Politics & Policy

Unhealthy in Massachusetts

The Romney plan doesn't cut it.

Republican Massachusetts governor Mitt Romney is trying to accomplish in his final year in office what Democrats can only dream of these days: boosting government spending on and regulation of health care and requiring individuals to purchase government-designed policies. Romney’s plan, which is backed by such liberals as Sen. Ted Kennedy (D., Mass.), is being pitched as a compact between citizens and the state.

#ad#Thanks to state-imposed regulations requiring companies to charge the same rates to the sick and the healthy, individual health insurance is not always a good deal in Massachusetts, at least for those who are young and healthy. The result: Many people elect not to purchase health insurance, unless it’s provided at work at a deep discount or as a hidden cost.

The latest numbers count more than 460,000 Massachusetts residents as uninsured, which is less than 10 percent of the state’s population. It would be wrong, however, to think of these people as clamoring for health insurance. More than 100,000 of them, it turns out, are already eligible for Medicaid; they simply haven’t made the effort to sign up. Another 168,000 live in households with incomes greater than $55,000, and would presumably purchase health insurance if they saw it as a priority. The remaining 200,000 are the classic working poor–people for whom health insurance is not affordable. It’s this group that elicits near universal sympathy when it comes to health insurance.

The gutsy attack on this problem would be to figure out its real cause. It’s the price of insurance that prevents many from purchasing it, and the price is directly related to the government regulations that decimated the private market by prohibiting companies from charging fair prices for their products. Deregulation of the insurance market is required.

That’s not Romney’s approach. He started off in 2004 offering something for nothing: the state would design a cut-rate health-insurance plan and create a new bureaucracy, the Health Insurance Exchange, to administer it. The Exchange would offer a limited policy, but would still include such things as mental health–and it would surely grow under pressure from interest groups. The state would redirect some current spending on health care and the feds would kick in $100 million. Individuals would be required to purchase the product or lose their standard deduction on state taxes. Romney soft-peddled the mandate hammer, calling it a “personal responsibility system.”

Romney originally promised to deliver a new bureaucracy, new meddling in health markets, and an indirect tax increase on uninsured citizens. The good part, however, was that he promised no new state spending on health care, and he even threw in a tax cut. A year later, he’s promising to earmark $200 million to get the legislature to agree on his plan. As for the tax cut, that’s been reduced and slated for after he leaves office.

In a nutshell, then, the Republican presidential hopeful is pouring political capital into creating a new state health-care bureaucracy, further regulating health insurance, forcing individuals to spend their money on a government designed product, and increasing spending by $200 million. It’s not hard to see why liberals such as Kennedy are excited about his bravery. They recall what such acts of courage did for another Massachusetts governor with presidential ambition, Michael Dukakis.

Romney’s foray into health policy betrays a fallacious assumption that should not go uncorrected. Conservatives who believe in free markets simply cannot accept the rhetoric equating morality and compassion with universal third-party health insurance coverage. In the United States, we have already achieved universal access to health care through a variety of public and private systems–often derided as a “patchwork system” by those who long for a single statist solution–through private insurance, public insurance, publicly funded free health care clinics, and uncompensated care at hospitals and doctors’ offices. Americans without health insurance consume, on average, $1,253 a year in health care services, with the bulk of the bill picked up by someone else.

Accepting that everyone living in the United States needs formal third-party coverage will inevitably lead to government health care. In a free society, there will always be people who choose not to purchase third party insurance, either because they don’t think it’s worth it, or because they are shortsighted. The only way, therefore, to achieve universal third-party coverage is either through single-payer health care–i.e. putting everyone on Medicaid–or by mandating that people purchase health insurance. Both are losers.

Conservatives mostly understand the problems associated with the direct government provision of products and services–poor quality, shortages, high taxes, and shoddy service. What they must also understand is that forcing an individual to purchase health insurance is merely a rest stop on the journey to the same destination.

The best way to make health insurance available to the greatest number of people is to make sure that it can be provided at the lowest possible prices. Instead of abolishing the government regulations that have raised the cost of health insurance in Massachusetts, Governor Romney has proposed that the government should pay for the health insurance of the very people for whom the government made health insurance unaffordable.

Sally C. Pipes is president and CEO of the Pacific Research Institute. She is the author of Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer.

Sally C. Pipes is the president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The False Promise of Single-Payer Health Care (Encounter). Follow her on Twitter @sallypipes.

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