Research & Commentary: Lessons from Massachusetts and Utah Insurance Exchanges

Published October 31, 2011

As states await a U.S. Supreme Court decision on the constitutionality of the Patient Protection and Affordable Care Act’s (PPACA) individual mandate, most are debating whether to craft a state health insurance exchange.

Only two states, Massachusetts and Utah, currently have functioning exchanges. Utah claims its exchange is a “free market” model, and PPACA supporters have said exchanges under the law will be similar to it. That’s not correct. Utah’s exchange did not use federal funding for implementation, and it does not channel federal tax credits. Under PPACA, state exchanges created using the Utah model would not be approved.

PPACA was modeled on the Massachusetts health care law; therefore, approved exchanges will likely have to follow that model, the Massachusetts Commonwealth Connector. The new state exchanges will likely face the same poor outcomes. Health insurance for a family of four in Massachusetts costs 33 percent more than the national average, with premiums increasing at nearly double the national average, according to Heartland Institute Senior Fellow Peter Ferrara. Costs increased by 42 percent in less than three years under the Connector.

Employers in Massachusetts have experienced a $500 million increase in health insurance costs, with further increases expected. This happened even though the federal government heavily subsidized the system with $21.2 billion in the first three years. The Commonwealth Connector also has subjected patients to long waiting periods and rationing of care.

The following documents offer additional information on the Massachusetts Commonwealth Connector.

The Obamacare Disaster
Heartland Institute Senior Fellow Peter Ferrara documents the numerous flaws of the Patient Protection and Affordable Care Act (PPACA).

State Insurance Exchanges: The Case Against Implementation
Health Care News Managing Editor and Heartland Institute Research Fellow Benjamin Domenech provides several reasons states should avoid implementing a health insurance exchange.

Research & Commentary: Exchange Regulation and State Implementation–commentary-exchange-regulation-and-state-implementation
Domenech outlines the exchange regulations distributed by the Department of Health and Human Services and discusses the risks for states in implementing exchanges.

The Costly Insurance Exchange
Heartland Institute Senior Fellow Greg Scandlen documents the costly effects of the Massachusetts Commonwealth Connector.

Massachusetts, Utah, or Nothing: How States Should Address Exchanges
John R. Graham of the Pacific Research Institute suggests how states should address the federal requirement for health insurance exchanges.

Massachusetts Moves Toward More Health Care Regulation
Sarah McIntosh, vice president at Missouri News Horizon, outlines the regulations of the Massachusetts Commonwealth Connector and documents their effects on health care.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at, The Heartland Institute’s Web site at, and PolicyBot, Heartland’s free online research database, at

If you have any questions about this issue or the Heartland website, contact Heartland Institue health care legislative specialist Kendall Antekeier at [email protected] or 312/377-4000.