Critical Condition

Pawlentycare’s Pluses and Minuses

Over at The Atlantic, Nicole Russell has given us “A First Look at Pawlentycare.” There’s little doubt that Tim Pawlenty, former governor of Minnesota, is eager to trumpet his state’s achievements on health-care reform, and he definitely talks the talk of consumer-driven health care. I was very impressed by an op-ed he wrote in the San Diego Union-Tribune last November, wherein he called for “repealing Obamacare state by state”.

There is no doubt that Governor Pawlenty executed some changes in the right direction — the Flexible Benefit Plan, for example, allowed employers more flexibility of health benefits. He’s also a champion of using prices, and allowing patients more control of how their health dollars are spent. Doing this for public-sector workers resulted in lower costs to taxpayers.

But there is also more of a whiff of big-government conservatism in Pawlentycare. Before unloading on the recently retired governor, let me note that he faced seriously liberal Democratic majorities in both chambers of the state legislature, so we should not measure his reforms by an unrealistic free-market yardstick. Furthermore, he never got snookered into signing a bill that imposed an individual mandate to buy health insurance, as Governor Romney did in Massachusetts.

Most importantly, a governor and state legislature can do nothing to overcome the federal government’s continuing failure to reform the tax code to give our pre-tax health dollars to individuals and families, instead of employers and government agencies. Pawlenty’s Smart Buy Alliance, which allows “employers and groups to buy health insurance for their employees and members and sets uniform performance standards and reporting requirements,” may have a positive impact within the limits of employer-monopoly benefits – but it’s Big Government banging folks’ heads together nevertheless.

Other “fixes” are even less convincing. For example (emphasis mine): “In 2007, he signed legislation creating a new uniform billing and coding process across the entire state — a major change which has increased efficiency in the system and is expected to ultimately lower health-care costs.” Wrong, wrong, wrong!

Suppose we had a system whereby the government gave our employers control of our housing. That is, instead of a mortgage-interest tax deduction, the home you occupy would be a non-taxable benefit. You would live in it for as long as your employers’ HR manager decided, and would have to move whenever she decided to change benefits. Furthermore, when you needed a new refrigerator, for example, you wouldn’t go out and buy a new one, but go to an in-network kitchen-appliance dispensary where you’d pay a $20 co-pay to pick up the fridge that was on the list of kitchen appliances available to employees of your firm.

Insane? Yes. And the way to fix it would not be to have government-sponsored “uniform billing and coding” for household effects.

I continue to hedge my criticism by noting that Pawlenty has unambiguously championed reforming the federal tax code to allow individuals and families to control their health dollars. Furthermore, because a state has more general powers than the federal government, it may be more appropriate for a governor to take a greater operational interest in health care than a president should.

But if he wants to be the Republican candidate, Pawlenty still has to describe the health-care reforms he’d attempt with a Republican-led Congress acting within its enumerated powers. I am hopeful that he will do so in the months to come.


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