CLT
UPDATE
Friday, April 14, 2006
Mass. healthcare
plan: Another car wreck ahead
It will "end up
accomplishing a lot less than they’re saying and it’s going to cost a
lot more."
Barbara Anderson
— Apr. 13, 2006
While Gov. Mitt Romney threw an extravagant
bill-signing party to celebrate new health-care legislation yesterday,
conservatives bashed the law as an unwarranted government intrusion that
will fail to achieve universal coverage or widespread public support....
Barbara Anderson of Citizens for Limited Taxation
applauded Romney’s core goal of encouraging personal responsibility for
medical costs, but she said the law is going to "end up accomplishing a
lot less than they’re saying and it’s going to cost a lot more."
The Boston Herald
Thursday, April 13, 2006
Critics slam insurance plan as intrusive and unwieldy
Governor Mitt Romney signed most of a sweeping new healthcare
bill into law yesterday at a festive Faneuil Hall ceremony hailed as a hallmark
of bipartisan achievement, even as healthcare specialists expressed concern that
the plan could start losing money in three years....
But amid the wide grins and handshakes, questions surfaced about the cost and
the sweep of the legislation, which makes Massachusetts the first state to try
to insure nearly all of its residents through an individual mandate to buy
insurance.
A legislative staff analysis estimates that the groundbreaking healthcare plan
would start losing money in two to three years, which could put pressure on
lawmakers to spend more tax money, increase the fee on businesses or scale back
the coverage of the sweeping bill. The analysis projects that the plan will be
about $160 million short of its estimated cost of $1.56 billion in the fiscal
year that starts July 1, 2008....
Michael Widmer -- president of the
Massachusetts
Taxpayers Foundation, a nonpartisan research organization in Boston -- said
he believes that the Legislature's plan is financially sound but that it could
very well require additional revenue.
"There are no significant traps," he said. "But numbers like this will never
work out exactly. We think [that] it may well take some additional state
dollars, but that it's likely to be a manageable amount."
The Boston Globe
Thursday, April 13, 2006
Joy, worries on healthcare
As Romney signs bill, doubts arise about revenues
The plan that the Wall Street Journal dubbed "Romney Care"
yesterday has caused divisions among conservatives, including some who are
uncomfortable with the measure's requirement that individuals buy insurance and
that businesses that don't provide it face the surcharges. The editorial page of
the Journal said the plan "is a recipe for higher taxes and more government
intervention down the road."
The Boston Globe
Thursday, April 13, 2006
Conservatives split on mandate and business fees
On the other hand, his law is far from the market-based
approach the Governor claimed in an op-ed on this page yesterday. The core flaw
is that the plan forces individuals to buy health insurance, and penalizes
businesses that don't provide it, before deregulating the market for private
health insurance. So the state is forcing people to buy insurance many will need
subsidies to afford, which is a recipe for higher taxes and more government
intervention down the road. Could this be why Mrs. Clinton, Ted Kennedy and the
Families USA government medicine lobby are all praising it to the skies? Just
asking.
A Wall Street Journal editorial
Wednesday, April 12, 2006
RomneyCare
Only weeks after I was elected governor, Tom Stemberg, the
founder and former CEO of Staples, stopped by my office. He told me that "if you
really want to help people, find a way to get everyone health insurance." I
replied that would mean raising taxes and a Clinton-style government takeover of
health care. He insisted: "You can find a way."
I believe that we have. Every uninsured citizen in Massachusetts will soon have
affordable health insurance and the costs of health care will be reduced. And we
will need no new taxes, no employer mandate and no government takeover to make
this happen.
The Wall Street Journal
Tuesday, April 11, 2006
Health Care for Everyone? We Found a Way.
By Mitt Romney
Chip Ford's CLT Commentary
Write down the date, April 12, 2006. That's when
Barbara Anderson of Citizens for Limited Taxation predicted of
Massachusetts' second attempt at first-in-the-nation healthcare-for-all that it will "end up
accomplishing a lot less than they’re saying and it’s going to cost a
lot more," as reported in today's Boston Herald.
