The Obamacare Disaster Has Arrived

Get ready for much worse.


For a sense of where the health care policy debate in America is headed, look no further than Massachusetts, where Romneycare was a state-run demonstration project for Obamacare.

Here, activists with ties to the Massachusetts State Nurses Association are organizing to place a question on the 2014 ballot. The "Act to Limit Excessive Hospital Operating Margins and CEO Compensation Through Greater Financial Transparency" would impose a tax on any hospital "whose patient mix is less than 60% government payer" and whose annual operating margin is greater than 8 percent.

It would also impose a civil penalty on any hospital that pays its CEO more than 100 times what the lowest-paid employee of the hospital makes.

Behold, the future of the American health care sector. If you derive more than 40 percent of your revenues from non-governmental sources, you become a target for confiscatory taxation — under the wording of the ballot question, the penalty for a margin of better than 8 percent would be equal to the entire amount in excess of 8 percent. If an institution manages to operate with a profit or surplus, the government will take away all of it once it gets above the government-approved level.

Hard to believe? Sound like something out of an Ayn Rand novel?

Well, it would have been hard to believe a president of the United States turning himself into an insurance salesman, reciting an 800-number and announcing that operators were standing by: "The prices are good…it is a good deal."
Yet that is what happened Monday, as President Obama went on television to try to get more Americans to buy the health insurance he is offering.

Obama was hailed after the 2012 election for the technical savvy of his campaign team, which reportedly spent about $11.3 million on technology. Yet Healthcare.gov, which reportedly cost taxpayers about $634 million, doesn't work properly, as Obama himself conceded in his televised remarks.

ProPublica, the non-profit news organization, described the Obamacare Web site problems as "inexplicable."

The Wall Street Journal's Farhad Majoo took at a stab at it, observing, "any company looking to work with the government must navigate an obstacle course of niggling, outdated regulations and arbitrary-seeming requirements….The process locks out all but a tiny handful of full-time contractors—companies who also happen to be big federal lobbyists. (Note how  CGI Group Inc., which won the largest contract to build Healthcare.gov, lobbied on behalf of the health-care law.)"

The idea of spending $600 million on a big government Web site is an example of the arrogance of central planning inherent in the health care law. Obama compared the price of health insurance to that of cable television or a cellular phone. Yet somehow, Americans manage to compare cellular phone providers and television providers without a $634 million government-built Web site to help them.

The arrogance of central planning is on display not only in the construction of the Obamacare Web site, but in the design of the benefits. The president bragged that "preventive care" like mammograms and birth control are free. But what about people who aren't trying to avoid getting pregnant, but who are trying to have children? Or people whose preventive care needs dictate regular MRI scans, not just the old-technology mammograms? There's a kind of one-size-fits all, top-down, big-government-knows best approach to the entire enterprise.

Maybe Obama will succeed in turning his signature program around. The real risk, though, isn't the Obamacare web site. It's the danger that by the time Obama is done, the American whole health care system — your pacemaker, your hospital, the drug development pipeline — is going to be a healthcare.gov-scale expensive disaster.