Wednesday, December 30, 2009

Does the GOP Shares Blame for Obamacare?

Besides the occasional Republican either voting for socialized medicine or preventing a filibuster of it, the guilt of the association with the proposal that passed the Senate and the GOP is very deep. In fact the recent bill, without the public option (but will force people into public care) looks increasingly like the failed experiment of Massachusetts.

Michael Tanner, a Senior Fellow with the Cato Institute recently noted that the primary highlights of Obama's health care program as it leaves the Senate mirrors the Massachusetts program that has become a nightmare. In particular, the final bill will likely include an individual mandate, a weak employer-mandate, middle-class subsidies, and increased insurance regulation.

The sweeping legislation passed in Massachusetts in 2006 set the stage for a dramatic shift in the role of government when it comes to health care. Critics warned at the time that the program would become more bureaucratic, more expensive, and less user friendly. Tanner believes that, three years later, that is exactly the case today.

Tanner notes that the problems with the program are significant and numerous:

  • In spite of practically bankrupting the state in order to get maximum participation among residents to get health insurance, 200,000 people remain uninsured.
  • The state requires every resident to have health insurance, yet that mandate seems to play only a small role in the number who get covered (evidenced by those who still remain without coverage). The real force behind insurance enrollment is due to the state's generous subsidies for the middle class.
  • If cost containment was an objective, Massachusetts has failed miserably because health care costs continue to rise much faster than the national average. In fact, since 2006, total state health care spending has increased by 28 percent. An increase in demand that comes with expanded numbers of those covered always leads to either higher costs or greater shortages (or both).
  • Insurance premiums have actually risen by eight to 10 percent annually. This is nearly double the national average. The "lower rates" we hear about in the political debate today are driven by smoke and mirrors and promise to be very short term.
  • New regulations and government controls are actually reducing consumer choice and adding to health care costs. The government found itself in a powerful position once Massachusetts passed this measure. With that power the government only continued to expand controls at the expense of consumers.
  • Program costs have exploded in spite of significant tax increases. To counter this, the state is considering a freeze on insurance premiums, reductions in reimbursements to providers, and even the possibility of implementing a program that would essentially ration health care. This promises to chase insurance companies and doctors out of the state, which only leads to higher prices and more shortages. A vicious cycle for the people of Massachusetts.
  • As a result, there has been a shortage of providers, combined with an increase in demand, leading to increasing waiting times to see a doctor. As physicians find it more profitable to practice elsewhere, this situation will only increase.

Anyone seriously considering the health care bill navigating through the Congress should do so with great caution in light of the lessons that we have learned from Massachusetts.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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