Free Markets, Free People

Deval Patrick


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