CLT predicted the same back in the mid-80s, when
then-governor Dukakis and his secretary of transportation, Fred Salvucci,
pushed through the Big Dig project with the promise that it'd be done in
but a few years and cost $3.5-4.5 billion when completed. CLT and
other critics were relegated to the status of doom-and-gloomers and
naysayers, but the results were inevitable. Too bad none of the major
players were listening back then, isn't it? Ten billion taxpayers'
dollars over-budget later and still incomplete, scandal-ridden with
corruption and patronage, I'd have thought we'd all have learned a
lesson about government undertakings of such magnitude on mere
speculation. I'd have hoped next time that we'd dismiss such estimates as little more than
government getting its
foot in the door before kicking it off the hinges.
Reflecting what I wrote in the CLT Update of Apr. 7 ("Big
Dig" comes to Mass. healthcare: "Well, in just 48 hours the cost for
individual insurance has increased from an intended '$200' to $325."),
the Wall Street Journal termed this next inevitable Massachusetts debacle, "a recipe
for higher taxes and more government intervention down the road."
Like seasoned used-car salesmen, the Beacon Hill
pols' pitches sound good -- what
a deal. But once this lemon rolls out of the lot and onto the road, is supposedly operating on all cylinders as
promised, the pinging and
skipping will begin, the rattling will start, and its tires will go
flat. But by then it'll be too late to bring it back to the dealer for a
refund. It'll need to go to our mechanics for a tune-up and major
repairs -- ka-ching, get out your check book.
One thing after another will go and trips back to the
mechanic's shop will become routine. There will never be enough
cash coming in to support its expanding demands along with all the other "unmet needs."
We'll have to spend increasingly more and more to keep this clunker on
the road. After enough breakdowns, we'll need a second job just to
afford to keep it running.
Since health care became a taxpayer-funded
entitlement there's no turning back. One way or another, we're paying
for healthcare for all. As Barbara has noted, the mandate that everyone
assume a little personal responsibility has unfortunately become
necessary under the accepted paradigm. Otherwise, those carrying their
own health insurance also pay for those who do not for whatever reasons.
Somebody is paying for it when the uninsured feel a god-given
right to access "free" medical care on demand.
What bothers us more than the new "assessment"
-- as the salesmen have taken to calling the $295 per-employee tax (on any business
having more than eleven of them for which it doesn't provide health
insurance) -- is the old $62 per-employee
penalty that's left in place, punishing employers who do
provide health insurance. "Damned if you do, damned if you don't"
in Massachusetts.
The "Father of Our Country," George Washington,
provided fair warning: "Government is not reason, it is not
eloquence, it is force; like fire, a troublesome servant and a fearful
master. Never for a moment should it be left to irresponsible action."
Too bad so many seem to have forgotten so much, or
worse: have willfully chosen to ignore it.
 |
|
Chip Ford |
The Boston Herald
Thursday, April 13, 2006
Critics slam insurance plan as intrusive and unwieldy
By Casey Ross
While Gov. Mitt Romney threw an extravagant bill-signing party to
celebrate new health-care legislation yesterday, conservatives bashed
the law as an unwarranted government intrusion that will fail to achieve
universal coverage or widespread public support.
"It represents an unprecedented level of interference with personal
decision-making," said Michael Tanner of the Cato Institute, a
libertarian think tank. "Simply by breathing in Massachusetts they’re
saying you must buy the product they say you should have."
The landmark legislation signed by Romney yesterday mandates for the
first time in the United States that individuals buy health insurance or
face government-imposed financial penalties. It also launches a broader
campaign to extend coverage to 95 percent of the state’s 550,000
uninsured.
Romney, who is considering a run for president in 2008, hailed the
legislation as a national model that can be replicated to help eliminate
inequities in the nation’s system of paying for health care.
"The reason this is so landmark is that we have found a way,
collectively, to get all of our citizens insurance without some new
government-mandated takeover or a huge new tax program," Romney said.
The law provides subsidies and sliding-scale premiums to get low-income
residents into health plans. Those deemed able to afford insurance but
who still refuse would face increasing tax penalties.
The law also includes a $295-per-employee fee to be imposed on
businesses that fail to insure their workers.
