he Wall Street Journal reminds us:
Natural experiments are rare in politics, but few are as instructive as the prototype for ObamaCare that Massachusetts set in motion in 2006. The bills for “universal coverage” are now coming due, and it appears the state political class is prepared to do lasting damage to one of America’s top-flight health-care systems. …
… average Massachusetts insurance premiums are now the highest in the nation. Since 2006, they’ve climbed at an annual rate of 30% in the individual market. Small business costs have increased by 5.8%. Per capita health spending in Massachusetts is now 27% higher than the national average, and 15% higher even after adjusting for local wages and academic research grants. The growth rate is faster too.
… As in Washington, the political class and providers blame insurers, but a better culprit is the state’s insurance regulation. Incredibly, the average “medical loss ratio” in Massachusetts for individual policies is 112%—that is, insurers pay $1.12 in benefits for every $1 in premiums.
This is the direct result of forcing insurers to charge everyone more or less the same rate regardless of age or health status, which makes it rational for people to wait to enroll until they need expensive coverage. …
Another reason costs are so high is that state regulations have mandated that insurance coverage be far richer than the rest of the country. The average insurance deductible is 28% lower than the U.S. average, and the benefits are more generous with less cost-sharing. Patients are thus insensitive to the cost of care. …
… This is the true target of Mr. Patrick’s price controls: The goal is to engineer a cheaper system through brute force so government can pay for health care for all. What inevitably suffers is the quality of care for individual patients. Thirty states imposed hospital rate setting in the 1970s and 1980s. Except for Maryland, every one of them eventually eliminated it—including Massachusetts, in 1991—partly because it didn’t control costs.
And partly because it killed people. A 1988 study in the Journal of New England Medicine found that the states with the most stringent rate-setting had mortality rates 6% to 10% higher than those that didn’t.
All of this is merely a preview of what the entire country will face if Democrats succeed with their plan to pound ObamaCare into law in anything like its current form. Massachusetts is teaching the country a valuable lesson in how not to reform health care, if only anyone would pay attention.
Read the whole article: Back to the ObamaCare Future – The Massachusetts ‘model’ moves to price controls.
(via Arnold Kling)
