In today’s Wall Street Journal, my good friend Grace-Marie Turner of the Galen Institute focuses on the similarities between Obamacare and former Massachusetts governor Mitt Romney’s health-care plan. But she ignores their more profound differences.
Both include an exchange, a subsidy for the poor, and an incentive for individuals to become insured, the so-called individual mandate.
The difference is that Romney’s plan did not raise taxes on individuals or businesses, didn’t cut Medicare, didn’t include “public options” or raise spending by a trillion dollars, and it didn’t impose insurance price controls. Romney’s plan made no attempt to take over health care. The Massachusetts legislation was a scant 70 pages long, compared to Obamacare’s gargantuan 2,000-page maze of regulation.
Perhaps most importantly, Romney’s plan is a state plan, not a one-size-fits-all federal usurpation of a power constitutionally reserved to the states. States should be free to adopt reforms that work for them. They can borrow the best ideas from one another. The federal government’s role is to be flexible about how their share of health-care dollars may be spent.
Some of the elements Obama copied from the Massachusetts health- care plan make sense, such as the creation of a market exchange for health insurance where consumers can shop among private plans for the lowest price. That is consumer empowerment at its best. Romney’s plan also permitted individuals purchasing insurance on their own to receive the same tax advantages as those who are covered by their employers. Expanding tax deductibility for health-insurance purchases is, of course, a key free-market conservative reform.
The Massachusetts health plan partially subsidizes the purchase of private health insurance by lower-income people using money that the state was already paying for free care at hospitals. Romney simply shifted funds that were going to hospitals as reimbursement for free care and instead gave it to individuals so they could purchase insurance on their own. Obama’s plan finances its subsidy with higher taxes and cuts in Medicare.
Romney opposed a requirement that employers furnish health coverage or else pay a fee. And he supported a provision that would have allowed individuals to post a bond demonstrating their capacity to cover their health expenses in lieu of purchasing coverage. Unfortunately, the legislature did not go along with him.
Governor Romney worked on his health-care plan with people from both sides of the political spectrum, including the Heritage Foundation. In the end, the plan had overwhelming bipartisan support, including a yes vote from then–state senator Scott Brown. Some conservative critics charge that the Massachusetts plan’s costs have exploded. However, a 2009 study by the non-partisan Massachusetts Taxpayers Foundation determined the plan’s costs to be “relatively modest” and “well within projections.” To the extent that the plan’s costs have risen in recent years, it has been due to Democratic governor Deval Patrick, who has focused on expanding benefits instead of pursuing meaningful cost containment. Governor Romney can hardly be blamed for the failures of his Democratic successor. One solution to that problem would be to elect as the commonwealth’s next governor Republican Charlie Baker, a health-care executive with a reputation for turnarounds.
At the end of the day, the proof of the pudding is in the results. The Massachusetts rate of uninsured is approaching zero and is the lowest in the country by a wide margin. Of the over 430,000 more people who now enjoy the security of health insurance, approximately half of them are doing so without any government assistance. The plan is affordable, with the state’s cost at 1-2 percent of the total state budget.
The law has made good on its promise to get coverage to more people without breaking the bank and without a government takeover.
– Cesar Conda was assistant for domestic policy to Vice President Dick Cheney and a policy advisor to the 2008 Romney for President campaign.