Romney vetoed that provision yesterday, but Democratic lawmakers are
expected to override the governor.
Skeptics of the legislation’s ambitious goal for near-universal coverage
said the real test begins now, as government employees attempt to put in
place the complex regulatory framework needed to make its vision a
reality.
"You have to have enforcement mandates and boards and it becomes very
directive and regulatory," said Grace-Marie Turner of the Galen
Institute, a national health-care policy group.
She said the law’s lack of built-in cost controls will quickly result in
higher premiums, new taxes and larger fines.
Barbara Anderson of Citizens for Limited Taxation
applauded Romney’s core goal of encouraging personal responsibility for
medical costs, but she said the law is going to "end up accomplishing a
lot less than they’re saying and it’s going to cost a lot more."
Return to top
The Boston Globe
Thursday, April 13, 2006
Joy, worries on healthcare
As Romney signs bill, doubts arise about revenues
By Scott Helman and Liz Kowalczyk, Globe Staff
Governor Mitt Romney signed most of a sweeping new healthcare bill into
law yesterday at a festive Faneuil Hall ceremony hailed as a hallmark of
bipartisan achievement, even as healthcare specialists expressed concern
that the plan could start losing money in three years.
The bill will require all state residents to have health insurance by
July 1, 2007, and require businesses with 11 or more workers to pay $295
per employee annually if the companies do not provide insurance. Romney
vetoed the fee, but the Legislature is expected to override the veto.
In a moment widely praised as historic for the state and seen as a big
boost to Romney's presidential aspirations, the Republican governor
basked in the credit and shared some, too, as he was joined by
Democratic leaders of the Legislature and US Senator Edward M. Kennedy.
But amid the wide grins and handshakes, questions surfaced about the
cost and the sweep of the legislation, which makes Massachusetts the
first state to try to insure nearly all of its residents through an
individual mandate to buy insurance.
A legislative staff analysis estimates that the groundbreaking
healthcare plan would start losing money in two to three years, which
could put pressure on lawmakers to spend more tax money, increase the
fee on businesses or scale back the coverage of the sweeping bill. The
analysis projects that the plan will be about $160 million short of its
estimated cost of $1.56 billion in the fiscal year that starts July 1,
2008.
A number of economists and health policy specialists interviewed by the
Globe said that the plan's financing is solid for the next two years,
especially since lawmakers have added a cushion of money in case of
unexpected costs.
But some specialists warned that the picture is less certain after that.
"There are a lot of things that have to happen right for there to be
enough money," said John Holahan of the Urban Institute, a nonpartisan
policy research organization in Washington, D.C.
Rising healthcare costs could easily outstrip the money raised by the
bill through state and federal contributions and the employer
assessment, observers said.
Some lawmakers, conceding they may have to revise the new law as it is
implemented, said they are counting on a number of factors breaking
their way for the plan to continue without more state spending,
including being able to control medical costs and negotiate more federal
aid.
Other concerns have surfaced, as well. Some legislators and insurers say
the premiums on new, private health policies will be about $325 a month
for individuals, more than originally envisioned by Romney. Some
conservative critics have also complained that the bill amounts to a
huge expansion of government. And some businesses worry that the $295
fee will be burdensome.
Before signing the bill yesterday, Romney vetoed eight provisions in the
145-page bill, including the business fee and an expansion of Medicaid
benefits for certain recipients. His vetoes exposed tensions with
Democratic lawmakers that have bubbled beneath the surface during the
long, delicate, and highly political negotiations among the governor,
House, and Senate over the watershed legislation.
"I don't understand how the governor can veto part of the bill and take
full credit," said state Representative Patricia A. Walrath, a Stow
Democrat who co-chaired the legislative committee that crafted the final
bill.
House Speaker Salvatore F. DiMasi, a chief proponent of the employer
assessment, rebuked the governor during the ceremony for vetoing the
provisions.
"Governor Romney, this bill was crafted after long and difficult
negotiations," DiMasi said in his remarks from the podium. "To change
anything will disturb the delicate balance that made this law possible."
