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Commentary

Massachusetts will fail
Sally C. Pipes, USA Today, 4-9-06

Sally Pipes, president of the San Francisco–based Pacific Research Institute, takes issue with the Massachusetts mandate—arguing that it will lead to Canadian–style government run health care.

Massachusetts' health care plan won't lead to universal care through private insurance. It just might, however, give the Bay State government–run single–payer health care.

Individual health insurance is not always a good deal in Massachusetts, thanks to state–imposed community rating regulations that require companies to charge the sick and healthy the same rates. The result: Some people elect not to purchase it.

An innovative approach would deregulate the individual market and allow insurance companies to design policies that are attractive to the non–needy uninsured. In a blast from the past, Massachusetts law does just the opposite. It protects all existing government mandates and regulations while creating a bureaucracy to distribute new taxpayer subsidized insurance products that have no deductibles. This is the same health plan design threatening General Motors Corp.'s viability and bankrupted its suppliers.

The legislation will not control the true costs of these plans. It will set the premiums on a needs–based sliding scale. But the underlying costs will certainly be much, much higher. The average amount spent on health care in Massachusetts is $6,000 annually. The difference will be funded from taxes...

Starting in July 2007, residents must purchase a state–approved health care policy or they will be fined. This will be expensive to enforce. This mandate also is sure to fail to provide universal coverage. Although many states require the purchase of auto insurance, 14% of drivers are still on the road without insurance.

The end result of Massachusetts' "innovative" plan will be a total government takeover of health care. Individual mandates lead to groaning about price. At the same time, the true costs to the state will explode. This will build pressure for price controls. Having already erected a government apparatus to impose price controls, regulation and rationing, the state will again come to the rescue of those it stranded by imposing single-payer health care, or Medicaid, for all.

Pipes' point is that special interests will inevitably flock to the legislature to load insurance mandates on to individual health insurance coverage, driving up insurance premiums and tax–funded subsidies. Without a competitive national market for its residents to choose health insurance from, Massachusetts residents may be left with little real choice in insurance options, driving the plan to fiscal failure.



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