Politics & Policy

Romney’s Chronic Health-Care Problem

There is no easy cure for what ails Mitt Romney’s presidential ambitions.

They haven’t even finished counting 2010 midterm ballots (New York’s 1st congressional district is still undecided), but already potential Republican candidates are testing the presidential waters for 2012. Among the early frontrunners will be former Massachusetts governor Mitt Romney.

Romney will have several powerful advantages: name recognition, plenty of money, a strong organization left over from 2008, and a reputation for business competence during an election in which economic issues and job creation are likely to dominate. But he will also have one enormous albatross hanging around his neck: the Massachusetts health-care program.

One of the clearest lessons of the 2010 elections was that voters remain strongly opposed to President Obama’s health-care reform. And if voters in general dislike Obamacare, Republican voters positively loathe it. According to the most recent Rasmussen survey, voters overall support repealing Obamacare by a margin of 58–37. Among Republicans, 84 percent favor repeal.

Romney’s problem is that, despite his demurrals, the parallels between Obamacare and his 2006 Massachusetts reform plan are striking. Both plans are built around an individual mandate requiring citizens to purchase a government-designed insurance plan. Both plans dramatically increase government subsidies and Medicaid eligibility. Both plans use an exchange to redesign the individual and small-group insurance markets, creating a “managed competition” model for insurance. And both Massachusetts and Obamacare prohibit insurers from managing risk, shifting costs from older and sicker individuals to the young and healthy. Neither Obamacare nor Romneycare includes any substantial cost-containment mechanism.

Romneycare has proven to be a disaster in Massachusetts, providing a clear vision of the future under Obamacare. The number of uninsured has been reduced — at great cost — but the program has failed to achieve the promise of universal coverage. The subsidies and other costs have proven an enormous burden for the state budget. Insurance premiums have continued to rise, leading Massachusetts to attempt to impose premium caps and even a global budget. Insurers are losing money and threatening to pull out of the state.

It isn’t very hard to imagine his primary opponents preparing their 30-second attack ads.

Already, Tea Party activists are raising alarms. Romneycare is “something he’s going to have to explain,” warns Christen Varley, president of the Greater Boston Tea Party, “and it might just be a disaster for him.” Plymouth Rock Tea Party founder Lisa Martin says her distaste for Romneycare has forced her to consider other potential candidates, such as Sarah Palin. And presaging national discontent, Tea Party Express president Amy Kremer told the Christian Broadcasting Network that Romney’s Massachusetts health-care reform will “absolutely not pass muster with members.”

Romney has taken to making three arguments in his defense. First, he criticizes Obamacare for its $669 billion in tax increases, claiming that the Massachusetts plan did not increase taxes. That is technically true — if you consider only the legislation as Romney signed it. However, it is also true that the legislation relied heavily on federal subsidies — more than $300 million — and was still underfunded. Romney’s successor was forced both to cut back on some benefits that the plan originally offered and to raise the state’s cigarette tax by $1 per pack ($154 million annually) to help pay for the program. The state also imposed approximately $89 million in fees and assessments on health-care providers and insurers.

Second, Romney correctly points out that he used his line-item veto to challenge several objectionable provisions of the bill, including its employer mandate, but had his vetoes overridden by the Democratic-controlled legislature. To some degree those vetoes were an exercise in political theater, since the override was always a given. In the end, Romney signed the bill itself, even knowing that the objectionable provisions would be put back in. And he continues to support some of the plan’s worst aspects, notably the individual mandate.

Finally, Romney criticizes Obamacare as a “one size fits all” federal plan, whereas his plan was implemented in only one state. That’s true. Governor Romney only messed up the health-care system in Massachusetts, while President Obama has messed up health care for the entire country. Of course, as governor, Romney didn’t have the power to impose his model outside of his state. He now says that he opposes any national plan, calling for states to experiment with different approaches as the “laboratories of democracy.” That would certainly be an improvement over Obamacare. On the other hand, he has repeatedly said that he sees the Massachusetts plan as a model for the nation and has urged other states to copy his approach.

Other than the defenses above, Romney has so far been surprisingly stubborn, refusing to back down from his backing of the Massachusetts plan, calling it “a conservative plan.” In March, he told Fox News, “I think our plan is working well. And perhaps the best thing I can say about it is that it is saving lives. It is the ultimate pro-life effort, if you will, because people who otherwise could have lost their lives are now able to get the kind of care that they deserve.”

As a candidate who has been accused in the past of switching positions in order to curry political favor, Romney may have no choice but to stick with this one. But it is not going to make his road to the White House any easier.

– Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Michael TannerMr. Tanner is the director of the Cato Institute’s Project on Poverty and Inequality in California and the author of The Inclusive Economy: How to Bring Wealth to America’s Poor.


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