Kevin Price
In Massachusetts, "Obama style" care is leading to firms canceling coverage
By Kevin Price
August 31, 2010

One of the major ideas behind Obamacare and Romneycare (the Massachusetts government controlled health care program) is to force people to be responsible and get coverage of their own. The methodologies of both programs may actually having the opposite effect. The reason for this is that governments typically do not understand human nature. They do not understand that if a person is attacked, they will either "fight" or "take flight." The great economist Thomas Sowell once asked in a Forbes Magazine column, "are we like trees?" The answer is clearly "no." Unlike wood that will take the blows, we humans (and our businesses) respond according to the attack.

I recently heard syndicated talk show host, Clark Howard, talk about how the city of Washington, DC has passed a tax charging 5 cents for plastic bags you use to get for free from stores, as an environmental measure. What kind of impact did it have? Well, retailers in DC are nothing short of shocked as the usage of such bags was cut in half in just a matter of weeks and that percentage continues to shrink. Money matters in our decision making.

It is being reported that, in Massachusetts, new mandates, few reforms that actually contribute to lowering costs, and artificially high demand created by the government requiring people to have health insurance, have led to a massive increase in health insurance costs in that state. Instead of containing costs — a "promise" offered both by Obama and Massachusetts reform advocates, there has been a huge increase, which is prompting many small companies in the Bay State to drop coverage for their workers. Those businesses are also encouraging those employees to sign up for state-subsidized care instead. This promises to put an enormous strain on a state that already has a budget crisis, according to the Boston Globe.

Since the state's socialized health care program went into effect a few years ago, insurance brokers have noted a significant increase in the number of terminations among smaller firms. Companies that have seen the biggest jump are restaurants, hair salons, stores, and day-care centers. These same firms are known for their low wages and for having employees that easily qualify for the state's subsidized insurance program.

The 2006 health insurance "reform" included new regulations meant to discourage low wage employees from pursuing state insurance instead of the firm they work for, more pricey plans. For example, Massachusetts made individuals ineligible for state plans if they had been offered private coverage that paid for 33 percent or more of an insurance plan in the six months before they applied. In spite of the prohibition, some firms have let employee plans go in order to test the state's response and their employees were still able to get state coverage. To make matters worse for the state's health care program, it is much less expensive for businesses to merely pay the state's penalties (approximately $295 per employee, per year) than it is to pay thousands in health insurance premiums. $295 does little to pay for the huge cost of the state's health care program. Since the Massachusetts law requires people to have coverage — the least expensive to individuals, but most harmful to the state's fiscal integrity — will naturally become a natural favorite to many. This is just one more example of how public policy that fails to recognize human nature will naturally fail. This failure in policy is only fostering more fiscal ruin and could provide a window into the future problems we will face nationally from Obamacare.

© Kevin Price


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Kevin Price

Kevin Price is Publisher and Editor in Chief of

His background is eclectic and includes years of experience in both business and public policy, as well as two decades of experience in broadcast journalism. He was an aide to U.S. Senator Gordon Humphrey (R-NH) and later went on to work in policy areas with some of the nation's leading think tanks including the National Center for Public Policy Research and was part of the Heritage Foundation's Annual Guide to Public Policy Experts... (more)


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