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Health Reform: The Honeymoon is Over

|Includes: AET, ANTM, UnitedHealth Group Inc. (UNH)
All you have to do is look at Massachusetts to realize that we just may be screwed. In 2006, Mitt Romney touted a state-wide health reform plan to residents of the seventh smallest state in the nation. That plan is now law and espouses many of the mandates and legislations that can be found in the federal version of health reform that was signed into law just a few months ago: strict regulation of health insurance premiums, mandates on individuals and businesses, taxpayer-funded subsidies, and major Medicaid expansion. The primary selling point of the Massachusetts plan, like the federal one, was that it would bring down healthcare costs. Unfortunately, according to an article out of Kaiser, that isn’t exactly working out as planned. Health insurance for a family of 4 in Massachusetts now costs about $14,700 compared to a national average around $13,000; and insurance costs in the state have grown 14% faster than the national average between 2006 and 2008. One theory, in particular, seems not to be working out. Romney’s camp assumed that more people having insurance would lead to fewer emergency room visits at hospitals – if people can visit primary care doctors they should remain healthier, catch problems before they become emergencies. However, the opposite has occurred. Emergency room visits are up. Primary care doctors are simply shutting their doors to new patients. Whereas 70% of docs were accepting new patients in 2007, only 44% are accepting new patients now. Health reform may be a good idea in theory, but the most obvious test case does not seem to be confirming initial hypotheses. 

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