The Romneycare Counterfactual

by Reihan Salam

Len Burman tries to think through what might have happened had a Republican president, in this case Mitt Romney, had led a coverage expansion effort in 2009. For the most, Burman is advancing the notion that “Romneycare” is identical to Obamacre. Yet he quickly undermines his own point:

Democrats might complain that many of the affordable health insurance plans have high deductibles that could create significant hardships for middle-income families if they get sick. The Republicans would remind us that high deductibles help constrain medical spending by making health insurance consumers cost conscious. (In the alternative reality that is Obamacare, Republicans bemoan the high deductibles and the Democrats mostly remain silent.)

Though I’m sure that some Republicans bemoan the high deductibles, I haven’t encountered this objection from conservative critics, most of whom are concerned that tight restrictions on essential health benefits and actuarial values have greatly limited the scope of catastrophic coverage under the health law.

Democrats, chafing under Romneycare would hate the individual mandate and the burden it puts on middle-class workers unlucky enough to work for an employer that doesn’t provide health insurance. Republicans would call it individual responsibility; people should be discouraged from eschewing insurance only to put the burden of paying for their care on others when they get sick. Conservative think tanks would point out that the mandate is the lynchpin of any free market solution.

Avik Roy has more on the intellectual history of the individual mandate. It is important to recall that it was never close to universally accepted on the right, and that the concept devised by the Heritage Foundation was for an individual mandate for the purchase of low-cost catastrophic coverage, and the penalty for not purchasing coverage would be the loss of various tax breaks.

Republicans might not have included the employer mandate—they are more hesitant to put new burdens on businesses—but Obama suspended the mandate for a year and it’s likely an area where the two parties might find common ground if they were on speaking terms. Unions would howl in protest that, without a mandate, employer-sponsored insurance might go the way of the dodo bird. Republicans would say “good riddance.” Companies should focus on producing better products and services and leave health insurance administration to others.

The surtaxes on those with high incomes probably wouldn’t be in Romneycare. President Bush’s historic expansion of Medicare to cover prescription drugs mostly borrowed to cover the cost.

So a key difference is that Republicans really hate the new taxes. As is often the case, what seems to be a fight about spending is really much about taxes.

This analysis has some surface plausibility, yet it is unlikely that Republican lawmakers would be so glib about the unraveling of employer-sponsored insurance, as evidenced by the reluctance of Republicans to embrace the universal tax credit approach to health reform backed by Sen. John McCain in his 2008 presidential campaign, or the closely related Ryan-Coburn Patients’ Choice Act. 

But another difference is that absent a landslide victory in Congress, President Romney would have needed a significant number of votes from Democrats to pass health reform since many Republicans don’t believe the federal government should be in the health insurance business. A bipartisan bill would surely have muted Democratic criticism.

The bottom line is that the main problem many Republicans have with the Affordable Care Act is that it is Obamacare rather than Romneycare. (Well, actually, it is Romneycare.) They’re not invested in the law since it passed with only Democratic votes. And they really hate the taxes.

This is where Burman’s analysis starts to strain credulity. Given the financial panic and the sharp economic contraction, is it plausible that a President Romney would have pressed for coverage expansion on the strength of Democratic votes? The number of Republicans who “don’t believe the federal government should be in the health insurance business” is the reason why the notion that conservatives would have welcomed an Obamacare-like proposal had it been introduced by a Republican president is untenable. This is one of the chief barriers to conservative health-system reform ideas that bear even a faint resemblance to Romneycare and Obamacare – regulated state-based exchanges of some kind, some use of income-related subsidies. One of the commenters on Burman’s post (who goes by the Nabokovian name ”Vivian Darkbloom”) offers an effective critique of President Obama’s first term priorities.