NCPA - National Center for Policy Analysis

LESSONS FROM MASSACHUSETTS

August 29, 2007

Massachusetts' health care mandate provides a poor model for the rest of the country -- unless we are looking for an expensive expansion of government.  It won't achieve universal care.  It has increased government spending, bureaucracy and regulation.  It most certainly will prompt increased taxes, says Sally C. Pipes, President and CEO of the Pacific Research Institute.

This structure will produce a fiscal disaster, predicts Pipes:

  • Considering the high premiums for those who have to pay, many will opt to remain uninsured.
  • The fine of $216 will be more attractive than the premium.
  • Politicians will face strong pressure not to enforce the mandate if the fines increase; indeed, before the program started they exempted 20 percent of the target population.

At the same time:

  • The premium subsidy makes the plans a bargain for individuals who expect to consume large quantities of health care.
  • The insured will be older and less healthy than the average citizen; spending will skyrocket.
  • The taxpayer will be forced to pay or services will be rationed.

Massachusetts may be able to limp its plan along for a few years with a combination of tax increases on employers, restrictions on enrollees, and price cuts to providers, says Pipes.  It will not, however, achieve universal health insurance or a meaningful structure for cost control.  It most likely will create another government health bureaucracy, ratchet up taxpayer health spending and bolster calls for a complete government takeover of health care.

Source: Sally C. Pipes, "Lessons from Massachusetts," Townhall.com, August 23, 2007.

For text:

http://townhall.com/columnists/SallyCPipes/2007/08/23/lessons_from_massachusetts

 

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