Take an Aspirin • Wall Street Journal

/2010/07/07/you-might-need-to-take-an-aspirin-before-reading-about-massachusetts-healthcare/

By Charolotte Hays

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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