Romney vs. Obamacare
From the February 6, 2012, issue of NR.


Yuval Levin

At some point in this year’s presidential campaign, perhaps on a debate stage, President Obama is likely to repeat his claim that the Massachusetts health-care law signed by Gov. Mitt Romney in 2006 was the inspiration for the federal health-care plan that he himself signed in 2010. Obama knows that his signature legislative accomplishment remains unpopular. But he also knows that policy experts of various political stripes have claimed that Obamacare is essentially Romneycare taken national. If Romney is the Republican presidential nominee, as he seems likely to be, Obama will try to block him from taking advantage of his vulnerability.

Romney will be able to answer Obama effectively only if he has already vigorously made the case against Obamacare by then: both so that he has the argument clear in his mind, and so that Republican politicians, reporters, and voters are at least passingly familiar with it.

Romney may be tempted to preemptively disarm himself by keeping quiet about Obamacare, or by merely saying, perfunctorily and when asked, that he favors its repeal but not making the case against it. But silence, or a muted critique of Obamacare, would be a mistake for several reasons. It would undermine the ability of a President Romney to govern successfully on health care. It would leave a key Obama weakness unexploited: The averages of polls at show not only that Obamacare is unpopular but that it has been getting more so over the last 18 months. Obamacare is also the most powerful symbol of the administration’s most controversial characteristic: its drive to expand the federal government. A critique of Obama’s record that ignores his health-care plan would have a hole at its center. No other domestic-policy issue in the 2012 campaign exceeds this one in importance. (And this will continue to be the case unless the Supreme Court voids the entire law.)

Governor Romney has at times attempted to argue that the chief problem with the federal law is that it imposes a sweeping one-size-fits-all model for the health-care system on the entire nation and prevents the type of state-by-state experimentation that could yield solutions that are better, and better fitted to local circumstances. This critique of Obamacare, though it contains a lot of truth, is both substantively and politically inadequate. The political inadequacy comes into relief when one looks at Obamacare’s least popular feature, its requirement that all Americans buy insurance policies that meet the federal government’s approval. Romney can rightly say that this requirement, when imposed at the federal level, raises constitutional issues that a state requirement does not. But much of the opposition to the mandate rests on hostility to being ordered around unnecessarily by any level of government, and Romney, alas, cannot align himself with that sentiment.

If Romney really is disarmed in taking on some particular aspects of Obamacare, however, he does have available to him good arguments against the legislation as a whole. The substantive inadequacy of Romney’s federalist critique of Obamacare actually points to these arguments.

The truth is that most of the dysfunctions in our health-care system are the result of gravely flawed federal policies, and so long as those policies remain in place, no amount of experimentation by state governments can create a transparent, efficient, or patient-centered system. Federal policy strongly encourages third-party provision of health insurance, and penalizes its purchase by individuals, in two ways: It subsidizes employer-provided coverage through the tax code; and it grants states the authority to establish regulatory fiefdoms over individually purchased insurance, thus preventing the emergence of a national market. Thanks to these policies, individuals rarely own their insurance policies and rarely even know their true cost; nor do they often know the costs of medical services, or have much incentive to choose lower-cost options. Thus, costs spiral out of control.

The arbitrary price schedule of Medicare distorts the entire medical marketplace even more severely, because the program is such an immense purchaser. By promoting fee-for-service as the dominant model of medicine — instead of making it compete with other models — it also rewards doctors and hospitals for increasing the number of treatments they provide rather than their effectiveness. This growth in volume drives costs upward throughout American medicine. Medicaid, finally, distorts state budget decisions by having the federal government pick up half the tab. Any state that implements cost-cutting reforms will give up federal dollars and thus pocket only half the savings. No state politician will want to pay the full political price for cost-cutting reforms while getting only half the fiscal benefit: So once more, costs go up.