Politics & Policy

PowerPoint Failure

National Review endorsed Mitt Romney for president during the 2008 primaries. While we objected to the individual mandate he had enacted in Massachusetts — making the purchase of health insurance compulsory for residents of the commonwealth — we were willing to look past that flaw because his proposals for changing health-care policy as president were much better.

But the enactment of Obamacare has raised the stakes on this issue. It is now of critical importance that Obama’s opponent in 2012 be able to make the case against the health-care law and for a sensible replacement. It is because of those raised stakes that Romney felt compelled to deliver a speech yesterday making the argument against Obamacare and for his own approach. The two halves of the speech, unfortunately for him, canceled each other out.

Obamacare has three main components. It bans insurers from taking account of customers’ health status in setting premiums, requires everyone to purchase health insurance, and subsidizes those who cannot afford to meet the requirement. Thanks to the legislation Romney signed, Massachusetts law has all three features. Obama justifies the individual mandate — in political debate and in court — as necessary to keep the uninsured from raising everyone else’s premiums with their emergency-room visits. Romney advances the same justification. Much of Obamacare’s expansion of coverage is achieved through putting more people on the Medicaid rolls. That’s what Romney’s Massachusetts plan did, too.

You can see the difficulty for Romney in arguing for the one and against the other. He tried two tacks yesterday. The first was to attack Obamacare’s financing mechanisms: its tax increases and its “diversion” of Medicare funds to the new entitlement. That disagreement over how to pay for the plan is important, but it is not as important as the more basic question of whether the plan takes American health care, and government, in the right direction. It cannot mark the difference between a “government takeover” of health insurance, which is how he described Obamacare, and his own allegedly modest effort to help people get insurance.

Romney’s second gambit was to plead federalism. His plan was a valid exercise of state legislative discretion, not an attempt by the federal government to reshape the health-care industry nationally. His own federal plan — a collection of mainstream-conservative policy ideas that most of his intra-party critics would applaud — would be less intrusive. There is something to the state/federal distinction, obviously. There is no constitutional case against the Massachusetts plan, for example.

But when conservatives argue that Obamacare is a threat to the economy, to the quality of health care, and to the proper balance between government and citizenry, we do not mean that it should be implemented at the state level. We mean that it should not be implemented at all. And Romney’s health-care federalism is wobbly. The federal government picked up a fifth of the cost of his health-care plan. His justification for the individual mandate also lends itself naturally toward federal imposition of a mandate. He says that the state had to make insurance compulsory to prevent cost shifting, because federal law requires hospitals to treat all comers, insured or not. But if federal law is the source of a national problem, it makes no sense to advocate a state-by-state solution.

As it happens, the cost-shifting argument is overblown. Treatment of the uninsured probably increases premiums by something in the neighborhood of 1 percent. That number could be reduced in many ways short of forcing everyone to buy insurance. (Romney even advocates some of those methods in his national plan.) Forcing everyone to buy insurance, meanwhile, carries its own costs in subsidies and added regulatory requirements, and over time those costs are likely to outweigh the costs the mandate is supposed to eliminate.

Costs are rising in Massachusetts, price controls are in the offing, and the plan is losing popularity. We understand that Romney does not feel that he can flip-flop on what he had touted as his signature accomplishment in office. But if there is one thing we would expect a successful businessman to know, it is when to walk away from a failed investment.


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