Yesterday, Fortune Magazine posted an article entitled, "5 painful health-care lessons from Massachusetts." As someone who lives in Massachsuetts, I was already well aware of the problems with our state health-care program, but I will share Fortune Magazine's list.
1. It does not control costs--Massachusetts has the most expensive health-care in the nation--in the four years the law has been in effect, the cost of health insurance has not gone down, but climbed rapidly.
2. Community rating, guaranteed issue and mandated benefits swell costs. Because the fines for not having health insurance are low, many people choose not to have covereage. Insurers are getting socked by people who sign up for insurance to get expensive care mandated under state law, including hospitalization for childbirth or hip replacements, and then depart once the procedure is completed. This has resulted in the insurance companies demanding higher premiums to pay for the additional cost. So far the Governor of Massachusetts has generally not approved these rate increases.
3. High subsidies for low-to-medium earners could prove extremely expensive. This also places more cost on the insurance companies, who then must raise premiums to make a profit. As the plans become more expensive, employers will stop covering workers and created a bigger pool of people seeking government healthcare coverage, which will in turn drive up the government's costs.
4. The exhanges reward people for working less and earning less. This is not a good way to encourage productivity.
5. The generous plans and added mandates give employers an incentive to drop health insurance.
The article concludes:
"Starting in 2017, the states will have the option of allowing companies that drop their plans to shift workers into the subsidized, state-run exchanges. That choice doesn't exist now in Massachusetts. It's not that employers are likely to dump their plans en masse. What's far more probable is a progressive erosion that relentlessly and systematically raises government spending.
"The incentives are there, both in the federal plan, and its prototype in the Bay State. And when the incentives are that big -- and when subsidies inevitably get bigger, not smaller -- no amount of regulatory tinkering can stop America's employers and employees from taking the government's money, and saving their own."
The bottom line here is simple--the free market works better than the government. We ignore that fact at our own risk. If we continue down this road, we will become Greece.
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