NCPA - National Center for Policy Analysis

Has Massachusetts Experience Put ObamaCare on a Path to Repeal?

January 19, 2011

By trying to repeal ObamaCare soon, the new Republican majority are trying to prevent what is already happening in Massachusetts, where a similar health care bill was enacted in April 2006, says Sally C. Pipes, president, CEO and Taube Fellow in Health Care at the Pacific Research Institute.

Of the 410,000 newly insured in Massachusetts, three in four are either paying nothing or very little for their insurance and spending has exploded.  Medicaid, a problem in every state, is destroying Massachusetts. 

  • The health overhaul was really Medicaid expansion, and with the rolls up nearly 25 percent since 2006, Massachusetts is struggling to pay the bills.
  • Despite the near-universal insurance, the state still spends $414 million on uncompensated care, an expense that was promised would disappear.
  • Emergency room use has not dropped as predicted --from 2006 to 2008, emergency room use under Mass Care increased by 9 percent.

In addition, private employer insurance costs, far from dropping, have continued to increase.  A 2010 study published in the Forum for Health Economics and Policy found that health insurance premiums in Massachusetts, prior to its overhaul, increased at a rate 3.7 percent slower than the national average.  Post-overhaul, they are increasing 5.8 percent faster.  The individual mandate, as onerous as it is, is set at a level to encourage gaming the system, says Pipes.

  • A family with an income of $55,000 in 2014 will face the choice of paying $4,428 a year for health insurance or a $550 fine.
  • Given that insurance will be available on demand, it is rational to pay the fine until a serious illness strikes.

Other than price controls, commissions recommending best practices and a stealth HMO program for Medicare renamed Accountable Care Organizations, there is little to control costs in the near term, says Pipes.

Source: Sally C. Pipes, "Has Massachusetts Experience Put ObamaCare On A Path To Repeal?" Investor's Business Daily, January 12, 2011.

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