Here's How Obamacare Worked In Maine
Via the WSJ on a failed experiment in government health care:
In 2003, the state to great fanfare enacted its own version of universal health care. Democratic Governor John Baldacci signed the plan into law with a bevy of familiar promises. By 2009, it would cover all of Maine's approximately 128,000 uninsured citizens. System-wide controls on hospital and physician costs would hold down insurance premiums. There would be no tax increases. The program was going to provide insurance for everyone and save businesses and patients money at the same time.After five years, fiscal realities as brutal as the waves that crash along Maine's famous coastline have hit the insurance plan. The system that was supposed to save money has cost taxpayers $155 million and is still rising.
...The program flew off track fast. At its peak in 2006, only about 15,000 people had enrolled in the DirigoChoice program. That number has dropped to below 10,000, according to the state's own reporting. About two-thirds of those who enrolled already had insurance, which they dropped in favor of the public option and its subsidies. Instead of 128,000 uninsured in the program today, the actual number is just 3,400. Despite the giant expansions in Maine's Medicaid program and the new, subsidized public choice option, the number of uninsured in the state today is only slightly lower that in 2004 when the program began.
Why did this happen? Among the biggest reasons is a severe adverse selection problem: The sickest, most expensive patients crowded into DirigoChoice, unbalancing its insurance pool and raising costs. That made it unattractive for healthier and lower-risk enrollees. And as a result, few low-income Mainers have been able to afford the premiums, even at subsidized rates.
This problem was exacerbated because since the early 1990s Maine has required insurers to adhere to community rating and guaranteed issue, which requires that insurers cover anyone who applies, regardless of their health condition and at a uniform premium. These rules--which are in the Obama plan--have relentlessly driven up insurance costs in Maine, especially for healthy people.
The Maine Heritage Policy Center, which has tracked the plan closely, points out that largely because of these insurance rules, a healthy male in Maine who is 30 and single pays a monthly premium of $762 in the individual market; next door in New Hampshire he pays $222 a month. The Granite State doesn't have community rating and guaranteed issue.
Gah.
Politicians really know nothing about economics. These outcomes were entirely predictable.
Aren't the states a laboratory for the feds? Can't they see that what they now propose has already failed on smaller scale? How do they think it will work on a greater scale. It's as if they make it so big that it will survive on sheer inertia. And it will. So many people will invested in its existence that the country will have to go broke before the program is abolished.
Tyler at August 22, 2009 9:29 AM
The next-to-last sentence left out an important part. It should read,
a healthy male in Maine who is 30 and single pays a monthly
premium of $762 in the individual market; next door in New
Hampshire he pays $222 a month, if he can get coverage.
Ron at August 22, 2009 10:23 AM
Ron -
You miss the point. The healthy are being penalized to the tune of $540 a month so that the unhealthy don't have to pay full price.
brian at August 22, 2009 11:17 AM
There is a slogan in software engineering, too often ignored. "Any software that works, no matter how horrible, is better than software that doesn't work, no matter how theoretically beautiful."
Obama's plans are a collection of promises and wishful thinking, without any history or examples of success, to be implemented by a government which is noted for its expensive failures. People want better, cheaper healthcare. Why do they think the government is going to give it to them?
Current healthcare proposals should be called Wimpy Healthcare. "I'll gladly deliver savings in 2019 for $1 trillion today." (And, each year thereafter until national bankruptcy.)
As one example, it is astounding, amazing, that anyone believes that the government is a master of efficient administration, or will be, this time.
Medicare Myth: Low Administrative Cost
J._Wellington_Wimpy
//en.wikipedia.org/wiki/J._Wellington_Wimpy
"A recurring joke is Wimpy's attempts to con other patrons of the diner into buying him his lunch. Wimpy tries to outwit fellow patrons with convoluted logic. His famous line is "I'll gladly pay you Tuesday for a hamburger today"."
Show me the policy paper, or the cocktail napkin!
