ARCHAMBAULT: Massachusetts model mismatch

More states should have experimented before Washington imposed a health care plan

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Massachusetts’ Democratic Gov. Deval Patrick was in Washington this week to deliver remarks at the left-leaning Center for American Progress to mark the fifth anniversary of Massachusetts’ health care reform. This is the latest public-relations effort by liberals to justify Obamacare.

However, their problem is that the national health law suffers from an inherent flaw: Massachusetts is not Texas. President Obama and congressional Democrats’ overhaul is based on the assumption that you can take the experiment of a state that comprises just 2 percent of the country’s population and impose it on the rest of the nation.

The federal government’s overreliance on the Massachusetts model is myopic and dangerous in three ways.

First, the Massachusetts experience is unique. Before reform, fewer than 10 percent of Massachusetts’ residents were uninsured. By contrast, in states such as Texas, New Mexico and Arizona, more than 20 percent of residents lack insurance.

Second, there is weak support in the states for the new federal law. Before the 2010 federal health care expansion, the last contentious entitlement debate was on welfare reform. The two experiences could not have been more different.

Welfare reform was 20 years in the making, built on more than a dozen waivers of federal rules in the 1980s so states could experiment. By the mid-1990s, policymakers had drawn lessons from many states. It was pretty clear what was working - and what wasn’t. Passage of the federal reform was contentious in Washington, but in the states, the debate already had been won. There, welfare reform was a fait accompli, whether President Clinton signed it or not.

In contrast, the health care debate centered on the experiment of the only state with the goal of virtual universal coverage, in which clear data were not available on important outcomes such as long-term costs, administrative expenses, cost-effectiveness of quality gains or crowd-out impacts.

Third, the real price tag of the new federal law is unknown. It doesn’t much matter what an academic exercise from the Congressional Budget Office estimates; experience teaches us that the charge will easily dwarf any past entitlement expansion.

Massachusetts also had a sizable pot of money already dedicated to hospitals and providers that could be redirected toward subsidies to provide the poor with more mainstream health care options. The federal bill lacked this resource and, as a result, increased taxes and cut from Medicare to help finance the bill.

The Massachusetts experiment has indeed brought the uninsured rate down to a handful of percentage points. But there are big holes that, magnified at the federal level, will prove disastrous. The Massachusetts reform has not provided small-business employers with expanded insurance options or cost relief. These failures have led to desperate attempts to put a finger in the dike, such as Mr. Patrick’s “premium freezes” and calls from the legislature to impose large “one-time donations” from nonprofit hospitals to help small businesses.

The experience offers a lesson in how major reforms are best moved forward in this country: We need to respect the federalist imperative by which states experiment, then the federal government acts as a popularly elected judge of what works and what doesn’t.

This was not the model used for the federal health care law. Instead, it was an exercise in hubris, drawing lessons from a highly insured, high-income, health-care-infrastructure-rich state that accounts for 2 percent of the nation’s population. The president and Mr. Patrick want you to think Massachusetts and Texas are apples to compare, because that is the only rationale that would justify signing Obamacare, but common sense says otherwise.

Joshua Archambault is the director of health care policy at the Pioneer Institute.

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