Earlier this month, we used DirigoChoice in Maine as an example of the disaster a public-plan health-care reform can generate. Cato Institute looks a little farther down the coast to Massachusetts, where the state began its own health-care reform complete with individual mandates and a government plan. Cato calls it an “almost perfect” mirror of ObamaCare, complete with promises of reducing cost and extending care — that failed in both respects:
Massachusetts reduced its uninsured population by two-thirds — yet the cost would be considered staggering, had state officials not done such a good job of hiding it. Finally, Massachusetts shows where “ObamaCare” would ultimately lead: Officials are already laying the groundwork for government rationing.
The most sweeping provision in the Massachusetts reforms — and the legislation before Congress — is an “individual mandate” that makes health insurance compulsory. Massachusetts shows that such a mandate would oust millions from their low-cost health plans and force them to pay higher premiums. …
In the three years since Massachusetts enacted its individual mandate, providers successfully lobbied to require 16 specific types of coverage under the mandate: prescription drugs, preventive care, diabetes self-management, drug-abuse treatment, early intervention for autism, hospice care, hormone replacement therapy, non-in-vitro fertility services, orthotics, prosthetics, telemedicine, testicular cancer, lay midwives, nurses, nurse practitioners and pediatric specialists.
The Massachusetts Legislature is considering more than 70 additional requirements.
This might be a good point to revisit another example of government-run care, in Oregon, where the government has a nifty way of determining medical priorities — it has politicians decide them. The Independence Institute had some fun with this:
Let’s get back to Massachusetts, though. What was the net result of government control and individual mandates? An explosion in costs:
“The effect,” writes the Boston Globe, “has been to provide more comprehensive insurance than in most other states but also to raise costs.” Premiums are growing 21 to 46 percent faster than the national average, in part because Massachusetts’ individual mandate has effectively outlawed affordable health plans.
In part, that comes from the same reason it costs more than three times as much for a healthy, 30-year-old single male in Maine to get insurance than it would if he crossed the border into New Hampshire. Massachusetts also imposed must-insure and community-ratings laws on insurers, which means that premiums skyrocketed to cover the risks in the pool:
Massachusetts long ago adopted another feature of the Obama plan: price controls that prohibit insurers from varying premiums based on a purchaser’s health status. Those price controls further increase premiums for the young and healthy.
They also eliminate comprehensive health plans. Obama adviser David Cutler found that in Harvard University’s price-controlled health insurance exchange, “adverse selection” or the attraction of the sickest patients caused premiums for the most comprehensive plan to rise until insurers eventually canceled it. Those price controls also encourage insurers to avoid the sick. And who can blame them, considering that the government is forcing them to sell a $50,000 policy for just $10,000?
One way insurers can avoid the $50,000 patients is to drop benefits those customers find attractive. Shelby Rogers is a 12-year-old girl with spinal muscular atrophy, whose parents chose an Aetna plan through the price-controlled health insurance exchange for federal workers. Last year, Aetna announced it would drop coverage for Shelby’s 12-hour-a-day nurse, who, among other things, helps Shelby avoid bedsores by turning her over at night. An Aetna spokesman explained the reason was to avoid offering a benefit that causes the sickest patients to flock to the plan.
ObamaCare advocates scoff at the notion that public plans and mandates will drive private insurers out of business, but that’s the direction Massachusetts has taken. The rapidly rising costs have prompted the commonwealth to begin considering care rationing. The state legislature has begun working on a policy of “evidence-based purchasing strategies” to keep costs down, but which will allow Massachusetts to deny care based on bureaucratic decisions of comparative effectiveness. Politicians will start making life-and-death decisions instead of patients and doctors.
And for all of that, what has been the fiscal cost? Massachusetts now spends $2.1 billion a year (and rising) – but you won’t find the state acknowledging that number. They claim it to be $88 million, as they shunt off most of the costs into budgetary devices intended to hide the true costs of its program.
It’s a disaster that even Massachusetts voters have begun to recognize. Hopefully, so will the rest of the nation.