//easyopinionsoutlink.blogspot.com/2009/07/few-words-about-policy.html
Andrew_M_Garland at August 22, 2009 11:33 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/08/22/heres_how_obama.html#comment-1664327">comment from Andrew_M_Garlandpromises and wishful thinking
Exactly.
It's like when people tell me how great it would be if I did this stunt or that stunt for a video piece. As I know from my days as a producer, ideas are one thing - execution is everything. And often, what sounds like a good idea falls apart the minute you start putting it into action. Being a good producer means being able to identify that. I'm not seeing that in the proposal.
Amy Alkon at August 22, 2009 12:02 PM
"Show me the policy paper, or the cocktail napkin!"
Heh! Careful, a napkin *would* work.
Feebie at August 22, 2009 4:59 PM
This US healthcare debate is shaping up to be very interesting. I'm Canadian and while I acknowledge the problems in our health care system, I wouldn't give it up for anything.
One thing that never seems to pop up directly in the dialog about US healthcare is the implicit costs of the US tort system. In Canada, medical malpractice settlements are rarely over $200,000. It's a real big deal to get a $1million settlement. The tort system drives US health costs way way higher than it should be.
Personally, I or my family have not been let down by the Canadian system. The main problem in Canada, as far as I can determine, is that many hospital staff (nurses, orderlies, cooking staff, etc.) are unionized which contributes to a socialistic mood. Also, because the way the system is structured, more doctors graduated per year inevitably costs the provincial governments more since each additional doctor will start billing the taxpayer. The provincial governments don't like to graduate too many doctors in order to keep the lid on costs.
Unfortunatley, many Canadians overuse the system and have come to expect free, top quality care on demand. This worked out until the past 10 years or so, but new diagnostic tests and an aging population are straining the system.
Say what you like, but in Canada, people don't have to go bankrupt to get health care, especially for serious conditions like heart and cancer treatments, or chronic conditions like diabetes.
Things are changins and there is a demand for private services especially with MRI's and other diagnostics. Cosmetic surgury and dentistry is not covered by the Canadian medical system.
Gary at August 22, 2009 8:37 PM
Begging for Medical Care
The well-known actress Natasha Richardson was very unlucky. She hit her head in a minor ski fall. Montreal, Canada, does not have fast transportation to a full-service hospital, even near a ski area. Why not? Patients are a cost to the system.
The bureaucracy sees you as a cost, especially if you have already paid. All people and organizations seek income and avoid costs. Socialized or centralized healthcare is paid up-front and delivers services after the fact. How hard will a system work to earn the money that they have already been paid? This is something that everyone can understand in his gut. A customer is lost without competition for his dollar.
As Gary said above, "The provincial governments in Canada don't like to graduate too many doctors in order to keep the lid on costs." The bureaucracy will ration anything and everything. The public will stand in line and die.
Now we know why US federal workers are exempt from healthcare reform. Your personal bureaucrat will be able to make decisions about you without affecting his own, privately provided, generous healthcare privileges.
Andrew_M_Garland at August 22, 2009 9:04 PM
No, instead the whole country goes bankrupt instead.
Which is so much better.
brian at August 23, 2009 8:08 AM
People would go crazy if our Freeways were rationed like their Healthcare could be, HC reform and Cap and Trade are simply power grabs by a Government that thinks it knows best what is good for you. We should just change our name to Canamerica and just get used to having your life run by a bureaucrat.
jksisco at August 23, 2009 10:00 AM
"The healthy are being penalized to the tune of $540 a month
so that the unhealthy don't have to pay full price."
No, the healthy are being penalized $540 a month so that if
they should suffer a medical problem, the insurance companies
won't drop them like a hot potato. A system that lets you pay
a low price as long as you remain healthy is like buying car
insurance from a company that cancels anyone who has an accident
or gets a ticket.
The savings you're seeing on health insurance premiums could
turn out to be a seriously poor bargain if you develop cancer and
lose your job and then can't find any insurance to continue your
coverage with.
The added premiums you're paying can be compared to the
"guaranteed insurability rider" that's currently offered to
people who buy life insurance policies.
