During the debate on Obamacare, Republicans relentlessly tried to explain that offering a government subsidized healthcare plan would eventually lead to employers dropping private healthcare coverage for their employees because, well…they can just sign up for the federally subsidized plan.  Democrats in Congress denied this, of course, and the White House charged that this scenario was just another Republican scare tactic.


Well, it appears that very scenario is playing out in Massachusetts-the great American experiment in government-provided healthcare.  The Boston Globe explains


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.

Since April 1, the date many insurance contracts are renewed for small businesses, the owners of about 90 small companies terminated their insurance plans with Braintree-based broker Jeff Rich and indicated in a follow-up survey that they were relying on publicly-funded insurance for their employees.


…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. 


Robert Samuelson discusses the quagmire that is the Massachusetts healthcare system in a thoughtful (and by thoughtful, I mean I’m now full of depressing thoughts) op-ed in today’s Washington Post.  After detailing the bare-knuckle fights officials in Massachusetts have had in order to control healthcare costs, (a fight that largely has been lost), Samuelson warns that the same cost control measure that failed there will fail on the federal level: 


Similar forces will define Obamacare. Even if its modest measures to restrain costs succeed — which seems unlikely — the effect on overall spending would be slight. The system’s fundamental incentives won’t change. The lesson from Massachusetts is that genuine cost control is avoided because it’s so politically difficult. It means curbing the incomes of doctors, hospitals and other providers. They object. To encourage “accountable care organizations” would limit consumer choice of doctors and hospitals. That’s unpopular. Spending restrictions, whether imposed by regulation or “global payments,” raise the specter of essential care denied. Also unpopular.  

Obama dodged the tough issues in favor of grandstanding. Imitating Patrick, he’s already denouncing insurers’ rates, as if that would solve the spending problem. What’s occurring in Massachusetts is the plausible future: Unchecked health spending shapes government priorities and inflates budget deficits and taxes, with small health gains. And they call this “reform”?