The vetoes promise to be more symbolic than meaningful, because the
House and Senate passed the bill overwhelmingly and are expected to
override all the vetoes. DiMasi told reporters yesterday that House
leaders would quickly study the vetoes and schedule override votes.
Under the bill, Massachusetts aims to cover nearly all of its 500,000 to
600,000 uninsured residents through a combination of the employer
assessment, new subsidized private health plans, a requirement that
individuals be on a health plan, and other measures. The
first-of-its-kind measure has received heavy national and international
attention.
"After so many years of false starts, our actions have finally matched
our words, and we have lived up to our ideals," said Kennedy, who has
worked closely with state leaders on the plan and canceled a trip to
India, in part to be at yesterday's ceremony.
Senate President Robert E. Travaglini said that "never in my wildest
dreams" did he envision being at a bill-signing for such a historic
agreement.
"We can all share the credit for this landmark legislation," said
Travaglini, singling out not just elected officials but the business
leaders, insurers, healthcare advocates, and others who were crucial in
crafting the bill. "But the biggest victory is for the people of
Massachusetts, who will now have equal access to the most renowned
healthcare in the world."
Travaglini and other lawmakers said the Legislature may have to pass
revisions as the new law is set in motion, affecting insurers,
hospitals, doctors and community health centers, and the state's
uninsured.
Romney was asked after yesterday's event whether policymakers know what
the real price tag is for the bill.
"I think what we can know is how much it's going to cost over the next
three years," he responded. "We've done the best human beings can do to
carry out the full analysis and review." He leaves office in January.
The plan is heavily dependent on a special pool of federal money, which
the federal government was threatening to withdraw if the state did not
pass a healthcare bill. The $610 million annually is guaranteed into
2008 under a so-called Medicaid waiver. At that point, Massachusetts
officials must renegotiate the contract with the federal government.
Legislators are hoping that despite the federal deficit, the state will
negotiate an increase in funding beyond the $610 million to help close
the health plan's revenue gap.
Also at issue is the state's "free care pool," a pot of money used to
pay hospitals for treating uninsured residents. Legislative leaders
assume that use of the pool will drop dramatically as more uninsured
residents buy insurance. The savings will go toward subsidies to help
low-income uninsured residents buy health plans. But legislators who
crafted the healthcare plan said they actually expect free care payments
to fall even lower, also helping to close the revenue gap.
"If anything, we tried to be conservative in our estimates," Walrath
said in an interview.
Still, even if these issues break in the state's favor, financial
pressure on the plan will only grow.
Medical inflation, which has been pushing up health insurance premiums
by 10 to 14 percent annually as more patients seek increasingly
expensive treatments and technology, is another wild card.
In their projections, legislative staff members assumed that medical
costs will grow 10 percent annually in the first three years of the
plan. They estimate that the subsidies that help pay insurance premiums
for low income people will cost $725 million by the budget year that
starts July 1, 2008. But if medical costs continue to grow at 10 percent
a year, the cost of the subsidies could reach nearly $800 million by
2010, unless the state opts to provide lower subsidies.
Senator Richard Moore, Democrat of Uxbridge, cochairman of the Joint
Committee on Health Care Financing, said he does not believe that the
program will run a deficit, partly because legislators have included
several cost-control measures.
Those measures include a new pay-for-performance program that will
require hospitals and doctors to meet quality and efficiency standards
to earn Medicaid rate increases starting in the second year of the plan.
"I assume medical costs will at least stabilize, and we won't see the
double-digit increases we've seen," Walrath said in an interview.
Michael Widmer -- president of the
Massachusetts Taxpayers Foundation, a nonpartisan research
organization in Boston -- said he believes that the Legislature's plan
is financially sound but that it could very well require additional
revenue.
"There are no significant traps," he said. "But numbers like this will
never work out exactly. We think [that] it may well take some additional
state dollars, but that it's likely to be a manageable amount."
Return to top
The Boston Globe
Thursday, April 13, 2006
Conservatives split on mandate and business fees
By Stephanie Ebbert, Globe Staff
As he signed the state's healthcare bill yesterday, Governor Mitt Romney
called it a big "leap forward" for Massachusetts. Some pundits see it
offering a big leap for his potential presidential campaign, too.
