Has Massachusetts Experience Put ObamaCare On A Path To Repeal?

ALG Editor’s Note: In the following featured oped from Investor’s Business Daily, the Pacific Institute’s Sally Pipes makes the case against government-run health care nationally and in Massachusetts.

By Sally C. Pipes

The new GOP majority plans to introduce a bill to repeal ObamaCare soon. What the Republicans are trying to prevent is what is already happening in Massachusetts, where a similar health care bill was enacted in April 2006. It is already imploding.

Unless ObamaCare is repealed, we’re on a path to Massachusetts’ future.

Eager politicians from former Gov. Mitt Romney to current Gov. Deval Patrick marketed Massachusetts’ health care plan, like Obama’s, with a series of distortions:

• The uninsured — especially young invincibles — were costing hospitals money that could be redirected to insurance premiums.

• They promised government efficiency.

• They focused on the assertion that primary care would replace emergency room use.

• They claimed both in Massachusetts and Washington, D.C., that we could build all this government health care bureaucracy and hand out these new benefits without new taxes while actually reducing long-term costs.

“Every uninsured citizen in Massachusetts will soon have affordable health insurance, and the cost of health care will be reduced,” then-Republican Gov. Romney wrote in the Wall Street Journal in 2006. “And we need no new taxes, no employer mandate and no government takeover to make this happen.”

Proponents of the Massachusetts plan now pretend that it never sought cost control. “The goal of the law was covering people,” says MIT economist and Massachusetts plan architect Jonathan Gruber, who also consulted on ObamaCare.

“It couldn’t have gone better,” he told the Washington Post. And the Post’s lead health-reform cheerleader, Ezra Klein, wrote, as if it’s fact, that the Massachusetts law “was not designed to control costs.”

The only measure by which Massachusetts can be judged a success is the number of people enrolled in Medicaid and other government-subsidized insurance plans. Of the 410,000 newly insured in Massachusetts, three in four are either paying nothing or very little for their insurance. They’ve also been successful in continuing to pull down massive subsidies from Washington to support the overhaul.

Spending has exploded. Medicaid, a problem in every state, is destroying Massachusetts. The health overhaul was really Medicaid expansion, and with the rolls up nearly 25% since 2006, Massachusetts is struggling to pay the bills.

The other promises turned out to be bogus as well. Despite the near-universal insurance, the state still spends $414 million on uncompensated care, an expense that Romney and his architects promised would disappear. Emergency-room use has not dropped as predicted. From 2006 to 2008, emergency room use under Mass Care increased by 9%. And private employer insurance costs, far from dropping, have continued to increase.

A 2010 study published in the Forum for Health Economics & Policy found that health insurance premiums in Massachusetts, prior to its overhaul, increased at a rate 3.7% slower than the national average. Post-overhaul, they are increasing 5.8% faster.

The individual mandate, as onerous as it is, is set at a level to encourage gaming the system. A family with an income of $55,000 in 2014 will face the choice of paying $4,428 a year for health insurance or a $550 fine. Given that insurance will be available on demand, it’s rational to pay the fine until a serious illness strikes.

Indeed, there is no strong demand for insurance among the uninsured. The individual market has existed for years and is lightly subscribed. The new high-risk pools created by ObamaCare are very undersubscribed. Bureaucrats projected that 375,000 would sign up by now. The actual number is 8,000.

The lie that Massachusetts never promised to control costs is amplified by the belief that Obama’s plan would do so. Other than price controls, commissions recommending best practices and a stealth HMO program for Medicare renamed Accountable Care Organizations, there’s little to control costs in the near term.

This brings us back to the Bay State, where politicians, bureaucrats and health policy sages have embarked on what they bill as phase two of the health care overhaul. Now that nearly everyone is insured, the effort is to replace the decentralized reimbursement system with a global budget.

In other words, give hospitals and doctors a pool of money and tell them to make do. Change the incentive from providing the best possible care to the best care the bureaucrats can possibly afford.

“Clearly we are going to have less resources,” Gary Gottlieb, CEO of Partners Health Care in Massachusetts, recently told a medical conference. “The most extraordinary ICU and the most extraordinary technology, without necessarily the evidence that it extends life … is not going to be accessible to us.”

A government-run HMO. Welcome to your future.

Pipes is president, CEO and Taube fellow in health care studies at the Pacific Research Institute. Her latest book is “The Truth About Obamacare” (Regnery 2010).