AlterPolitics

Robert J. Samuelson of the Washington Post highlights the similarities between Obama’s and Massachusetts’ health care plans — specifically, the fact neither did a thing to reign in costs — and Samuelson forewarns that the nation’s plan will likely suffer the same fate as the Bay State’s:

If you want a preview of President Obama’s health-care “reform,” take a look at Massachusetts. In 2006, it enacted a “reform” that became a model for Obama. What’s happened since isn’t encouraging. The state did the easy part: expanding state-subsidized insurance coverage. It evaded the hard part: controlling costs and ensuring that spending improves people’s health. Unfortunately, Obama has done the same.

Massachusetts, like Obama, was as timid in confronting the runaway profits of Big Pharma, health insurance companies, and medical professionals as it was committed to actually solving the escalating health care crisis.  The result: Massachusetts health care costs continue to soar:

Aside from squeezing take-home pay (employers provide almost 70 percent of insurance), higher costs have automatically shifted government priorities toward health care and away from everything else — schools, police, roads, prisons, lower taxes. In 1990, health spending represented about 16 percent of the state budget, says the Massachusetts Taxpayers Foundation. By 2000, health’s share was 22 percent. In 2010, it’s 35 percent. About 90 percent of the health spending is Medicaid.

State leaders have proved powerless to control these costs.  […]

Attacking unpopular insurance companies is easy — and ultimately ineffectual. The trouble is that they’re mostly middlemen. They collect premiums and pay providers: doctors, hospitals, clinics. Limiting premiums without controlling the costs of providers will ultimately cause insurer bankruptcies, which would then threaten providers because they won’t be fully reimbursed. The state might regulate hospitals’ and doctors’ fees directly; but in the past, providers have often offset lower rates by performing more tests and procedures.  […]

The lesson from Massachusetts is that genuine cost control is avoided because it’s so politically difficult. It means curbing the incomes of doctors, hospitals and other providers. They object. To encourage “accountable care organizations” would limit consumer choice of doctors and hospitals. That’s unpopular. Spending restrictions, whether imposed by regulation or “global payments,” raise the specter of essential care denied. Also unpopular. […]

What’s occurring in Massachusetts is the plausible future: Unchecked health spending shapes government priorities and inflates budget deficits and taxes, with small health gains. And they call this “reform”?

Though I agree with much of what Samuelson writes on medical cost containment, I disagree with his assertion that insurance companies are merely ‘middlemen’, therefore contributing little to runaway medical costs.   There is a long documented history of health insurance companies price gauging companies and patients with exorbitant premium hikes based on little more than ‘exaggerated justification’:

Aetna has become the second health insurance company in California since April to scrap planned rate hikes, following revelations last week that “math errors” in the company’s application exaggerated justification for the proposed rate increase.

The company had sought a 19 percent rate increase affecting 65,000 policyholders in California. […]

Anthem Blue Cross withdrew a much larger, 39 percent rate increase request in April that would have affected 800,000 policyholders in California, following detection by state workers of similar calculation errors.  […]

Filings for rate increases by Blue Shield of California and Health Net Inc. are also under review by state regulators.  […]

An expert hired by the New Mexico Attorney General’s office similarly concluded that Blue Cross Blue Shield New Mexico had inflated its losses to justify a controversial 21.3 percent rate hike, but the AG’s office nevertheless signed off on the rate hike. […]

U.S. Health and Human Services Secretary Kathleen Sebelius recently responded to these unjustified premium increases:

“I applaud California for its decision to shine more light on skyrocketing insurance rates and demand more accountability after uncovering that a second insurer used faulty math to try to justify exorbitant health insurance premium increases.”

Unfortunately, Obama’s decision to sidestep the central issue in this country’s health care crisis — runaway costs — will likely come back to haunt the Left. The forthcoming spiraling costs will most certainly be used by the opposition to undermine any future efforts for REAL reform.