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We have seen the future—and it is Massachusetts, and it doesn’t work.
“We continue to study Massachusetts’ health overhaul experiment as a harbinger of ObamaCare. And we continue to see serious problems ahead,” observes Grace-Marie Turner of the Galen Institute in a must-read piece on the disaster in the Bay State.
Turner has done an excellent job of breaking down the many ways in which the Massachusetts system shows “the near impossibility of containing costs in a system where incentives go in exactly the opposite direction.”
“On average, health insurance now costs $14,723 for a family of four in Massachusetts, compared to $13,027 nationally. That’s nearly 12 percent higher than the national average. Reform has not made insurance more affordable,” Turner notes.
“[S]ome small Massachusetts employers are dropping health insurance and sending their workers into the taxpayer-funded health insurance pool. They say they have no choice because of relentlessly rising costs. This spells trouble for taxpayers.”
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President Obama has hailed the Massachusetts healthcare plan as being “essentially identical” to the one Congress enacted, despite public protests, just 100 days ago.
So, here’s the bad news: the Massachusetts plan is a total disaster. Joseph Rago, an editorial writer at the Wall Street Journal, has a devastating critique of it in today’s newspaper. You might want to take an aspirin before you read it…
Rago notes:
As events are now unfolding, the Massachusetts plan couldn’t be a more damning indictment of ObamaCare. The state’s universal health-care prototype is growing more dysfunctional by the day, which is the inevitable result of a health system dominated by politics.
The problem addresses is that the program is simply financially unsustainable—insurance companies have higher costs because of the system, and the government has only one way to halt the rise in costs: caps. Caps, really, are a solution only in an imaginary world. They do not stop the cost to the companies from going up; they simply mandate the companies can’t charge an adequate amount to sustain them. That means that companies won’t remain solvent.
Rago reports:
Mr. [Robert] Dynan [a career insurance commissioner] 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).”
Sure enough, the five major state insurers have so far collectively lost $116 million due to the rate cap. Three of them are now under administrative oversight because of concerns about their financial viability. Perhaps [Governor Deval] Patrick felt he could be so reckless because health-care demagoguery is the strategy for his fall re-election bid against a former insurance CEO.
Like the national plan, the Massachusetts plan was sold to the public (to the extent it was sold to the public at all) in a misleading way. Rago:
An entitlement sold as a way to reduce costs was bound to fundamentally change the system. The larger question—for Massachusetts, and now for the nation—is whether that was really the plan all along.
“If you’re going to do health-care cost containment, it has to be stealth,” said Jon Kingsdale, speaking at a conference sponsored by the New Republic magazine last October. “It has to be unsuspected by any of the key players to actually have an effect.” Mr. Kingsdale is the former director of the Massachusetts “connector,” the beta version of ObamaCare’s insurance “exchanges,” and is now widely expected to serve as an ObamaCare regulator.
He went on to explain that universal coverage was “fundamentally a political strategy question”—a way of finding a “significant systematic way of pushing back on the health-care system and saying, ‘No, you have to do with less.’ And that’s the challenge, how to do it. It’s like we’re waiting for a chain reaction but there’s no catalyst, there’s nothing to start it.”
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.
But the political class can’t control spending. All the government mandates or price caps in the world won’t reverse the costs of the Massachusetts plan, and, when a similar system goes into effect nationwide, the problems of Massachusetts will be multiplied fifty-fold. We will have a healthcare system that simply can’t be sustained. Whom does that benefit?
Health insurance companies were vilified during the debate (if you can call ramming an unpopular bill through Congress a debate), but if they go under, we’ll regret it. I guess we’ll just have to mandate that they stay in business?
Here’s an idea: If the political class can’t control spending, then the national bill must be repealed and replaced.
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Kathleen Sibelius, who as Secretary of Health and Human Services will be in charge of developing much of our new healthcare system, had an intriguing piece in Roll Call this morning. If you peruse the secretary’s article, you get the impression that the new healthcare system is already improving the lives of many Americans.
However, if you read Sibelius’ piece carefully, you might be more inclined to come away thinking that it is more rhetoric than reality. “In general,” said Cato Institute healthcare expert Michael Cannon, “the piece paints a picture of what they hope will be accomplished by the healthcare legislation as opposed to what it will actually accomplish.”
Let’s look at some highlights of the Roll Call piece.
Sibelius: Small businesses, which have increasingly been forced to drop health care coverage over the past decade, are also getting some relief: In addition to new tax credits available this year, small businesses will be able to band together in new Small Business Health Options Programs to negotiate better deals for health insurance beginning in 2014. And large employers have gotten help, too, in the form of an early retiree reinsurance program, which will help ease the burden of soaring legacy health costs.
