A state report says Bay State premiums rose 9.7 percent between 2009 and 2011, while the value of that coverage shrank 5.1 percent.“What we’ve seen over the last couple of years is that premiums are growing faster than inflation and at the same time, the quality of the benefit is declining,” said Aron Boros, whose state agency, the Center for Health Information and Analysis, published the report. “So you’re not only paying more, you’re getting less.”
A leading driver of this disturbing trend is consumer preference for expensive hospitals over local clinics or basic care facilities. And this, in turn, can be traced to perhaps the central distortion of our system: the lack of price signals. When consumers aren’t confronted with the real cost of their care—whether because insurance obscures it, or for other reasons—they won’t balk at high price tags, and the system will continue to get more and more expensive. They’ll visit expensive hospitals unnecessarily, simply because they don’t have any financial reason to consume services more responsibly.In other words, Romneycare isn’t causing the increasing cost-quality mismatch; it’s simply letting that mismatch fester by not addressing the core problems bankrupting our health care system. As for Obamacare, while some of its provisions will increase costs directly by expanding access and defining essential benefits, the bigger problem is that the law doesn’t even try to address the real areas that need reform.