Wall Street Journal Pummels ObamaCare’s Massachusetts Precursor
Today’s Wall Street Journal editorializes against ObamaCare’s Massachusetts precursor, RomneyCare. Massachusetts Governor Deval Patrick, in an effort to contain its out-of-control cost, has now proposed hard price controls across almost all aspects of Massachusetts health care. For fiscal year 2010, taxpayer costs are $47 million over budget, and spending has grown on average 6.7 percent each year. Meanwhile, Massachusetts insurance premiums are at the nation’s top. Since 2006, they’ve climbed at an annual rate of 30 percent in the individual health market. Per capita health spending there is now 27 percent higher than the national average. Incredibly, the Journal points out, the average loss ratio for individual policies is 112 percent. The Journal attributes this to flat pricing which makes it rational for people to wait to enroll until they need expensive coverage and mandated policy benefits well above national norms. The Journal predicts Governor Patrick’s efforts will fail. Thirty states, the Journal points out, imposed hospital rate-setting in the 1970′s and 1980′s. Except for Maryland, every one eventually eliminated it — including Massachusetts — partly because costs weren’t in fact contained. That experiment had one more effect as well: it actually killed people. A 1988 study by the Journal of New England Medicine found that the states with the tightest rate-setting had mortality rates 6 to 10 percent higher than those that didn’t. Yet this same approach is what Harvey Rosenfield now appears to wish to bring to California. And, in the absence of an Insurance Commissioner and other public officials willing to stand up against it, he may eventually be successful.
March 1, 2010
Posted in: Blog