In reality, the heralded tax credits for small businesses are so small as to be insignificant, more window dressing than anything else, say critics. A calculator chart by the National Federation of Independent Business estimates that the small business credit for a typical employee making around $36,000 a year will be something in the neighborhood of $308. The NFIB cautions that these figures are tentative since the provisions of the legislation are just now unfolding. But I think we can all agree that $300 isn’t going to make much difference to any business.
Some critics of healthcare reform have gone so far as to claim that the credits are so small as to be utterly meaningless.
Sibelius: Meanwhile, all Americans are beginning to see the impact of strengthened consumer protections, which are being implemented ahead of schedule through our partnerships with insurance companies. Private insurers have promised to end the practice of rescinding coverage from people when they get sick because of paperwork errors, and 65 of our largest insurance companies have agreed to allow young adults under age 26 to stay on their parents’ coverage.
In reality, you’d have to have an inaccurate picture of what health insurance companies can do now to buy this claim. “There’s nothing new here,” said Marie Grace Turner of the Galen Institute, which focuses on health and tax policy, “it’s just rhetoric. Companies legally now can’t rescind insurance coverage when people get sick—they can only rescind coverage when people commit fraud.”
Turner admits that allowing young people to remain on their parents’ policies is having an impact: it is causing premiums to rise. You simply can’t have new services without somebody picking up the tab.
Sibelius: Over the past year, President Barack Obama has made it clear that these people should be able to keep their plans. To make sure that happens, we recently issued a new regulation on “grandfathered” plans that gives important new protections and benefits to Americans while ensuring that insurers have the flexibility to keep offering preferred plans.
Where to begin? The problem is that, yes, you can keep a plan that is grandfathered into the new system, but the plan will likely have so many mandated, new features, none of which are free, that it’s really not your old plan at all. The National Federation of Independent Businesses has figured out what the allegedly grandfathered policies will really be:
“Unfortunately, the restrictiveness of these regulations removes the already limited choices small businesses have to try to keep up with the ever-increasing cost of plans. The Administration is essentially making it harder for small firms to continue offering healthcare, much less keep what they’ve got,” notes in a report on its website.
Sibelius: The Affordable Care Act takes aggressive steps to eliminate waste, fraud and abuse in our health care system — especially in Medicare, where billions of dollars a year are lost and seniors pay the price.
Well, good luck! Who’s not in favor of eliminating fraud, waste, and abuse? But if it were that easy, we’d have done it long ago.
Sibelius’s piece is just one more effort to convince people by rhetoric of things that their lying eyes (and checkbooks) will perceive otherwise. All the happy talk in the world isn’t going to change public perception of the emerging, new healthcare system.
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Jacob Hacker, the Yale professor who is considered the father of the public option, has a piece in support of the current health-care bill in Politico today. It concludes like this:
We have a once-in-a-generation moment to pass reform, and we must seize it. But what we pass must be understood as only a step — an important but ultimately incomplete step — toward the goals that the inspiring campaign for the public option embodied.
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Christmas week, and we have much to be thankful for in this country. Even so, we can’t miss the solemn fact that more than health-care, gigantic though that is, was at stake in the vote-by-dark victory of Senator Harry Reid. Senator Judd Gregg has told National Review that we are now under a parliamentary system that allows supermajorities to usher in radical change without checks and balances:
Harry Reid’s health-care bill “was purchased,” says Gregg. “Our system of checks and balances is gone. We now have a government that lurches with great speed even though our system is founded upon incremental change.” And don’t hope that the House stops the runaway train, he says. “I think the House is ideologically even further to the Left than the Senate. There are many people there who are committed to taking us down the road toward nationalization.”
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Let us get this straight, Senator Nelson: You voted to impose heavy financial burdens on other states under the condition that our taxpayer dollars would ensure that your state doesn’t have to pay? Sounds bad. It is bad. Nelson may get this week’s “strange new respect” award from the media (then again, his deal was so blatantly corrupt that he might not). But elsewhere it’s going over like a lead balloon.
Nelson lamely says he struck the deal because Nebraska Governor Dave Heineman expressed concern that the massive health-care bill would impose an unfunded federal mandate that would “stress the state budget.” Governor Heineman responded to Nelson’s deal this way: “Nebraskans did not ask for a special deal, only a fair deal,” Heineman said in a statement Sunday.
This process was not democracy in action. It was profoundly depressing—the secrecy, the votes in the dark of night. Robert Samuelson, perhaps the country’s best economics columnist, says that ultimately, when we know how health-care “reform” affects our lives, it will not be the legacy the Democrats want. Scant comfort. By then, we’ll be paying huge freight (for our own states, plus the tab for Nebraska) for medical care that isn’t as efficient as what we now have. Instead of extending the benefits of an excellent medical system, we will have extended the long arm of the government.