But, overshadowed by the rhetoric, Romney's veto of a $295-per-worker
surcharge on businesses with 11 or more employees that don't provide
insurance seemed to be aimed at a political debate among conservatives.
The plan that the Wall Street Journal dubbed "Romney Care" yesterday has
caused divisions among conservatives, including some who are
uncomfortable with the measure's requirement that individuals buy
insurance and that businesses that don't provide it face the surcharges.
The editorial page of the Journal said the plan "is a recipe for higher
taxes and more government intervention down the road."
Michael Tanner, director of health and welfare studies for the Cato
Institute, suggested that the legislation invites government
interference. "We think the individual mandate itself is an
unprecedented level of interference with individual choice and
decision-making," Tanner said.
The issue has split the conservative movement, Tanner said. "There's a
group of big-government conservatives who believe you can use government
power to achieve conservative ends. This puts Governor Romney squarely
in that camp. And the traditional small-government conservatives, I
think, are going to be much more critical of this proposal. There's no
doubt that that split is going to be the key debate that takes place
with the presidential contest and in the Republican party over the next
couple of years."
Romney spoke to the debate directly Tuesday, when in his own Journal
op-ed article, he said that libertarians were off-base in their
criticism of the individual mandate. He also revealed for the first time
that he would veto the surcharge on businesses that do not insure their
employees.
Grover Norquist, the influential president of Americans for Tax Reform,
said Romney's move was a topic of much discussion at a weekly meeting of
conservatives in Washington. Norquist, who had urged Romney to veto the
surcharge in an interview with the Globe last month, applauded Romney's
move yesterday and softened his criticism.
"There is the sense that what Massachusetts has done here is the
beginning of a very, very important national debate and that other
states will take the framework of what the governor put together, take
out the bits the Massachusetts Legislature thought were cute, and that
you'll see this in other states," Norquist said.
As such, he thinks the effort can only help Romney in a presidential
bid. "It would certainly give the governor a very interesting talking
point on an issue that is going to be central to any upcoming election,"
he said. "You always have the out that 'I had a really good idea, and
the Democratic Legislature messed it up.'"
Tom Rath, Republican National committeeman from New Hampshire, echoed
that view. "Quite apart from the substance of what he's done ... there
is a desire in the electorate, certainly up here, to see somebody
somewhere do something," Rath said.
The Legislature is likely to override Romney's veto of the charge on
businesses that don't provide insurance, the most controversial feature
of the bill.
But few voters would be attentive to such maneuvering.
"It's symbolic politics on both sides," said Edmund Haislmaier, the
Heritage Foundation senior fellow who provided the Romney administration
with the template for a healthcare bill that did not include a surcharge
on employers.
Still more symbolism came at the signing ceremony: a representative of
the Heritage Foundation, one of the best known conservative think tanks
in Washington, spoke in favor of the health plan from the Faneuil Hall
stage.
Return to top
The Wall Street Journal
Wednesday, April 12, 2006
A Wall Street Journal editorial
REVIEW & OUTLOOK
RomneyCare
GOP governors don't usually grab friendly national headlines. So it's
worth paying attention when Mitt Romney of Massachusetts starts getting
raves for passing legislation promising "universal" health insurance.
All the more so because the details of his new "national model" don't
measure up to the political and media hosannas.
Give Mr. Romney credit as a rare Republican willing at least to discuss
health care. In that he's miles ahead of GOP Congressional leaders, who
won't even vote on pro-market reforms. We certainly favor state policy
experiments, and Mr. Romney may have done the best he could given his
far-left legislature. The new law also avoids the worst coercive
pitfalls of Hillary Clinton's 1993 reform.
On the other hand, his law is far from the market-based approach the
Governor claimed in an op-ed on this page yesterday. The core flaw is
that the plan forces individuals to buy health insurance, and penalizes
businesses that don't provide it, before deregulating the market for
private health insurance. So the state is forcing people to buy
insurance many will need subsidies to afford, which is a recipe for
higher taxes and more government intervention down the road. Could this
be why Mrs. Clinton, Ted Kennedy and the Families USA government
medicine lobby are all praising it to the skies? Just asking.
