The Spectacle Blog

Romney Still Defending His Big Government Health Care Plan

By on 12.7.09 | 11:12AM

Currently, the only people left defending the Massachusetts health care reform are liberals who want to see Obamacare passed ... and Mitt Romney.

On Sunday, while the Senate debated a bill to have the government takeover the health care system, Romney went on CNN and argued that his state takeover of health care worked out quite well for Massachusetts. Asked by John King to respond to criticism offered by his likely 2012 presidential rival Tim Pawlenty about how spending exploded in Massachusetts after the implementation of RomneyCare, Romney responded:

I'm afraid facts are stubborn things, and the Massachusetts Taxpayers Foundation has taken a good look at the Massachusetts plan some three or four years after it was passed, and it is well within the original forecast. It's about -- a little over 1 percent of the state budget. And in fact, virtually all of our citizens are insured.

And there's an important difference between what we did and what President Barack Obama is proposing. Number one, we solved our problem at the state level. Let states deal with the problem of uninsured individuals.

And, number two, we have no public option. There's no government option. And what's primarily wrong with the president's plan is that he wants to get the federal government into the health insurance business. It's going to require massive subsidies, a trillion dollars of costs down the road.

That is not the right way to go. Instead, let states solve this problem and let them find their own plans. And by the way, if other governors can come up with something better than I did, congratulations. We'll copy one another. But the states should be the laboratories of our democracy, not a federal government, one-size- fits-all plan imposed by Congress.

This is problematic on so many levels that it's hard to know where to begin, so I'll just start with stubborn facts. As Cato Institute's Michael Cannon noted about that Massachusetts Taxpayers Foundation study Romney trotted out:

First, the “annual incremental cost” — $88 million — is not the total amount that the law added to the state budget each year, but the average increase from one year to the next. In other words, the total “cost from the state budget” in 2009 is not $88 million but three times that ($264 million).

Second, that average “incremental cost” assumes the state will cut payments to safety-net hospitals by $200 million next year. We’ll see about that. Safety-net hospitals are already suing the state for more money. Set aside those assumed savings, and the cumulative “cost from the state budget” for 2009 is actually $408 million.

On top of that, Romney keeps boasting that the problem with Obamacare is that it's federal, but his plan imposed costs on the federal government through the expansion of Medicaid, as Cannon reminds us:

But the larger problem is that the “cost from the state budget” ignores 80 percent of the total cost of RomneyCare. As Widmer explains, state officials only have to scrape up about 20 percent of total new spending themselves. The federal government — which is to say, taxpayers in other states — kicks in another 20 percent through the Medicaid program.

Yet this cost to the state and federal governments does not include the cost of the law on the private sector as individuals and businesses were forced to comply with a series of new mandates. "That brings the total cost of RomneyCare to at least $2.1 billion in 2009," writes Cannon.

And it's pretty absurd for Romney to argue that his plan wasn't a government takeover because there was no "public option." Even if you eliminate the public option, you're still left with legislation that forces individuals to purchase insurance or pay a tax, expands Medicaid, and provides subsidies for people to purchase government-designed insurance policies on a government-run exchange.

Romney is right about one thing. The states can be useful as laboratories of policy. Massachusetts has provided us with an example of a failed experiment in health care policy that should be a warning to all Americans as Democrats push to impose something similar on the rest of the nation.

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