Harbingers of the Obamacare spending blowout
The Kansas City Star
The structure of Obamacare was based on a plan adopted earlier in Massachusetts by then-Gov. Mitt Romney, and the fiscal agonies of that state may be providing the rest of the country a preview of what to expect when Obamacare is fully implemented.
Thanks in large part to the state’s rising health care costs, Gov. Deval Patrick is seeking an increase in the state income tax, as well as higher business taxes, fuel taxes, turnpike tolls and car taxes.
The Wall Street Journal editorial page argues that health care spending has crowded out spending for essentials like education, transportation and public safety. Health spending was about a quarter of the state budget six years ago. Now it’s over 40 percent. The state has already imposed price controls and a spending cap.
As for Obamacare, already there are clear signs that things aren’t working out quite as planned. People remember that the idea was sold as a way to “bend the cost curve down,” but costs aren’t cooperating much. In many states, health insurance premiums are rising rapidly.
Obamacare was also supposed to encourage innovations that would lower costs, one of which was digital health records. But The New York Times reported recently on a Rand study that found the conversion to digital, so far, has failed to reap the anticipated savings, once estimated at $81 billion a year.
As the story noted, “…evidence of significant savings is scant, and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services.”
The real spending deluge is likely to come when (if) the state exchanges begin operating and start doling out subsidies for policies. Estimates for how many people will leave employer-provided insurance and migrate to the exchanges are all over the map. If the actual number is much higher than expected, costs will skyrocket — as will costs to the Treasury.