American Elephants


The “Massachusetts Miracle” has gone Poof! by The Elephant's Child
March 17, 2009, 1:38 am
Filed under: Domestic Policy, Freedom, Politics, Taxes | Tags: , ,

Almost everyone knew that it was only a matter of time.  The story appeared yesterday in the New York Times and was summarized by James C. Capretta in the Corner today:

Having promised lavish subsidies for expansive health insurance, it seems state officials in Massachusetts have finally begun to admit that their health-care reform program, passed in 2006, is unaffordable for the state’s taxpayers.

It was really clear from the beginning that the plan would overwhelm the state’s budget.  It was only a matter of time. The state forced hundreds of thousands of residents into heavily regulated insurance plans by shuffling around some existing money and raising taxes.  They didn’t construct a marketplace with cost-conscious consumers, nor did they pursue the heavy-handed kind of government-imposed cost controls that Democrats love.  There was no reason to expect health-care costs to suddenly stop increasing rapidly after the “reforms” than there was before the plan was adopted.

Now it is really hard to turn back and start over, since hundreds of thousands of Massachusetts households are now enrolled in subsidized insurance. Surprise, surprise.  The state now wants to impose cost-controls.  Bureaucrats will now develop wonderful new systems for paying doctors and hospitals, which will reward “more efficient” ways of delivering care.  Inevitably, when the government tries to micro-manage payments, prices and protocols, the result is a mish-mash of cuts in quality, service and satisfaction, and disincentives throughout the system.  Doctors are moving out of state, fewer physicians are willing to practice in the state.  All predictable.   Democratic Governor Deval Patrick has already spoken of state-imposed caps on private health insurance premiums.

Mr. Capretta adds:

The Obama team is essentially pursuing the Massachusetts political strategy — cover everybody first with a massive new entitlement program and worry about imposing cost-controls later.  In fact, Sen. Ted Kennedy’s top lieutenant assigned to pulling together a health-care bill was a principal architect of the Massachusetts approach.  And on costs, the Obama administration keeps touting the same benign-sounding initiatives— like expanded use of health information technology — that Massachusetts officials used to cite, even though the Congressional Budget Office (CBO) has already said these kinds of steps won’t come close to solving the cost problem.  It is obvious that the administration is hoping it can get a bill passed without endorsing the kinds of measures which would rightly be attacked as rationing care.

Oh, they won’t mention rationing right off the bat, but in a year or two, when it is too complicated to go back, the financial future of the country will depend on government-imposed cost constraints.

Even the Times story hints at what is really at stake here.  If we don’t rely on market principles to allocate health-care resources, the country will inevitably turn to the government to keep premiums in line with income.

The thing you really need to remember is that members of Congress have no intention of giving up their highly satisfactory health care plan, and joining whatever government controlled program they can gin up.  That little fact alone should tell you everything you need to know.


1 Comment so far
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Nice post! Keep it real.I have looked over your blog a few times and I love it.

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