IT has been written before, but if you want to know what will happen when Obamacare fully kicks in, look to Massachusetts now. The state's program for universal health care coverage is showing ominous strain as the effects of mandates and other requirements materialize.
The Boston Globe reports that rising costs of health care — which haven't been slowed by Massachusetts' reforms — are causing what appears to be a growing number of small businesses to drop coverage, steering employees into state-subsidized care.
There's not enough data to know how large the trend is and whether it will migrate from small companies to larger ones, but the implications are concerning. As more people see their employer-based coverage disappear and qualify for subsidized care, the more the state's finances will be stretched hard.
Gov. Deval Patrick and his administration are trying to stop insurance companies from raising premiums, but ultimately it's a losing game. As syndicated columnist Robert Samuelson writes, insurers are middlemen in the process, reflecting costs from providers. Stiffing them on premium increases curbs the incomes of doctors, hospitals and others. Those folks will push back, choices will become more limited and services scarcer.
That's Massachusetts. A similar picture looms over the national horizon with Obamacare, which is built on similar principles — mandated insurance coverage, government subsidies and almost nothing that curbs rising costs.
Just listen to President Obama. Already he's echoing Gov. Patrick with denunciations of insurance companies, who are an easy target. But it's fruitless sport. Insurers can be squeezed and demonized, but it only distracts from underlying factors driving costs higher.
"Obama dodged the tough issues in favor of grandstanding," Samuelson writes. "Imitating Patrick, he's already denouncing insurers' rates, as if that would solve the spending problem. What's occurring in Massachusetts is the plausible future: Unchecked health spending determines government priorities and inflates budget deficits and taxes, with small health gains."
Massachusetts is showing that eventually private companies will drop coverage because it's cheaper to pay fines to the government than try to keep up with rising costs reflected in insurance premiums. Obamacare has the same future, and, as private insurance disappears, Washington will face rising costs as people turn to public options.
Meanwhile, another consequence of Obamacare comes into focus, which is its role in the Obama administration's shift in the country's financial posture.
Columnist Charles Krauthammer writes that spending on stimulus and domestic priorities are building a structural deficit that won't be addressed by savings from entitlement reform — where real savings could be realized — because funds are being siphoned from them to help pay for the new health care entitlement.
Did someone say "value-added tax"?