The only comfort I got over the long weekend was from a piece by Bill Kristol, who went to Wikepedia for the definition of Pyrrhic victory, the term that is being applied to the Democrats’ big win. He concluded:
So: Pyrrhus’s victory became Pyrrhic because the victorious party lost many of its supporters–but also because the opposition didn’t abate in courage, was able to gain new recruits, and had the force and resolution to go on.
We must keep fighting.
Hubris of the Week Award: To end on a lighter note, I am giving my Hubris of the Week award to Victoria Kennedy, who “humbly” asked Congress to pass this monstrosity in memory of her late husband, Senator Edward M. Kennedy.
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Senator Harry Reid has “reverse-engineered” the health-care vote to take place on Christmas Eve, in the words of National Review’s Rich Lowry. Lowry has a fascinating item on how it could go down tomorrow:
This is how I understand the Senate state of play. Reid wants to unveil the bill on Saturday morning, around 7:30 a.m. That’s when 30 hours on the Defense appropriations bill expires. Reid will do it only if he is assured his 60 votes—to do otherwise would court legislative suicide. But he’s probably not there yet, or we already would have seen the bill. The chances are that he’s working multiple issues right now, given that Nelson says his concerns go beyond abortion. On Saturday morning, every hour will count. Reid has reverse-engineered this for a Christmas Eve vote. He needs to file for cloture on Saturday to make it. But he knows Republicans are going to demand that his manager’s amendment be read, and this takes time. Probably 8 or 10 hours. Reid needs to introduce the amendment early, so Republicans have no chance to push the reading past midnight, which will delay the filing of cloture until Sunday and push everything back a day and past Christmas Eve. If Reid files cloture on Saturday, then he’ll have a bunch of early-morning sessions like the one today to jam the schedule.
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Frankly, I don’t think this assessment of one of the methods by which the Democratic leadership may foist health-care transformation on the rest of us is hyperbole:
[T]he proposals before us now are of such a magnitude as to transform American life and work as we have known it. To have such momentous decisions made in the backroom by a half-dozen leaders (without the public’s having a chance to comment) and then to have it rubber-stamped by obedient backbench representatives and senators who have not even asserted their prerogative to read the bills they are told to vote for — if that were to happen, then our people’s Congress would become like the lackey-filled old Soviet Parliament.
To paraphrase Hannah Arendt: For the leaders to “speak in the form of commanding” and for the rank and file to “hear in the form of obeying” is not a transaction between free people.
Whatever the motives of their leaders, it is within the power — and it is the duty — of the rank-and-file members of Congress to insist on regular legislative order. Their careers — to say nothing of the republic — may require that insistence.
The writer is Tony Blankley.
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It has been reasonable to assume all along that the Democratic left would fall in line and vote for any final version of the Baucus bill before the Senate. But there are sounds of mutiny on the left. Perhaps the most astonishing critic to emerge in these later days of the debate is frequent White House visitor Andy Stern, president of the Service Employees International Union, a staunch supporter of the president.
The liberal critics may be lambasting Joe Lieberman and Ben Nelson, but if it were a really good bill, they’d have picked up a few Republicans and be in good shape. But the sound of the fury is deafening:
Liberal blogs such as Daily Kos are blasting the Senate bill, especially since it dropped a government-run “public option” and killed a plan to expand Medicare. Liberal House members are venting their fury at senators who are lukewarm on the revamp, especially Connecticut independent Joe Lieberman and Nebraska Democrat Ben Nelson. Labor unions are protesting proposed taxes on high-value insurance policies.
“It’s time for a couple of obstructionist senators to get out of the way, to not put their personal and political interests ahead of…the interests of millions of people who don’t have health care right now,” said Andy Stern, president of the Service Employees International Union, part of a union backlash against the bill that burst into view Thursday.
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Senator Ben Nelson is—as of this moment—still holding out against the health-care bill. He could block Harry Reid’s way to the magic 60. Politics Daily notes that what Nelson regards as insufficient language barring public funding of abortion isn’t his only drawback:
In addition to the abortion question, Nelson said he has serious concerns about what he sees as unfunded mandates for states, new taxes and the massive spending in the bill. “They way in which money is raised is not acceptable,” he said. “So if there isn’t a way to raise the money in tight times, I think you have to look at a scaled-back version.”
Senator Jim Webb of Virginia told a Richmond audience that he hasn’t made up his mind yet. I think that, pass or fail, the Democrats are in a bad spot—the unseemly way Harry Reid managed the process, the apparent lack of interest in what’s really in the bill or what the public thinks, and the buying of Senator Landrieu’s vote. It all looks bad.
