Mass. health meltdown is your future

New York Post, May 25, 2010

The future of US medicine under ObamaCare is already on display in Massachusetts. The top four health insurers there just posted first-quarter losses of more than $150 million. Most of them blamed the state’s decision to keep premiums at last year’s levels for individual and small-business policies, when they’d proposed double-digit hikes to match the soaring costs they’ve seen under the state’s universal-coverage law.

The companies have gone to court to challenge the state’s action — it apparently had no basis for its ruling beyond the political needs of Gov. Deval Patrick. If they win, Bay State health premiums will continue their rapid rise; if they lose, they’ll eventually have to stop doing business in Massachusetts — and the state will be that much closer to a “single payer” system of socialized medicine.

The Massachusetts “health reform” disease means more than just bureaucrats setting prices. It also includes rising government spending and taxes; politicians demonizing doctors, hospitals and insurers — and patients getting lectured that the restrictions of managed care are good medicine.

It’s what’s in store for all of America. The Bay State’s structure provided the base for ObamaCare. “Basically, it’s the same thing,” says MIT economist Jonathan Gruber, who was a health adviser to GOP Gov. Mitt Romney and President Obama.

Like ObamaCare, RomneyCare includes a government-run exchange (the “Commonwealth Connector”), mandates and fines on individuals and fines on businesses. It expanded coverage mainly by expanding Medicaid. Of the 176,766 insured through the Connector, more than 152,000 are on subsidized plans, most paying nothing.

ObamaCare will follow suit. Richard Foster, chief actuary at the Centers for Medicare and Medicaid, reports that the law will add $310 billion over 10 years to federal spending and put 18 million more Americans on Medicaid.

Another similarity: RomneyCare offered no real means to control and ultimately reduce costs. Its backers made airy promises of redirecting monies from state-sponsored charity care to insurance premiums, claiming that an insured population would be healthier and save money. In fact, the state has begged Washington year after year for money to plug the system’s gaps. In the program’s first three years, the feds will have spent $21.2 billion — $3,000 per Massachusetts resident.

Actually, ObamaCare’s cost-control promises are even more fantastic — from supposed slashing of Medicare payment rates to politically impossible “Cadillac” taxes. The only real cost control in either plan will be the brute force of government.

A Boston Globe story from earlier in the dispute over rate hikes says it all: “Two of the state’s big health insurers face stiff fines after they submitted to the state revised premium rates for individuals and small businesses that differed from what regulators ordered.”

There’s no such thing as a market where bureaucrats set the price. Yet that’s what health care has become in Massachusetts under its reform.

“I don’t know how much clearer we could have been with them,” complained Massachusetts Insurance Commissioner Jack Murphy. He told the Globe: “We communicated four times what rates we expected. We’re considering all options. At minimum, both will face significant fines and potentially other penalties.”

When insurers then complained that they’d post losses, the Patrick administration lambasted them as “outrageous,” “uninterested in alleviating escalating health-care costs” and “in love with the status quo.”

Government finally caring about the little guy? Hold your cheers — because the inevitable next step is rationing at the point of consumption. Massachusetts state Senate President Therese Murray has proposed putting an end to “fee for service” medicine in the next five years and moving to a system of capitated managed care, where doctors receive a flat fee for each assigned patient.

This “HMOs for all” approach is designed to lead to soft rationing — which, in medical terms, means people will have a hard time finding doctors or seeing the ones they have. It’s already started. In Massachusetts, one doctor in two is not accepting new patients. Waits for treatment in Boston are the highest in the nation.

And Medicare’s chief actuary predicts the same fate under ObamaCare. “It is reasonable to expect that a significant portion of the increased demand for Medicaid would be difficult to meet,” Richard Foster wrote in a recent report.

Get ready, America: If nothing else, ObamaCare will put the patience back in being a patient.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Scroll to Top