Mr. Romney compares his "individual mandate" to the command that
everyone get car insurance. However, states only force people who drive
to have car insurance, and only then to insure for liability if they
harm others. Drivers needn't take out collision insurance for damage
they do to their own cars or bodies.
The mandate is also supposed to solve the problem of "free riders" who
show up in emergency rooms without insurance and thus stick their costs
on taxpayers. But studies have shown that the cost of such
"uncompensated care" -- i.e., for people the government isn't already
subsidizing through Medicaid -- is a tiny fraction of the nation's
medical budget.
Governor Romney could have better spent his political capital ensuring
that Massachusetts residents can buy coverage for truly "catastrophic"
costs. In Connecticut young people can protect themselves against large
medical bills for less than $40 a month. The new Bay State law preserves
all existing coverage mandates and regulations. Mandates such as
"guaranteed issue" -- which means people can wait until they're sick to
buy coverage -- and required chiropractor coverage have made
Massachusetts one of the most expensive states in which to buy
insurance.
The law sets up a new board to help determine what acceptable insurance
policies look like. Governor Romney is talking about a target price of
some $200 per person per month, which is very expensive if his only goal
is to tackle the free-rider problem. Over time, such a board is all but
certain to be captured by the same special interests that will insist on
even more "basic" coverage. And that cost will increasingly be imposed
on business. Mr. Romney says he opposes the $295 per uncovered employee
fee in the bill that passed the Massachusetts legislature. But that's
small change compared with what politicians are likely to demand of
employers as costs rise in the future.
The truth is that Americans have far better health coverage than the
media and liberal politicians contend. A vast and expensive ($330
billion a year) Medicaid system covers people who are genuinely poor,
and emergency rooms must treat anyone regardless of ability to pay. In
Massachusetts as in every other state, about 20% of the "uninsured" are
Medicaid-eligible but haven't bothered to sign up. Yet they can sign up
whenever they need care. Another hefty chunk of the uninsured (40%) can
easily afford insurance but choose not to buy it. There's no inherent
free-rider problem here, since they can be pursued for bad medical debts
like any other debts.
The real people to worry about are those who are too well off to qualify
for Medicaid but are priced out of the insurance market thanks to
mandates and other regulations. The Romney plan will subsidize them for
buying the compulsory insurance, but it does little on the regulatory
side to make that insurance more affordable. Some of our friends praise
the bill for setting up a government-sponsored insurance exchange to
help people find coverage. But we don't see why a state exchange is
preferable to a private marketplace such as eHealthinsurance.com (which
doesn't even market individual policies in Massachusetts because of
over-regulation).
What the Romney plan really shows is the need for federal law to free up
interstate trade in health insurance. Under a bill sponsored by John
Shadegg (R., Ariz.), residents of Massachusetts or other states would no
longer be held hostage to the regulators, chiropractors and other
lobbies that make insurance so expensive. Instead, they could purchase
cheaper peace of mind to cover real medical emergencies from more
sensible states, such as Connecticut or Iowa. Naturally, GOP leaders are
asleep at this policy switch.
The real health insurance problem in America today isn't lack of
coverage per se; it's the inability of insurers to offer affordable
policies in many states. By making a fetish of "universal" coverage,
Governor Romney has bought into a bidding war that Democrats and
advocates of socialized medicine are bound to win in the end.
Return to top
The Wall Street Journal
Tuesday, April 11, 2006
COMMENTARY
Health Care for Everyone? We Found a Way.
By Mitt Romney
BOSTON -- Only weeks after I was elected governor, Tom Stemberg, the
founder and former CEO of Staples, stopped by my office. He told me that
"if you really want to help people, find a way to get everyone health
insurance." I replied that would mean raising taxes and a Clinton-style
government takeover of health care. He insisted: "You can find a way."
I believe that we have. Every uninsured citizen in Massachusetts will
soon have affordable health insurance and the costs of health care will
be reduced. And we will need no new taxes, no employer mandate and no
government takeover to make this happen.
