Cost of Massachusetts Health Insurance Mandate to Rise 85% -- $400 Mil -- in '09; CA Mandate Proposal Certain to Face Similar Increases |
Also, Big Pharma Gives $400K to Prop 93, Drops Opposition to
Schwarzenegger/Nunez Health Bill After Plan Change
SANTA MONICA, Calif., Jan. 24 /PRNewswire-USNewswire/ -- A projected
85% increase in the cost of Massachusetts' mandatory health insurance law
by 2009 should send up red flags that a similar California plan is also
insufficiently funded, said the Foundation for Taxpayer and Consumer Rights
(FTCR). Massachusetts costs will increase by approximately $400 million
primarily because the state underestimated the number of new enrollees in
state-subsidized insurance plans, the Boston Globe reported today.
California mandatory purchase legislation eliminated another opponent,
the pharmaceutical industry, prior to a committee hearing in the state
Senate yesterday. The companies dropped their opposition in response to an
amendment that drastically weakens the bill's original mechanism for
reducing drug costs, according to FTCR. At the same time, the drug
companies' lobbying arm contributed $400,000 to Proposition 93 on Tuesday,
the ballot initiative that would extend the terms of Senate pro Tem Don
Perata and Assembly Speaker Fabian Nunez. The companies' new concern is
being cut out of the benefit package, necessary according to the
Legislative Analyst to hold down costs.
"Drug companies got the language they didn't like out of the healthcare
bill and thanked the Speaker with $400,000 towards his term limits
extension initiative," said Jerry Flanagan of FTCR. "This is more evidence
that the healthcare bill is more about protecting politicians' power than
California patients."
California's Legislative Analyst issued a warning that cost estimates
in California are inadequate in testimony to the Senate committee,
suggesting that proponents' estimate of the number of uninsured is too low.
She also projected a $4 billion deficit in health plan financing in just
five years if insurance premiums are just $50 a month more expensive than
the Speaker and Governor's projections. FTCR called that a likely scenario
given that nothing in the bill adequately limits premium increases by
insurers and, as the Legislative Analyst contends, Speaker Nunez's cost
projections are likely too low.
"The Speaker's mandatory health insurance scheme has no provision for
inevitable increases in premium costs, and he has purposely low-balled the
number of uninsured to make the numbers add up. The funding's just not
there. When state financing fails, more of the cost burden will be borne by
California families," said Carmen Balber with FTCR. "Massachusetts'
mistakes should be informing the California debate, instead proponents are
trying to sweep them under the rug."
Cost increases in Massachusetts are relevant to California, said FTCR,
because they stem not from the plan's funding source (which differs between
the states) but on assumptions about the health insurance market and the
uninsured. Both states underestimated the number of uninsured when
projecting costs, and the double-digit increases in the cost of health
coverage that are projected in Massachusetts are another probability not
considered by proponents of the California plan.
SOURCE Foundation for Taxpayer and Consumer Rights
back to topRelated links:
CONTACT:
Carmen Balber, +1-310-392-0522 ext. 324, or
Jerry Flanagan, +1-310-392-0522 ext. 319, both of the Foundation
for Taxpayer and Consumer Rights
