Mitt Romney’s most-heralded achievement as governor of Massachusetts was his overhaul of the Bay State’s health care system. However, as I’ve noted on the AmSpec blog, “RomneyCare” began running into problems pretty quickly. After much initial self-promotion, Romney now is slowly backing away from his health care plan, hinting that the Democrats now in charge should be blamed if it flops. “I was a little concerned at the signing ceremony when Ted Kennedy showed up,” Romney recently quipped. But the fact is that RomneyCare was a pretty liberal health care plan right from the start.
In 2006, then-governor Romney promoted his plan with enthusiasm and aplomb. He also did his best to mollify conservatives he sought to court for his presidential campaign who were concerned that his plan was little more than big government in disguise. Regarding the individual mandate that required all citizens of Massachusetts to purchase health insurance, Romney defended it in conservative terms — even if doing so seemed a bit Orwellian. He referred to the mandate as “a personal responsibility principle.” Yet if the government is forcing people to buy insurance, how can that be described as “personal”? Romney has never bothered to explain.
Romney is now avoiding responsibility for RomneyCare. In a recent newspaper article, his spokesman Kevin Madden claims the current state of the health care reform “is different from the approach the governor submitted” and is in the hands of “a state government that he is no longer in charge of.” But the problems RomneyCare now faces can be traced back to the legislation that Romney signed back in 2006.
One problem stems from the fact that whenever a government mandates that people must buy health insurance, it has to decide what constitutes “health insurance.” RomneyCare gave this responsibility to the “Commonwealth Connector,” a public entity created by the new law meant to serve as a clearinghouse for individuals and small businesses to purchase private insurance. The Connector was charged with deciding exactly what type of policies could be sold to individuals and small businesses.
Of course, when government bureaucrats are given this type of power, they seldom let individuals decide such matters for themselves. Earlier this month, the Connector published regulations dictating what would constitute minimum coverage. Among other things, all plans sold under the Connector must have prescription drug coverage, no limitations on benefits per year or per sickness, and cannot have annual deductibles higher than $2,000 for an individual and $4,000 for a family. The Connector marvels that “No other state in the nation has set such a high standard,” and that the regulations are “a landmark in raising the floor for coverage.” However, the Connector concedes that this will require about 250,000 Bay State residents who are already insured to buy even more coverage because the health insurance they currently have doesn’t meet the Connector’s minimum standards. Yet the Connector clearly knows what is best for those folks. Purchasing more coverage “will help secure them access to preventive care and protection from medical bankruptcy, should they become seriously ill,” states this appendage of the nanny state.
The Connector is also charged with setting minimum standards for the coverage that would be offered (and partly subsidized by the state) to low-income residents. The regulations that the Connector established all but ensure that such coverage will likely become very expensive very quickly. For starters, the regulations prevent low-income folks from purchasing more frugal health savings account (HSA) policies. All HSA policies must come with a deductible of at least $1,050 — that is, the insurance company cannot start paying for health care services until the policyholder meets that deductible. Under IRS regulations, the only exceptions to that rule are preventive care services. Yet the Connector required all low-income plans to cover a host of non-preventive services below any such deductible, thereby preventing HSAs from being included in those policies.
Not only has the Connector driven HSAs from the low-income market, a look at the benefits sheet (PDF) for low income policies shows that the policies will result in greater demand for health care. For example, there is no co-pay at all for lab work, eyeglasses, maternity care, or calling an ambulance. Co-pays for a visit to a primary-care physician are not more than $10 and co-pays to see a specialist are not more than $20. Emergency room care, which is very expensive, requires co-pays of only $50 or $75. With such pitiful demand restraints on health care, such policies are sure to result in higher health care prices through increased use. Higher health care prices naturally lead to higher health insurance prices. In theory, it could be argued that as health insurance prices increase, Massachusetts will have to pay more to help subsidize low-income people.
In fact, that has already happened. In April 2006, Romney claimed that his plan would “need no new taxes.” By November, as he was leaving office, it was clear that the plan would cost $150 million more in 2007 than Romney had initially claimed. Government programs almost always cost more than advertised, and Romney had little excuse for not realizing this. At the time, he was pursuing an investigation in Boston’s “Big Dig” highway project, a government boondoggle that was initially projected to cost $2.8 billion but ended up costing over $14 billion.
The fact is that then-governor Romney was all too eager to promote and sign RomneyCare into law last year despite its shortcomings. He did it because, up to that point, he had no notable achievements as governor — not a record one could use to run for president. Now, he is trying to deflect blame for the law’s problems onto his successors.
Personal responsibility, indeed.p> David Hogberg is a writer living in the Washington area. He also hosts his own website, Hog Haven. br> /p>
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