Just last week Massachusetts Governor Deval Patrick signed a piece of legislation that, while celebrated at the state capitol, should give residents of the Bay State a shudder. And not only Bay State residents, but Americans in the other 49, have cause for concern. That’s because the bill that Governor Patrick signed was designed to contain skyrocketing costs associated with the state’s public healthcare plan through de facto care rationing. Since Mass Care is, in effect, Obamacare on the state level, when the wheels come off the proverbial bus of the Massachusetts plan, it concerns me greatly for the country.
Massachusetts is providing Americans a sneak peak of what will happen under a nationalized healthcare system, and the picture isn’t pretty. Due to state subsidies for health insurance plans, coupled with mandates that employers provide insurance and that individuals buy it, the cost of healthcare is soaring. This shouldn’t surprise any student of economics for, as with any other commodity, the cost of healthcare will rise when there is a sudden shock in demand (resulting from forced insurance purchases followed by increased usage of the healthcare system), while the supply of a good or service stays relatively static in the short term. This rise in the cost of healthcare translates into more expensive health insurance premiums, which translates into greater state expenditures to cover the cost of those premiums through subsidy programs.
Now, in order to try and contain and conceal the cost of the Mass Care monstrosity, Governor Patrick and the legislature have implemented a cost containment bill that will restrict insurance providers from increasing their premiums beyond government-approved levels. The state government has pegged growth in premium support to the size of the state’s gross domestic product (GDP), which is growing much slower than the price of healthcare services. This means that insurers cannot adjust premium prices to appropriately absorb these new costs without being penalized by the Massachusetts state health bureaucracy. The result: healthcare will now be cost contained by rationing. Insurers in collaboration with state officials will set new standards for what is considered a legitimate healthcare need, thus taking crucial healthcare decisions out of the hands of doctors and patients.
If this is already happening in Massachusetts, due to increased coverage mandates imposed by the legislature and Governor Patrick, one can only imagine how long it will take to happen on a national scale. The healthcare infrastructure in Massachusetts is falling apart, as some insurers are now refusing to operate in the state, and many doctors are moving out. If such a scenario unfolds nationally, it will mean the end of the private insurance market, the rise of the public-only “option” and the era of bureaucrats deciding who gets care and when.
Governor Romney and Congressman Ryan should point to the cost containment measures in Massachusetts as a harbinger of things to come in this country if Obamacare is not repealed. Though Governor Romney was the author of the original healthcare plan in the Bay State, he must admit that it was a mistake, and point out that Democratic Governor Patrick and the state legislature have expanded it far beyond his original intent. If we cannot make the case against Obamacare in order to repeal and replace it, then our national healthcare infrastructure is in grave danger. Just ask folks in Massachusetts.