The Problem with Romneycare
Obamacare depends on the individual mandate. Romneycare has demonstrated empirically that it doesn't work.


Stephen Spruiell

Former Massachusetts governor Mitt Romney must be tired of answering questions about his position on Obamacare, yet questions remain. We know he’s against it, but how does he square his opposition to it with his support for a similar plan in Massachusetts? His answer — what’s good for the states is not always good for the country — looks increasingly weak now that flaws in the Massachusetts model are coming to light. And yesterday, the Heritage Foundation’s Robert Moffit, an erstwhile supporter of the Massachusetts plan, declared in a Washington Post op-ed that Heritage’s support for the individual mandate, a central feature of both Romney’s plan and Obama’s, was mistaken. “Our research . . . has led us to realize our initial idea was operationally ineffective and legally defective,” Moffit wrote. “Well before Obama was elected, we dropped it.”

Moffit wrote that he first noted problems with the individual mandate in a Spring 2008 paper he published in the Harvard Health Policy Review. He did not officially renounce his past support for the Massachusetts plan, but he did use Massachusetts as an example of how the individual mandate fails to achieve its intended purpose. The problem with the mandate is that it has to be enforced — an idea that is unpopular and that few politicians are willing to see through. “In Massachusetts,” Moffit wrote, “the first state to enact an individual mandate with tax penalties and fines, the public authorities have already exempted approximately 60,000 persons from its terms.”

Consequently, the Massachusetts system experiences severe and debilitating “churn,” as those exempted individuals (and others who simply choose to pay the fine) sign up for health insurance a few weeks before they need a major procedure and then drop it after a few months. The Boston Globe reported that “In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan.” Enforcement of the individual mandate “didn’t work as planned,” the Globe reported, and “consumers who work for small businesses have ended up shouldering a much larger burden.”

Romney’s successor, Gov. Deval Patrick, has announced a few tweaks here and there to address this problem, but nothing like the kind of enforcement that would be required to make the system work. That’s because, as Moffit noted in his Harvard esssay, “Politically, the pursuit of an individual mandate would require an insistence on a level of public coercion by unspecified means that does not yet enjoy anything close to a public consensus.” The enforcement mechanisms in Obamacare also vindicate Moffit’s view: The penalty for evading its individual mandate is relatively small; its constitutionality is suspect; and it might not even be enforceable.

I spoke with Moffit on the phone after the publication of his op-ed, and I asked him to elaborate on his observations about the individual mandate, particularly in the light of the problems Massachusetts has experienced. Moffit says that Romneycare was addressing a real problem — the nearly $50 billion in annual uncompensated-care costs that accumulate as a result of free emergency-room care for the uninsured — but that it has proved to be a “mixed bag.” Romneycare “reduced the uncompensated-care costs for hospitals,” he says, but Romney’s successor has failed to cut uncompensated-care subsidies. “Even though hospitals’ uncompensated-care costs went down, Patrick continued to funnel taxpayers’ money to them anyway,” Moffit says.