Another Perspective

Romney’s Responsibility Principles

Should a Republican presidential hopeful be settling for less freedom, higher taxes, and more bureaucracy?

By 4.14.06

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Initially I was inclined to give Governor Mitt Romney the benefit of the doubt. In a scramble to have a major accomplishment he could tout in his run for the White House, he agreed to a bad piece of legislation that is supposed to reform health care in Massachusetts. But after reading his op-ed in the Wall Street Journal Tuesday, I'm feeling a lot less charitable. Instead of trying to play up some of its arguably market-based components, Romney spins it in a manner worthy of Bill Clinton.

Romney claims that his health care reform "will need no new taxes, no employer mandate and no government takeover [of health care]." The "no employer mandate" is a sop to those conservatives who opposed the now infamous Wal-Mart Law in Maryland. And now that Romney has item-vetoed the $295 penalty that a business must pay for each employee it doesn't insure, it is technically true that there is no employer mandate. It's also irrelevant, because the reform mandates that all individuals must purchase health insurance. For Romney to acclaim the lack of an employer mandate is like being in an area flooded by a river and hyping the fact that it wasn't hit by a tsunami.

Romney puts the best face on the individual mandate by claiming it is based on the "personal responsibility principle." Yet forcing individuals to make the right decision flies in the face of personal responsibility. Personal responsibility once meant that individuals were free to choose, but would suffer the consequences of choosing poorly. If an individual decided to forego health insurance and then got sick, he would be responsible for the cost. But in health care, as in so many areas these days, government shields individuals from such consequences by picking up the tab for uncompensated care. Thus, it should come as little surprise that policymakers feel they should have the power to compel people to buy insurance.

Yet Romney engages in some sleight of hand by suggesting that residents of Massachusetts still have a choice: "I proposed that everyone must either purchase a product of their choice or demonstrate that they can pay for their own health care" [emphasis added]. That implies that if a resident can show that he has enough money to cover major medical expenses, he is off the hook. The new law states otherwise. If a person does not show on his tax return that he has health insurance, then "the tax shall be computed on the return without benefit of the personal exemption." In other words, he must either buy insurance or face a tax penalty.

That provision also makes dubious Romney's claim that this reform was enacted with "no new taxes." So does the provision that imposes new taxes on services provided by acute care hospitals and ambulatory surgery centers to help fund something called the Health Safety Net Trust Fund. Perhaps those don't count as taxes since the law refers to them as "surcharges."

Equally hard to digest is his statement that the reform is not a "government takeover" of health care. If it's not a takeover, it is certainly a big expansion of government into health care. The reform creates 11 new councils, boards, commissions and bureaus. One of the new boards, the MassHealth Payment Policy Advisory Board, yields a sense of how much Romney gave away to the liberals in the state legislature. It must include a member appointed by the Planned Parenthood League of Massachusetts.

The law's creation of the Health Care Quality and Cost Council makes clear that it is state government, not the market, that will be steering the health care boat. The law states that the "council shall establish health care quality improvement and cost containment goals. The goals shall be designed to promote high-quality, safe, effective, timely, efficient, equitable and patient-centered health care." To track those goals, the Council can force insurers and health care providers to submit data to the Council. Those that fail to do so "may be required to pay a penalty of $1,000 for each week of delay" up to a maximum of $50,000. Furthermore, the Council will be able to micromanage the enactment of those goals:

The council shall develop and coordinate the implementation of health care quality improvement goals that are intended to lower or contain the growth in health care costs while improving the quality of care, including reductions in racial and ethnic health disparities. For each such goal, the council shall identify the steps needed to achieve the goal; estimate the cost of implementation; project the anticipated short-term or long-term financial savings achievable to the health care industry and the commonwealth, and estimate the expected improvements in the health status of health care consumers in the commonwealth.

Who said social engineering was dead?

Perhaps the worst feature of this law is the likelihood it will create a constituency for single-payer health care. The law subsidizes health insurance costs, on a sliding scale, for the working poor not eligible for Medicaid. But now that all residents of Massachusetts are forced to buy insurance, it seems likely many will think, "If the government is requiring me to purchase insurance, why shouldn't it subsidize me as well?" Such sentiment could lead to even greater government subsidy of health insurance. As government pays more of the cost, it inevitably leads to greater regulation. Greater regulation will lead to higher insurance costs. Higher costs will lead to even more calls for subsidy. If that vicious circle goes around enough times, Massachusetts may be the first state to have taxpayers fully fund health insurance.

Less freedom, higher taxes, more bureaucracy: Romney's reform moves Massachusetts further down the road toward HillaryCare. If conservatives don't want it repeated on the national level, they should cast a skeptical eye toward the Bay State governor as 2008 approaches.

David Hogberg is a senior research analyst at the Capital Research Center. He also hosts his own website, Hog Haven.

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David Hogberg is a senior fellow at the National Center for Public Policy Research.  Follow David Hogberg on Twitter.