Ron at August 23, 2009 11:25 AM
Ron, you know what I was making fresh out of college? $30k. And I was paying for half of the $3600 a year HMO.
I could have really used that additional $3600 a year to get out of debt a little sooner. As it is, it took me 12 years to pay off my student loans.
And the shit of it is I almost never got sick, but half the women in the office had babies, which are expensive little things to have. So my insurance went up to cover them.
Last I checked, I can't have a baby, yet I was paying for coverage for all sorts of baby-related things. As a single man!
Perhaps you think it's fairer that old people don't see their premiums go up?
Very common practice in the auto insurance industry, at least in compulsory states, is after you get two tickets you're in "assigned risk" which is 3-10 times the cost for premiums. The only reason for this is that they are forbidden by law from terminating you because CT is a compulsory insurance state.
And with cops handing out tickets like water because the state's out of cash, the insurance industry stands to make a killing because once you're in Assigned Risk, you need a clean license for 3 or more years (depending on the carrier) to get back to standard insurance.
In other words, don't make a mistake or you're pretty well fucked.
brian at August 23, 2009 12:13 PM
> I almost never got sick
Again, probabilities versus outcomes.
Crid [CridComment @ gmail] at August 23, 2009 12:27 PM
In a truly free society, neither of those would be your concern.
But our society, taken over by bleeding hearts, has MADE it your concern. And I object.
Whatever happened to "keep your laws off my body"?
Or does that only apply to the interior of a womb?
brian at August 23, 2009 12:43 PM
> And I object
No you don't. You love it. You're going to treated whether you pay for the treatment or not.
> Whatever happened to "keep your
> laws off my body"?
It was rejected by folks like you, who insist that emergency rooms take all comers.
Crid [CridComment @ gmail] at August 23, 2009 3:10 PM
I never insisted upon any such thing. And I wouldn't.
brian at August 23, 2009 6:38 PM
Ya know, the variety of comments shows a deep level of emotion with this issue. The emotion to me seems unfocussed but shows a big apprehension related to issues of personal choice and personal well being.
Living in the Canadian system all my adult life, I can assure commenters that Canada isn't going "bankrupt". In fact, we're in very, very good shape up here.
Emergencies are handled generally very well and I think the system gets it right most of the time in prioritizing real trouble from ongoing chronic problems.
If our system wasn't generally very good, Canadians, super pamper lot that we are, would object and throw out the current government pretty quick. Voters realize the problem is complex. We know that a lot of folks in the US have to restrict their life choices because of the cost of uninsured medical care and the disasterous financial consequences of getting caught without adequate insurance. Decisions about leaving a job, getting a divorce, retirement, etc, etc, are often influenced by health cost concerns.
Another thing. Doctors in the States seem to make HUGE money. I don't begrudge doctors being in business for themselves and most of our Canadian doctors have an envy for the US system. For those commenters worried about bureaucrats running things, the HMO's in the US seem to be pretty controlling about what procedures get convered and which ones don't.
A big problem in Canada is that low population density areas are quite underserviced. Large cities like Toronto have world-class doctors and are at the forefront of care and research. In smaller centers, it is hard to attract good doctors because the cultural attractions are mediocre.
The Canadian system seems to be moving towards 2 tier like England where folks can get private or public care. A lot of Canadians don't like 2 tier because they believe that doctors will not work in the public sector if they can make morre money in private and that the rich will get better care than the average. This deeply bugs a lot of people up here.
gary at August 23, 2009 8:32 PM
Then please explain why we keep hearing stories of hospitals being shut down for lack of funding. Also, please expound upon the routine use of US hospitals for overflow. At the very least, your system appears to suffer from serious infrastructure neglect. If that continues, you'll end up like England, where patients have to clean their own rooms.
Doesn't appear to be a problem here. In fact your country had to send a pregnant woman to Montana (one of our lowest-density states) to deliver her quadruplets for lack of adequate NICU beds.
And this is the core of socialism that leads to so much death and suffering.
brian at August 23, 2009 9:08 PM
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