President Barack Obama has an unsettling defense of his health-care reform — it’s merely a version of the plan implemented by Massachusetts.
Obama wants to associate his reform with the one championed by Mitt Romney in 2006 when he was governor of the Bay State. If the liberal Democrat Obama and the conservative Republican Romney passed similar plans, what can be so radical about Obama’s reform?
This is superficially clever. It not only gives Obama’s plan a centrist patina, it shines a light on a significant obstacle to Romney’s likely repeat bid for the Republican presidential nomination. Except for the fact the Massachusetts reform is spiraling out of control.
If the states are the laboratories of democracy, ObamaCare’s Menlo Park is about to blow up. Unsustainably high costs and high insurance premiums are leading inexorably toward price controls and rationing. Obama might as well boast that he’s adopted a version of the California fiscal plan, or the Michigan economic-recovery plan.
Obama is correct that his plan and Romney’s share essential features: a mandate that individuals buy insurance, fines on business for not offering coverage, heavily regulated insurance exchanges, and large-scale insurance subsidies and Medicaid expansion. They share something else — utterly fanciful notions of cost control.
Romney believed — and still maintains to this day — that emergency-room visits by the uninsured shifted costs onto everyone else. Never mind that in post-reform Massachusetts there are just as many nonemergency visits to the emergency room as previously, even though only 3 percent of people are uninsured. Many of these patients simply have trouble finding a doctor, a shortage the Massachusetts reform only exacerbates.
Massachusetts has created a different cost-shift problem through its ObamaCare-style guarantee that people can wait to get coverage until they’re sick or want medical procedures. The Boston Globe reports, “Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.”
Predictably, costs in Massachusetts — always high — have only gone higher; the state now spends about 30 percent more per capita on health care than the rest of the nation. Predictably, the insurance regulations have only made insurance more expensive, as has been the case elsewhere; premiums in the individual market have been growing at a 30 percent annual rate. Predictably, the new health-care program has cost more than expected; spending grew by about 40 percent from 2006 to 2009.
At first, Massachusetts plugged the holes with more taxes and fees. Now, just as Obama is hailing the state as his opening act, it is moving to the next inevitable phase: unapologetic price controls.
The state’s regulators have rejected 235 of 274 premium increases proposed by insurers, in an extraordinary exercise of a power that had sat idle on the books since 1977. As The Wall Street Journal points out, the big insurers in Massachusetts are nonprofits like Blue Cross Blue Shield and Harvard Pilgrim, hardly the comic-book villains of liberal rhetoric. The state’s arbitrary clamp-down on rates will force insurers to cut access to care, or go out of business. As subtle as a kneecapping, the state’s move is rationing by proxy.
Insurers have taken to the courts, and most of them stopped offering new coverage for individuals and small businesses pending a ruling on their request for an injunction. Massachusetts Gov. Deval Patrick, meanwhile, wants the power to review the rates of hospitals and doctors and disallow those deemed too high.
And so the free lunch promised Massachusetts in 2006 devolves toward a fiscally beleaguered government setting prices and limiting care, exactly the downward spiral critics fear from ObamaCare. At least Romney can say he didn’t know how his experiment would end. Obama has been warned, and still embraces Massachusetts as our national future.
Rich Lowry is a syndicated columnist. He can be reached via e-mail at: email@example.com.