Cannon: Massachusetts' Obama-like reforms increase health costs, wait times

Michael F. Cannon, of the Cato Institute, wrote an interesting article on the effects on health care of the Massachusetts reform of health care in 2006. He notes that:

• 29% of Massachusetts' voters believe the reform lowered the quality of care, while 10% believe it improved care.
• 27% believe reform made health care less affordable, while 21% believe it made it more affordable.
• 37% believe the reforms are a failure, while 26% believe they were a success.

But what on Earth do Massachusetts voters know anyway? They voted overwhelmingly for Dukakis, Gore, Kerry, and Obama. They also sent Teddy Kennedy to the Senate for 8 terms or 46 years, though he did not finish his last term in office. But, this health care reform was initially very popular in Massachusetts and it does have all the essential features of the Obama - Pelosi - Reid health care reform plans. The Massachusetts plan is already unpopular even in a state much committed to socialism and despite the fact that many of its faults are hidden as yet from many of the people.

Massachusetts did reduce the number of uninsured by two-thirds, or 432,000 people. The cost is at least $2.1 billion in 2009, or an average cost per 4-person family of about $20,000, which is well above the average cost of $13,000 of an employer-sponsored family policy. But, the average Massachusetts voter does not know how bad costs are because many of the costs are well-hidden from him.

As with the Obama - Democrat plans:

• Every person is required to pay for health insurance.
• Approved health insurance plans must accept already ill individuals.
• Approved plans must also cover 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 national plan will evolve in this direction due to lobbyist power also.
  
• 70 addition requirements for plans are under consideration in the legislature.
• Price controls to prevent insurers from basing premiums on the health of the individual.

So, what are the observed effects?

• Premiums are growing 21 to 46% faster than the national average, whose rapid growth rate is supposed to be a great part of the reason for a Massachusetts or Obama health plan.
• The young and healthy have to pay much more to cover the costs of those already sick and joining their plan.
• Low cost plans are no longer available.
• Plans with more extensive benefits than those required by Massachusetts are disappearing because the sick want to be in such very comprehensive plans. The costs for such plans are going up particularly quickly, so insurers will not offer them.
• In 2004, Boston already had the nation's longest waiting times for medical care of all metropolitan areas. The waits in Boston have since increased to 7 weeks, while the average wait in other metropolitan areas has shortened to 3 weeks.
• Taxes have been raised on hospitals, tobacco, insurers, employers, and coverage of legal immigrants has been reduced to eliminate the 20% of that cost charged to the state.
• The high costs caused a legislative commission to recommend a single-payer system such as Canada's and evidence-based purchasing strategies to ration care not only for Medicare patients, but now for everyone.
  

Many of the costs are not borne by the state. The individual mandate to own insurance has put about 60% of the increased costs on the individual's back. The federal government, or the federal taxpayer, pays about 20% of the costs, and the taxpayers of Massachusetts pay about 20% of the costs. In other words, the struggle that Massachusetts is having to pay the costs is due to only about 20% of the costs. Non-Massachusetts taxpayers are paying about 20% of the costs minus that amount paid by Massachusetts taxpayers as federal taxes. So, one way or another, Massachusetts taxpayers are paying more than 80% of the costs.

The Boston Globe badly misrepresented the cost to Massachusetts taxpayers as only about $88 million per year or about 19 times less than the real cost, despite taxpayers outside Massachusetts paying a very large tip on the tab. The New York Times did a more accurate job of estimating the costs: it was only a factor of 3 too low!

In Massachusetts, it is very clear that if you liked your health insurance plan, you were not allowed to keep it. Obama's promise does not apply in Obama-mad Massachusetts and for the same reasons, it will not apply in the entire U.S. soon after the Obama plan becomes law. We had better see to it that it does not become law.