We learned last week that a solar eclipse is a rare but beautiful convergence of heavenly bodies. When we have here is a rare but ugly convergence of past and future that has deep implications for the 2012 election.
The Boston Globe is reporting that:
The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budget.
The trend is admittedly not clear and government officials say in effect don’t worry about it:
State officials said they have not seen convincing evidence that there is a trend. There has not been an unusually large spike in enrollment in Commonwealth Care, the subsidized insurance program, according to spokesman Richard Powers. And in any case, Dr. JudyAnn Bigby, secretary of health and human services, said the administration budgeted for higher health care spending because it anticipated that there would be growing numbers of long-term unemployed residents who would be signing up for coverage.
The Massachusetts Division of Health Care Finance and Policy annually surveys employers and found no significant drop in coverage as of the end of 2009, when more than three-quarters of companies offered health insurance.
But others say there is a major problem:
But insurance brokers say the pace of terminations has picked up considerably since then among small companies, of which there are thousands in Massachusetts. Many of these companies — restaurants, day-care centers, hair salons, and retail shops — typically pay such low wages that their workers qualify for state-subsidized health insurance when their employers drop their plans.
“Those employers are trying to keep their doors open, and to the extent they can cut expenses, they will cut health insurance because they know their people can go to Commonwealth Care,’’ said Mark Gaunya, president of the Massachusetts Association of Health Underwriters, a trade group representing more than 1,000 brokers and other insurance professionals.
Who do YOU believe, Sanders? I usually go with the private sector in this sort of spitting contest. But the potential is ominous. Obamacare and Commonwealth Care both have similar features. Don’t take my word for it – try cnn.money.com here:
The best guide to how President Obama’s historic health-care legislation will reshape the nation’s medical marketplace and fiscal future is the pioneering model in Massachusetts. The Bay State’s reform program started in late 2006, and it shares virtually all the major features of the new federal plan.
OOPS! The five warnings that CNN Money give for Obama/Commonwealth Care are:
1. It won’t control costs.
A report from that state attorney general in March — remember, this is a Democratic administration — asked rhetorically “Can we expect the existing health-care market in Massachusetts to successfully contain health-care costs?” The report concluded, “To date, the answer is an unequivocal ‘no.’”
2. Not only that but mandated acceptance of everybody regardless of condition raises costs:
How did costs in Massachusetts get so big to begin with? A major reason is the adoption of guaranteed issue and community rating in the mid-1990s. The new federal bill would expand those rules to the entire nation. Under guaranteed issue, insurers must accept all enrollees regardless of their medical condition; under community rating, they must charge all customers similar premiums, even if their costs are far different. The result is that prices rise steeply for young, healthy customers, who must pay far more than their actual costs. It also give them a strong incentive to drop insurance; then they can “game the system” by signing up any time they need surgery or get diabetes. * * *
In the federal bill, the fines for going uninsured are even lower than in Massachusetts — and anyone who can’t find an inexpensive plan is exempted from all penalties. Hence the “adverse selection” problem could prove far worse.
OOPS! Who wrote this bill? Ted Kennedy? Nope.
3. The subsidies to lower and middle class earners are expensive:
The big problem arises if far more people sign up for these exchange-offered plans than anticipated. That’s been the case in Massachusetts. And as we’ll see in a moment, it could still get a lot worse there. A potential disaster threatens the federal plan if employers staring dropping coverage, since a flood of newcomers would rush into the state-funded pools.
Is this Katrina or health care? Maybe both. Who wrote this thing? Martha Coakley? Nope.
4. There are incentives to not earn more than certain amounts – or cheat on income!
The federal bill is plagued by the same weakness. For example, a $55,000 earner contributes $4,400 a year towards insurance. At $65,000, the bill is $6300; so the family is paying a “tax” of $1,900 or 19% on that $10,000 raise. After payroll taxes, those Americans would face a marginal rate of around 35%, a number that’s heretofore been the territory strictly for high-earners.
Cheating on income in small areas will get worse. So who, Sanders, came up with this? Deval Patrick? Nope.
5. There is also an incentive (which we have already seen in the Boston Globe above) to drop employees:
Employees can only move into Commonwealth Care if their employers drop their plans. The danger is that the incentives are tilting in that direction as the costs of coverage for employer, and the price of premiums to employees, keep climbing. The point is rapidly approaching where both will pocket big savings if employers drop their plans and workers buy their policies through the heavily subsidized exchanges.
So, Sandy, tell us – What LIBERAL DEMOCRAT thought up this first cousin to Obamacare? Here’s the answer from another conservative daily like the Boston Globe and CNN, The New York Times:
To make it happen, Democratic lawmakers and Gov. Mitt Romney, a Republican, made an expedient choice, deferring until another day any serious effort to control the state’s runaway health costs.
It is our 2012 frontrunner, establishment candidate former Governor Mitt Romney! And the GOP will nominate him to run for President? Thanks but no thanks. What could Romney say? I’ll sign the repeal of Obamacare? The President would cheerfully run a zillion dollars worth of TV ads saying he’d have to repeal HIS OWN plan! It’s like the TARP bailout – we have no place to go with McCain agreed with Obama it was needed. I say no to Obamacare and Romneycare as I vote for Ron Paul instead in the primary. Even Sarah Palin would get my vote over Mitt Romney. I don’t even think Romney will be in the race when the first votes are counted.