Tuesday, July 1, 2008

Massachusetts Plan Facing Problems

USA Today latest to report on the issue

With the news coverage over the first anniversary of the Massachusetts Plan, the fact that cost overruns are a huge problem for it is receiving a lot of play. USA Today is the latest newspaper to focus on this issue:

Most of the newly insured are lower income residents who qualify for low- or no-cost coverage through the state and there were more uninsured than the state anticipated. Both factors pushed costs to $625 million the first year, up from estimates of $472 million, according to figures from the state agency overseeing the program.

States like Ohio continue to look to Massachusetts as a model of success. Since most of the newly-insured are those who have signed up for either government care or subsidized insurance, I'm not sure why this is noteworthy. It's pretty much Econ 101 that if you offer people something that is either free or subsidized, a large number will take it. It seems to me the only lesson of this plan is that the taxpayers of those states looking to imitate Massachusetts had better watch their wallets.