Universal health care recently celebrated its second — and perhaps final — birthday in Massachusetts. There’s not a lot of cause for celebration. Although a success in the media and a blueprint for other politicians seeking solutions to health care — including Democratic presidential hopefuls Barack Obama and Hillary Clinton — it’s proven a failure in its home state. Its father, former Republican Gov. Mitt Romney, has fled the political scene, unable to get traction in the presidential race. His partner, Sen. Edward M. Kennedy, D-Mass., current governor Deval Patrick, and a host of bureaucrats are left to deal with the mess.
The program is in intensive care, surviving only on massive infusions of other people’s money. The plan’s boosters celebrate that it’s covered 342,000 people. Quite an accomplishment until we understand that of these, 176,000 are enrolled in nearly free or entirely free plans — free to enrollees but not state and federal taxpayers. Another 55,000 were simply enrolled in Medicaid.
This is all quite expensive but was supposed to be covered by simply shifting dollars that were already in the system, allegedly being frittered away by free-riders who elected not to purchase insurance and companies who didn’t pony up for employees. Projected revenues from business, however, are nowhere to be found. Transfers of dollars from the existing free care pool are lower than expected — even as charity hospitals that rely on these monies report major hardship. Bureaucrats long ago gave up hope of providing universal coverage, even with the mandate. Among their early acts was to exempt 20 percent of the state’s uninsured from having to participate in the universal insurance program. Now they are clinging to the hope of merely keeping the massive welfare expansion afloat.
This entire mess was predicted. The original promise of reform — like the promises currently coming from Obama and Hillary — was absurd. As if by magic, the public was told that the state could cover everyone, reduce the cost of health insurance, and save money on health care simultaneously. Free riders were demonized and told to purchase insurance.
A few of us objected loudly at the time. We employed logic, economics, history and a bit of humor. “The elected leaders of Massachusetts have come up with a novel solution for the vexing problem of having to pay for health care,” wrote economist and author Arnold Kling in the Wall Street Journal in April 2006. “Abolish the laws of arithmetic.” Kling and others pointed out the peril to state taxpayers of offering a new government program based on a $219 penalty for not purchasing a health care plan with a zero dollar deductible and an average cost to taxpayers of $6,000.
The bipartisan brigade marched ahead anyway and put the bill into law in April 2006. The system immediately conformed to our expectations. When premiums came in higher than predicted by politicians, the politicians leaned on the carriers, increased taxpayer subsidies, and exempted people from having to purchase the insurance. People flocked to the free plans, but were a bit slower to reach into their pockets for the plans that required premiums. Those who did, however, proved to be heavy users of the system. The plan was far enough gone that a year ago we penned a birthday op-ed predicting that even as backers had abandoned universal coverage, costs were set to skyrocket.
The next year went from bad to worse. Even as Hillary and Obama travel the country promising to nationalize the Massachusetts experience, the folks in Massachusetts are in Washington begging the Bush administration for more money merely to keep it limping along. Politicians pegged estimates for spending on subsidized plans at $750 million for 2009. The current administration puts them at $869 million, and even this is expected to be $100 million short, an amount that is noticed in a state facing a $1.3 billion deficit.
Meanwhile, even the limited abilities and ambitions of local politicians and left-wing health care advocates have deteriorated. The new imperative, all agree, is cost control. Yet unwilling to employ even the slightest free-market mechanisms and deregulation, they are peddling more of the same medicine that is causing the sickness. The leading state senator, Senate President Therese Murray, is pushing a plan to spend more money on information technology and prohibit pharmaceutical reps from communicating with doctors.
The folks at a popular pro-universal coverage organization are looking to non-human sources of funding. “The costs of CommCare cannot be sustained by taxpayers and enrollees,” blogs Health Care for All executive director John McDonough. “It won’t work.”
This is simply to say that people can’t pay for it. So if people can’t pay, who can? McDonough and company, still in search of their free lunch, are pushing for price controls on providers and hospitals, as if these costs won’t ultimately be borne by people.
The nation owes a great deal of gratitude to Mitt Romney, Edward Kennedy, state representatives, the think tankers and health care activists who produced the Massachusetts plan. In providing a real life experiment in time for it to simultaneously be adopted by Democratic presidential candidates and implode under its own contradictions, it provides a reality check on the promises of today’s politicians.
When Hillary and Obama claim to be able to provide universal third-party insurance with only minor disruptions to the current system, voters can look to Massachusetts and understand that they are just making promises they can never keep.
Sally C. Pipes is president and CEO of the Pacific Research Institute. She is author of “Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer.”