As the statesman and philosopher Sir Edmund Burke once said: “Those who do not know history are destined to repeat it.” This quote speaks volumes when putting into perspective the current fiasco of the attempted health care reform in Massachusetts and past health care reform efforts in Tennessee.

As for spectacular flops, it’s hard to do worse than Tennessee. Volunteer State’s first attempt to dramatically increase health insurance coverage, dubbed TennCare, got off to a promising start, says Peter Suderman, associate editor of the Reason Foundation.

· In 1994, the first year of operation, the system added half a million new individuals to its registers.

Premiums were cheap — just $2.74 a month for people just above the poverty line — and liberal policy pundits loved it.

The Urban Institute, for example, gave it high marks for “improving health coverage for uninsurable or high-risk individuals with very limited access to private health insurance coverage.”

· At its peak, the program covered 1.4 million people, nearly a quarter of the state’s population and more than any other state Medicaid program, leaving only 6 percent of the state’s population uninsured.

But those benefits came at a high price, says Suderman. By 2001, system costs were growing faster than the state budget. The drive to increase coverage had not been matched by the drive to control costs. Vivian Riefberg, a partner at consulting firm McKinsey & Company, described it as “almost across the board, with no limits on the scope and duration of coverage.” Spending on drug coverage, in particular, had spiraled out of control:

· The state led the nation in prescription drug use, and the program placed no limit on the number of prescription drugs a patient could receive.

The result was that, in 2004, TennCare drug benefits cost the state more than its entire higher education program.

· Meanwhile, in 1998, the program was opened to people twice the poverty level, even if they had access to employer-provided insurance.

In other words, the costs of the insurance program were neither controlled nor sustainable, says Suderman:

· By 2004, the budget had jumped from $2.6 billion to $6.9 billion and represented a quarter of the state’s appropriations.

A McKinsey report projected that program costs could reach $12.8 billion by 2008, consuming 36 percent of state appropriations and 91 percent of new state tax revenue.

Source: Peter Suderman, “The History of Health Care Fiscal Madness; Health Coverage Expansion Destroyed State Budgets. Will It Destroy the Federal Budget Too?” Wall Street Journal, April 23, 2010.

Health insurance companies are taking advantage of you and you are allowing it to happen. 92% of Americans pay 30-40% higher health insurance premiums than necessary. The highest health insurance premiums equate to an average of $2,208.44/year.