the effects of ‘Romneycare’ in Massachusetts

Two US-based economists ran the numbers and found large, positive effects for near-universal healthcare on the self-assessed health of individuals in Massachusetts. Their findings are of interest, not least because ‘Obamacare’ – the federal health care reform legislation – was patterned after the reforms that presidential candidate Mitt Romney introduced in Massachusetts when he was Governor.

In 2006, Massachusetts passed health care reform legislation designed to achieve nearly universal coverage through a combination of insurance market reforms, mandates, and subsidies that later served as the model for national health care reform. Using individual-level data from the Behavioral Risk Factor Surveillance System, we provide evidence that health care reform in Massachusetts led to better overall self-assessed health. An assortment of robustness checks and placebo tests support a causal interpretation of the results. We also document improvements in several determinants of overall health, including physical health, mental health, functional limitations, joint disorders, body mass index, and moderate physical activity. The health effects were strongest among women, minorities, near-elderly adults, and those with incomes low enough to qualify for the law’s subsidies. Finally, we use the reform to instrument for health insurance and estimate a sizeable impact of coverage on health. The effects on coverage were strongest for men, non-black minorities, young adults, and those who qualified for the subsidies, while the effects of coverage were strongest for women, blacks, the near-elderly, and middle-to-upper income individuals.

Charles J. Courtemanche and Daniela Zapata, “Does Universal Coverage Improve Health? The Massachusetts Experience“, NBER Working Paper 17893 (March 2012).

An ungated, earlier version of this paper can be downloaded here.

One Response to “the effects of ‘Romneycare’ in Massachusetts”

  1. Dennis Byron says:

    Dennis: Thank you for this comment. I removed the entire paragraph, which is not central at all to the study. Some day I hope to see a good study of Medicare coverage in the US, and the effects of deductibles and co-pays. Medicare in Canada (at least in the province of Ontario) has no deductibles and no co-pays. – Larry Willmore

    Your blog entry about Massachusetts health care reform contains the following statement:

    ” Not all seniors are eligible for free Medicare Part A, only those who have paid Medicare [payroll] taxes for at least ten years (or whose spouse has done so). …. Moreover, Part A only covers hospitalization – not physician services or prescription drugs – and has an $800 deductible plus co-payments after 60 hospital days. Filling these gaps in coverage requires the purchase of Medigap, Medicare Part B/Medicare Advantage, and Medicare Part D plans.”

    I cannot find in your blog post how this is relevant to Massachusetts health care reform but I write because it is incorrect and misleading and potentially injurious to senior citizens like myself.

    It is incorrect because the Part A deductible is $1156, not $800.

    It is misleading in a couple of ways:
    – although it is correct to say “Not all seniors are eligible for free Medicare Part A, only those who have paid Medicare [payroll] taxes for at least ten years (or whose spouse has done so). ….” the vast majority of seniors are in the second group. In Massachusetts at least the rare exceptions tend to be older retired government employees who have their own government-funded pension/retiree-health plans or very rich people who lived off investment income their whole lives (and therefore did not pay SS taxes). Also — and this is most important — A covers only hospitlization where the patient has been admitted. If in for observation or outpatient reasons, B is the relevant Medicare plan
    – perhaps you come from outside the U.S. (or more likely are not of Medicare age) but no one in any way involved with Medicare would say “Filling these gaps in coverage requires the purchase of Medigap, Medicare Part B/Medicare Advantage, and Medicare Part D plans.” You or the authors from whom you have copied this sentence have it completely backwards:
    1. Almost everyone who has A has B. The only reason not to have B (you actually do not choose to buy B; you have to opt out of it) is again becasue your government or private retirement plan already covers doctors visits and outpatient and observation hospital visits, or you are Medicare age but not yet retired. Part B costs $100 a month, covering 25% of the total government outlay per the original Medicare law (B is not some kind of private market afterthought).
    2. Fewer people have Part D drug coverage because again some retiree plans cover drugs or because they do not take drugs (this second reason could be a financial mistake however because there is a penalty for waiting to sign up until you need it)
    3. Medicare Advantage is Medicare Part C and is the second most popular way to fill the gaps in A and B, which also often adds drug coverage, annual physicals, vision, dental and other benefits such as discounts on over the counter medical needs found no where else in Medicare
    4. Medigap is the least popular choice as a means to fill a gap, not the first as in your list. It does not include drug coverage, annual physicals, vision, dental and other benefits and is expensive. Most people go to Medigap only if they do not have retiree insurance, do not have a good Medicare Part C choice in their county, or do not qualify for low income assistance to make up for the shortfalls of A and B Medicare (often the low-income assistance is to help the senior buy a Medigap policy)
    5. Over 90% of seniors in Massachusetts fall in to 2-4 above. Very few choose only A and B

    Again I have no idea what your point is in including this snippet from the larger report (or what you left out) but it could be incredibly injurious to any senior who stumbles over this blog entry. Since it does not relate to your larger point about Massachusetts health insurance reform I would suggest deleting it.