MassCare eats away at the economy in the Bay State

There were two articles in the Boston Globe of special interest for those who want to see how the Massachusetts health care reform will play out when extended nationwide. First, small businesses are getting socked with double-digit increases in insurance rates: "Small businesses bridle at health insurance hikes"

At a time when both the state and the nation are struggling to rein in health care costs, many small businesses in Massachusetts say they’re receiving the largest premium increases in years for their Jan. 1 renewals. Insurers in September said they expect to raise premiums an average of 10 percent next year, but some employers are facing increases that are double or triple that - or even higher.

What does this mean? Surprise surprise, small businesses are not going to hire more workers and/or they're passing the increased cost on to current employees:

According to Blue Cross, the majority of its customers have been redesigning their plans through "buydowns," which use higher deductibles and other features to shift more of the cost to employees.

And here it comes:

"The main driver in insurance premiums is the cost of health care," Maltz said. Another factor, he said, is the state universal health care law, which has compelled insurers to merge newly insured individuals - a high-cost group - into small-business insurance plans.

When Americans are compelled to purchase health insurance to comply with a federal plan, the insurance companies will face the same problem on a national scale. Somebody will have to pay and it's going to be you, in the forms of higher insurance rates, taxes, and borrowing.

If we now flip over to the business section of today's Globe, we find this troubling news: "Downturn isn't over yet for Bay State – Latest numbers change predictions for Massachusetts"

As a result, it now appears the state will lag behind the national rebound by three or four months, according to a recent forecast by the New England Economic Partnership, a nonprofit research group.

Cause and effect.