When I took up Tom's challenge, I assembled a team from business,
academia and government and asked them first to find out who was
uninsured, and why. What they found was surprising. Some 20% of the
state's uninsured population qualified for Medicaid but had never signed
up. So we built and installed an Internet portal for our hospitals and
clinics: When uninsured individuals show up for treatment, we enter
their data online. If they qualify for Medicaid, they're enrolled.
Another 40% of the uninsured were earning enough to buy insurance but
had chosen not to do so. Why? Because it is expensive and because they
know that if they become seriously ill, they will get free or subsidized
treatment at the hospital. By law, emergency care cannot be withheld.
Why pay for something you can get for free?
Of course, while it may be free for them, everyone else ends up paying
the bill, either in higher insurance premiums or taxes. The solution we
came up with was to make private health insurance much more affordable.
Insurance reforms now permit policies with higher deductibles, higher
co-pays, coinsurance, provider networks and fewer mandated benefits like
in vitro fertilization -- and our insurers have committed to offer
products nearly 50% less expensive. With private insurance finally
affordable, I proposed that everyone must either purchase a product of
their choice or demonstrate that they can pay for their own health care.
It's a personal responsibility principle.
Some of my libertarian friends balk at what looks like an individual
mandate. But remember, someone has to pay for the health care that must,
by law, be provided: Either the individual pays or the taxpayers pay. A
free ride on government is not libertarian.
Another group of uninsured citizens in Massachusetts consisted of
working people who make too much to qualify for Medicaid, but not enough
to afford health-care insurance. Here the answer is to provide a subsidy
so they can purchase a private policy. The premium is based on ability
to pay: One pays a higher amount, along a sliding scale, as one's income
is higher. The big question we faced, however, was where the money for
the subsidy would come from. We didn't want higher taxes; but we did
have about $1 billion already in the system through a long-established,
uninsured-care fund that partially reimburses hospitals for free care.
The fund is raised through an annual assessment on insurance providers
and hospitals, plus contributions from the state and federal
governments.
To determine if the $1 billion would be enough, Jonathan Gruber of MIT
built an econometric model of the population, and with input from
insurers, my in-house team crunched the numbers. Again, the result
surprised us: We needed far less than the $1 billion for the subsidies.
One reason is that this population is healthier than we had imagined.
Instead of single parents, most were young single males, educated and in
good health. And again, because health insurance will now be affordable
and subsidized, we insist that everyone purchase health insurance from
one of our private insurance companies.
And so, all Massachusetts citizens will have health insurance. It's a
goal Democrats and Republicans share, and it has been achieved by a
bipartisan effort, through market reforms.
We have received some helpful enhancements. The Heritage Foundation
helped craft a mechanism, a "connector," allowing citizens to purchase
health insurance with pre-tax dollars, even if their employer makes no
contribution. The connector enables pre-tax payments, simplifies payroll
deduction, permits pro-rated employer contributions for part-time
employees, reduces insurer marketing costs, and makes it efficient for
policies to be entirely portable. Because small businesses may use the
connector, it gives them even greater bargaining power than large
companies. Finally, health insurance is on a level playing field.
Two other features of the plan reduce the rate of health-care inflation.
Medical transparency provisions will allow consumers to compare the
quality, track record and cost of hospitals and providers; given
deductibles and coinsurance, these consumers will have the incentive and
the information for market forces to influence behavior. Also,
electronic health records are in the works, which will reduce medical
errors and lower costs.
My Democratic counterparts have added an annual, $295 per-person fee
charged to employers that do not contribute toward insurance premiums
for any of their employees. The fee is unnecessary and probably
counterproductive, and so I will take corrective action.
How much of our health-care plan applies to other states? A lot. Instead
of thinking that the best way to cover the uninsured is by expanding
Medicaid, they can instead reform insurance.
Will it work? I'm optimistic, but time will tell. A great deal will
depend on the people who implement the program. Legislative adjustments
will surely be needed along the way. One great thing about federalism is
that states can innovate, demonstrate and incorporate ideas from one
another. Other states will learn from our experience and improve on what
we've done. That's the way we'll make health care work for everyone.
Mr. Romney is governor of Massachusetts.
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