T Nation

Another State Run Healthcare: FAIL


[i]Take it from a small population state. Maine is one of the oldest + poorest population states (and one of the most Liberal).

The State's "State Run Healthcare Program", one of the first in the country was supposed to take care of all of our 'healthcare problems' (ie the 'uninsured').

Instead, it's been one of the most expensive failures in state history, worthy of national attention from the Wall Street Journal.

Very much worth reading if you want a recent, real-life example of another failed socialized program. I speak from experience as a Maine taxpayer, and one who saved thousands of dollars in 'healthcare' costs by being employed out of state and having the option of 'competitive rates' instead of the monopoly created by the State's over regulation of how employers can insure workers. [/i]

No Maine Miracle Cure -- Another state 'public option' that failed.

Want a preview of ObamaCare in action? Sneak a look at what has happened in Maine. 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.

Here's how the program was supposed to work. Two government programs would cover the uninsured. First the legislature greatly expanded MaineCare, the state's Medicaid program. Today Maine families with incomes of up to $44,000 a year are eligible; 22% of the population is now in Medicaid, roughly twice the national average.

Then the state created a "public option" known as DirigoChoice. (Dirigo is the state motto, meaning "I Lead.") This plan would compete with private plans such as Blue Cross. To entice lower income Mainers to enroll, it offered taxpayer-subsidized premiums. The plan's original funding source was $50 million of federal stimulus money the state got in 2003. Over time, the plan was to be "paid for by savings in the health-care system." This is precisely the promise of ObamaCare. Maine saved by squeezing payments to hospitals and physicians.

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.

--- the rest of the article: http://online.wsj.com/article/SB10001424052970204619004574322401816501182.html


Great post Steely, common sense like this will get you nowhere LOL. Seriously, it amazes me that people will never learn from previous attempts (like the one Steely posted here) and have to actually give it a shot before they see that it fails.


Great post Steely, common sense like this will get you nowhere LOL. Seriously, it amazes me that people will never learn from previous attempts (like the one Steely posted here) and have to actually give it a shot before they see that it fails.


Thanks. Too bad no one who is pushing for ‘Universal Healthcare’ at any cost will read this article and try to understand the fundamental flaws in the system.

Of course, they will not learn from history.

What people have to realize is that the State has over-regulated how the insurance companies can insure the people. For example, they must insure pre-existing conditions, but can not tier the policies. What this has done is to drive out all insurance companies except one-- Anthem BC/BS who has to jack up their rates equally across the board. This makes it so Maine is almost 2-3 times more expensive for insurance than other New England states.

The law also forbids in state employers to seek out other insurances from other states. That is, the State has mandated that there can be no “free market competition”, thus creating inflated rates. But, then the State cries that ‘evil insurance’ companies are gouging the people with high rates. The State also taxes the Hell out of Anthem who promptly passes the increases to the customers…