If Massachusetts is the laboratory for ObamaCare, consider this an explosion.  The Boston Globe reports that employers have begun doing precisely what everyone knew they would do when insurance prices spiked: dump health plans.  Companies that used to offer health-care coverage are paying the fines and saving money by dumping their employees into state-run coverage (via Newsalert):

The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budget.

Since April 1, the date many insurance contracts are renewed for small businesses, the owners of about 90 small companies terminated their insurance plans with Braintree-based broker Jeff Rich and indicated in a follow-up survey that they were relying on publicly-funded insurance for their employees. …

The Massachusetts Division of Health Care Finance and Policy annually surveys employers and found no significant drop in coverage as of the end of 2009, when more than three-quarters of companies offered health insurance.

But insurance brokers say the pace of terminations has picked up considerably since then among small companies, of which there are thousands in Massachusetts. Many of these companies — restaurants, day-care centers, hair salons, and retail shops — typically pay such low wages that their workers qualify for state-subsidized health insurance when their employers drop their plans.

“Those employers are trying to keep their doors open, and to the extent they can cut expenses, they will cut health insurance because they know their people can go to Commonwealth Care,’’ said Mark Gaunya, president of the Massachusetts Association of Health Underwriters, a trade group representing more than 1,000 brokers and other insurance professionals.

Actually, in Massachusetts it may be more of a race to see who gets to the ultimate finish line first.  Will businesses under extreme economic duress and competitive pressure start dumping employee health insurance coverage before health insurers go out of business?  Governor Deval Patrick countermanded rate hikes from major insurers this year, which means they have no way to cover the rising costs created by the must-insure mandate and other legal restrictions in Massachusetts.  The question will probably be what will come last — the barbecued chicken or the scrambled egg.

Otherwise, the economics are rather simple.  Employers face a fine of less than $300 per employee not covered by health insurance.  They have to pay thousands per employee every year for the insurance. In this economy, which option will look best — especially when a company’s competitors dump coverage to keep prices low?  Anyone who has run a business can answer that question easily.

The same exact incentives exist in ObamaCare, as CBS belatedly discovered after its passage.  With the Senate and the White House eyeballing price controls for health insurance, the federal system will have the same perverse incentive structure as Massachusetts, and businesses will eventually respond to them in ways that will create a de facto single-payer system in the US.  That appears to be more like a designed outcome than a policy mistake as Barack Obama and Congress follow the Massachusetts playbook.