Free Markets, Free People


The future of Obamacare is on display in Massachusetts

No one denies that Obamacare is modeled after the Massachusetts model signed into law there by Governor Mitt Romney. In fact, in 2006 then Senator Barack Obama called it a "bold initiative" that it would "reduce costs and expand coverage"  and as recently as early this year, now President Obama called his initiative, “essentially identical” to that of Massachusetts.

And that’s precisely how Obamacare was sold to the American public.  I use “sold” advisedly, since most of the American public made it clear they didn’t want what Obama and the Democrats were selling.  But regardless, they passed it into law anyway.

So now we turn our attention to the experiment that has been running in MA for years and what do we find?

Massachussets has the highest average health care premiums in the nation, according to the <em>Wall Street Journal’s</em> Joseph Rago.  In fact, Governor Deval Patrick has tried to cap insurance premiums, arbitrarily denying 235 of 274 rate increases submitted by the major health insurance companies serving the state (all nonprofits, by the way).  However a state appeals board has since reversed Patrick’s arbitrary caps.  The state is appealing the board’s decision.

In the meantime, the insurance companies have suffered $116 million in loses.

Robert Dynan, a career insurance commissioner responsible for ensuring the solvency of state carriers, wrote that his superiors "implemented artificial price caps on HMO rates. The rates, by design, have no actuarial support. This action was taken against my objections and without including me in the conversation."

Mr. Dynan added that "The current course . . . has the potential for catastrophic consequences including irreversible damage to our non-profit health care system" and that "there most likely will be a train wreck (or perhaps several train wrecks)."

As a result of the Patrick rate caps, three of the insurance companies are under administrative oversight because of concerns about their financial viability. And that’s not all. In order to cut costs, rationing and other measures are being contemplated:

Naturally, Mr. Patrick wants to export the rate review beyond the insurers to hospitals, physician groups and specialty providers—presumably to set medical prices as well as insurance prices. Last month, his administration also announced it would use the existing state "determination of need" process to restrict the diffusion of expensive medical technologies like MRI machines and linear accelerator radiation therapy.

Meanwhile, Richard Moore, a state senator from Uxbridge and an architect of the 2006 plan, has introduced a new bill that will make physician participation in government health programs a condition of medical licensure. This would essentially convert all Massachusetts doctors into public employees.

There are literally no surprises to be found in those two paragraphs.  All of this was foretold by critics of the Obamacare plan. All of it. These are inevitable outcomes of such a plan.  It was clear from the outset that Democrats and the administration were selling something they couldn’t deliver – essentially no changes in your coverage except less cost.  Massachusetts has proven that to be the pure nonsense critics called it from the beginning.  As Rago says:

In other words, health reform was a classic bait and switch: Sell a virtually unrepealable entitlement on utterly unrealistic premises and then the political class will eventually be forced to control spending. The likes of Mr. Kingsdale would say cost control is only a matter of technocratic judgment, but the raw dirigisme of Mr. Patrick’s price controls is a better indicator of what happens when health care is in the custody of elected officials rather than a market.

Or, as goes Massachusetts, so goes the country under Obamacare.

Is it any wonder 60% of the nation favors repeal?

~McQ

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14 Responses to The future of Obamacare is on display in Massachusetts

  • Richard Moore, a state senator from Uxbridge and an architect of the 2006 plan, has introduced a new bill that will make physician participation in government health programs a condition of medical licensure. This would essentially convert all Massachusetts doctors into public employees.

    Oh, boy!  So, our doctors will be state employees just like the friendly and efficient folks at the DMV!  And costs will not rise any more often than, say, the cost of a first class postage stamp!  Hey!  Maybe doctors can all become SEIU members, too!  This will give them the sort of job security they need to ensure first-class medical care to all people (how can you make the best medical decisions when you constantly have to worry about losing your job over some petty, so-called “malpractice”?).  I mean, look at how well a union labor force has worked out for GM and Chrysler.

    / sarc sarc sarc

    In other words, health reform was a classic bait and switch: Sell a virtually unrepealable entitlement on utterly unrealistic premises and then the political class will eventually be forced to control spending.

    Well, at least faceless bureacrats in eeeevil health insurance companies won’t be making cost-control decisions any more.  I mean, it is just so UNFAIR to have health care decisions made by anybody but the patient, his doctor, and wise government bureaucrats.

    / sarc

    • All your doctors belong to us.

      But yes at some point, doctors will have no choice but to unionize because ultimately to make the system work the government will put their salaries as legally next to zero as possible.

      Malpractice Law is next for the wood chipper.  Irony that I will enjoy since the trial lawyers love Democrats.

  • Gee…surprisibus, surprisibus…as Looney Toons would have it…

  • I never understood the enthusiasm for Romney.

    And this future of Obamacare was on display before the rotten thing was passed.

    Again, this, the heat, and I think of scaffolds.

  • “the major health insurance companies serving the state (all nonprofits, by the way).”

    If they weren’t nonprofits to start with, they are now.

    Germany has also recently increased its health care premiums to %15.5 of gross pay. This is in addition to copays, fees, and government subsidies.
     One good thing about the German health care system is that the financing is not hidden as it is in some systems.

    • You know something, there is something fundamentally wrong with the very concept of “non-profit.” If some entity doesn’t want its profits, then fine, let it give them to charity. But there is something disturbingly corrupt, seriously, in the notion of “not-for-profit.” Economically, profit is the signal to produce more of something. If you are not getting that signal, then what’s the point of your production?

      I have no objection to people selflessly devoting their profits to charity, or even to returning them to their customers after their expenses are met. But this special category of not-for-profit sounds like another magician’s top hat filled with sh!t for bureaucrats and “selfless altruists” trying to make a score. 

      • Isn’t it really just about avoiding income taxes?  Other than that, there really isn’t much of a difference.

        • I worked for a big non-profit once, and it was screwier than any real business I worked for. Always needing and trying to make money, but pretending to be uninterested in making money. It had the stink of intrinsic confusion all over it, and it was a very respectable operation in terms of its history and its mission.

      • Many of the non-profits with which I am familiar are very successful scams.  The executives who head them are VERY liberally compensated, and never really have to produce anything beyond press releases and self-congratulation.  There are a few exceptions…always enough to keep the deal alive.

  • Speaker Nancy Pelosi is doubling down on healthcare reform (AKA Obama Doesn’t Care), betting that it will do Democrats more good than harm in November’s elections. She and her leadership team have seized on new polls that suggest healthcare overhaul’s popularity is rising, and they are urging members of Congress to use this week’s recess to tout the new law.

    Is she playing with herself, I just saw that the number of people who what it repealed went 60%

    • Even if it were a committed, active 25%, we could carry the day.  I has been true throughout our history.  In this case, the economics make it even more sure.

  • If all this insanity wasn’t enough, FOX reported this morning that our beloved politicians (The ones trying on their tar and feather suits) simply didn’t report to us what they knew costs would be! They clearly planned to say to us after the fact, “Oops, we forgot.”

    BTW, Willard “Mitt” Romney is still being talked about as if he stood a chance in hell of running in 2012. Please inform everyone who even mentions his name of what they should have learned in 2008:  http://tinyurl.com/yg4s7ma 

    • None of the guys who ran last time will have a chance this time. It will be a succesful GOP governor, either Jindal, Perry, Christie, or someone else.

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