By Shantee Woodards
Maryland Gazette
February 10, 2010
Health care reforms in Maryland need only minor adjustments to be as effective as an insurance “exchange” established in Massachusetts, according to a new report that compared both states.
The report, released Wednesday in Annapolis by two insurance trade associations, found that Maryland’s current system of distributing insurance to small employers and individuals is adequate and takes the place of the so-called health insurance exchange offered in Massachusetts.
In Maryland, there’s an environment “where brokers can buy health insurance and it’s sold to individuals and it looks like our ‘Connector,’ ” said Jonathan Gruber, an author of the report and professor of economics at the Massachusetts Institute of Technology.
And…
A Health Insurance Exchange for Maryland?
Comparing Massachusetts and Maryland
By Robert L. Carey and Jonathan M. Gruber, PhD.
Maryland Association of Health Underwriters
National Association of Insurance and Financial Advisors of Maryland
The success of the reform generally, and the Connector specifically, in Massachusetts has motivated similar approaches both at the Federal level and in other states. Virtually every current proposal for reform at the state and Federal level includes some form of “exchange” that would organize and sell health insurance in the non-group and small group markets. The popularity of this approach raises the important question of whether the Massachusetts model can be replicated – and how much government involvement is required to make that a reality. The answer will clearly vary from place to place, and with the details of the proposed exchange.
In this report, we evaluate the possibility of setting up an exchange in Maryland. We begin with a detailed description of the non-group and small group markets in Massachusetts before health reform. We then discuss health reform in that state, discussing both the establishment of the Connector and its early role in health reform. We next turn to an evaluation of the non-group and small group markets in Maryland, and in particular the much more significant role played by intermediaries in that state. In many senses, intermediaries in Maryland play a role much like the Connector plays in Massachusetts. This makes the transition to an exchange much less onerous in Maryland.
http://www.marylandahu.com/broker_images/marylandahuorg/documents//mahu_exchange_study.pdf
Comment:
By Don McCanne, MD
Many experts touting the Congressional reform proposals have singled out the insurance exchange concept as being one of the most important avenues of reforming the private health insurance market. MIT Professor Jonathan Gruber was involved in designing the Massachusetts exchange and has been an independent-expert-on-the-dole for the administration and Congress as they move forward with the concept of private insurance exchanges.
In this report, commissioned by the insurance intermediaries that would be threatened by an insurance exchange, Robert Carey and Jonathan Gruber conveniently show that Maryland’s brokers are already providing the function of an exchange, so the transition to an exchange would be “much less onerous.” They seem to suggest that we could retain this middleman industry to fulfill the function of the exchange.
They are careful to say that they addressed this one issue only, and did not address the many other issues involved in reform. That’s important since Maryland’s private quasi-exchange has left 800,000 uninsured – over 14 percent of their population. Also Maryland citizens are facing the same outrageous increases in insurance premiums that citizens of other states face. Exchanges alone will not solve these problems.
The Gruber/Obama/Baucus approach to reform has been to take a group of individual policy proposals, such as the exchange, and patch them together in a comprehensive reform package. Each policy concept used has significant deficiencies. When you patch them all together, you still end up with a system that will leave tens of millions without insurance, with inadequate measures to stem health care inflation, with an expansion of underinsurance products, and with increasing financial hardship for America’s workforce and their families.
Private insurers are providing us with expensive, intrusive, and largely worthless services that take away our choices in health care. What good will it do to line them up in a private insurance exchange that adds only the imprimatur of the federal or state governments?
Using the most expensive and dysfunctional model of reform to build on the most expensive and dysfunctional health care system of all industrialized nations makes no sense whatsoever, especially when the goals of universality, comprehensiveness and affordability have been so mercilessly compromised.
The least expensive and most effective model would be to improve Medicare and include everyone. But Gruber’s microsimulation model is designed to assess private insurance solutions. It does not work for a single payer Medicare model.
Isn’t it time that we told Gruber to pick up his model and take a hike? Let’s bring in Steffie Woolhandler and David Himmelstein and take a closer look at their model. Of course the sponsors of this new report by Gruber and Carey would cringe at that prospect.