Not in California

MA Health Reform as National Model? Not in California

April 27, 2006

The California Health Care Foundation just released a report estimating a $9.4 billion cost to implement the MA health reform model in the Golden State, $1450 per uninsured resident. Not likely to be a winning formula. Click here for the study and here's the summary:

In April 2006, Massachusetts became the first state to require all residents to obtain insurance. The plan has drawn national attention and sparked debate about whether a similar approach could work in California, which has 6.5 million uninsured residents—nearly 12 times the number in Massachusetts.

Massachusetts-Style Coverage Expansion: What Would it Cost in California? explores the costs of a similar approach in California. The analysis, by the Institute for Health Policy Solutions, finds that because of economic and insurance coverage differences between the two states, providing Massachusetts-style health insurance coverage in California would require as much as $9.4 billion in additional funding—or $1,450 per uninsured Californian.

Spending on premiums and out-of-pocket expenses for Californians under age 65 would rise 9.9 percent per year to just over $117 billion. Contributions from employers would increase 8.8 percent per year to $63.8 billion, assuming no changes in employers’ contribution policies. The rise in employer spending is due to a projected increase in enrollment by workers and their dependents who previously declined employer coverage.

The study notes several key differences between the two states. For example, the percentage of the population without health insurance in California is 20.7 percent, which is much higher than the 13.1 percent in Massachusetts.