RomneyCare –

I found this decided it was important to the election and Romney.  It answers questions and maybe answers yours.  It was posted in January 2012.

The Truth about Massachusetts Health Care

January 30th, 2012

1 – What is RomneyCare? Major accomplishments and a brief overview
2 – Did RomneyCare harm job growth in Massachusetts?
3 – Why the individual mandate?
4 – Is RomneyCare a “government takeover” of health care?
5 – Is RomneyCare bankrupting the state of Massachusetts?
6 – What changes would Romney make to RomneyCare?
7 – Was RomneyCare intended to be applied nationwide?
8 – Are health care premiums rising or falling in Massachusetts?
9 – What are the key differences between RomneyCare and ObamaCare?
10 – Ronald Reagan on RomneyCare??
11 – Additional resources on RomneyCare
12 – What is Romney’s health care solution for America today?

1 – What is RomneyCare? Major accomplishments and a brief overview

RomneyCare was the first significant healthcare reform to happen in the U.S. for decades.
The primary goal of RomneyCare was to provide all citizens in MA with access to affordable health insurance and to eliminate the “free riders” who expected the government or taxpayers to pay for their health care. The plan did an extraordinary job of covering nearly half a million people who were previously uninsured without raising taxes. Under RomneyCare, the citizens of MA can be assured that they will retain their health coverage when they move from job to job, or if they suffer financial hardship.
Highlights of what RomneyCare has accomplished after 5 years of being in affect:
1 - Nearly every Massachusetts citizen is covered. A recent study showed that 98.1% of adults and 99.8% of children now have medical insurance. This is by far the highest rates in the nation. The overall national rate is 83%, with Texas having the worst rates in the nation at 74%. In Texas, one out of every six children is uninsured.
2 - Many more businesses are offering medical insurance to their employees. Now 76% of employers of medical insurance to their employees, compared with 70% just five years ago. The national rate remained at 60%.
3 - The overall costs of the program to the state have not exceeded expectations. At the time of passage, Romney predicted that the new law would add just 1 to 1.5% to the state budget. Last year the additional cost to the state was only 1.2% – precisely where Romney predicted it would be even though the costs to the state would be much lower if the Massachusetts legislature and Governor Patrick (Romney’s successor) hadn’t added significant costs to the healthcare law. (This is covered more thoroughly in Section 6 – What changes would Romney make to RomneyCare?)
4 - The cost of health care premiums for individuals who buy insurance without the help of an employer have gone down dramatically. According to FactCheck.org, individuals who bought insurance on their own “saw a major drop in premiums, as much as a 40% decline, according to some figures.” On average, premiums dropped between 18%-20% for the average individual buying health insurance on their own.
5 - RomneyCare remains exceptionally popular among state residents. Studies repeatedly confirm that 67-84% of Massachusetts residents are happy with the plan and would not go back to the old system if given the chance.
The Creation of RomneyCare
Remember that the overall goal of RomneyCare was to provide all citizens with access to affordable health insurance and to eliminate the “free riders” who expected the government or taxpayers to pay for their health care. The plan did an extraordinary job of covering nearly half a million people who were previously uninsured without raising taxes.
In order to accomplish the goal of covering all the citizens of MA, Romney put together a team of business experts, not a typical political team, to explore new options for providing health insurance to more citizens. The members of this team included a former investment banker, a Bain & Company partner, a professor from MIT, an expert in federal health programs, a Washington policy guru, and experts from the Heritage Foundation. For more than a year, Romney and his team studied the details of health insurance in their state.
One of the most surprising things that the team discovered was that only 20% of the uninsured were truly too poor buy health insurance. This is a very important point because it had generally been assumed that all the uninsured fell into this category. 40% of the uninsured had the financial means to purchase health insurance but simply refused to do so. The last 40% of the uninsured were people who were able to partially pay for their insurance premiums, but could not afford all of it.
At the end of a year of research and being “immersed in the details” as Romney describes it, the team created a plan where all citizens of MA were required to purchase health insurance and the state would subsidize those who were too poor to purchase health insurance on their own. The plan would be paid for by simply redirecting money that was already allocated to pay for free-riders, and using that money to instead help those without any coverage to buy insurance. The subsidy for the poor was on a sliding scale where the poorest would get a greater percentage of money, and people received less and less of a subsidy as their incomes went up and they were more able to afford it on their own.
The plan was approved by two conservative Republicans who were secretary of the Health and Human Services Department under George W. Bush, Tommy Thompson and Mike Leavitt. Furthermore, the plan was supported overwhelmingly in the MA legislature with 198 house reps supporting the bill and only 2 voting against it – 99% voting in favor of the plan! The bill also passed through the state senate without a single dissenting vote and it was supported by nearly every special interest group in the state. (As of September 2011, 33 of the 36 Republicans in the MA legislature endorsed Romney for president further illustrating the sustained support for Romney and his tenure as Governor of MA.)
Physician and New York Times bestselling author Atul Gawande wrote in The New Yorker magazine on January 26, 2009 that the plan “remains extremely popular” among the citizens of MA and that “a large majority would not want to go back to the old system.” Recent polls show that 84% of MA residents are satisfied with the plan!
RomneyCare provides the citizens of Massachusetts better access to healthcare and ultimately healthier, longer lives. The plan provided healthcare that is both portable and affordable, something that people have been trying to achieve about for decades.

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2 – Did RomneyCare harm job growth in Massachusetts?

No. Numerous sources state that Massachusetts is currently growing jobs faster than 44 other states. Deval Patrick, the current governor of Massachusetts, revealed in an interview on Sept. 2, 2011 that the unemployment rate in MA (at 7.4%) is well below the national average (of 9.1%) and still going down. MA also ranks “fifth or sixth” in the country as the best state to do business. So did RomneyCare harm job creation in MA? No. Five years later job growth is very strong, better than the mcuh of the country in fact, and unemployment is considerably lower than the national average and continues to decline.
FactCheck.org also looked into the claim that RomneyCare harmed job growth. Their conclusion: “There is no evidence to conclude that Massachusetts health reform has cost jobs.”

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3 – Why the individual mandate?

These days many conservatives dislike the use of a healthcare mandate to expand insurance coverage. But it wasn’t always this way.
In fact, the very idea of an individual healthcare mandate originated from the conservative think-tank The Heritage Foundation. But don’t take my word for it, read about it here.
Moreover, many prominent conservatives have supported the use of the individual healthcare mandate. Some noteworthy conservatives who have supported individual healthcare mandates are:
-President George H. W. Bush (source 1 and source 2)
-Speaker Newt Gingrich R-GA (source)
-Senator Orrin Hatch R-UT (source)
-Senator Charles Grassley R-Iowa (source)
-Senator Bob Bennett R-UT (source)
-Senator Christopher Bond R-Missouri (source)
-Senator John Chafee R-RI (source)
-Rep. Bill Thomas R-CA (source)
-And at least 16 other GOP Senators who have since retired from the Senate (source)
Actually, in 1993 when then-President Clinton was attempting to reform healthcare, Republicans who opposed Clinton’s idea of an employer mandate, supported the idea of an individual mandate. An individual mandate, the Republicans argued, would be a “free-market solution” to reform healthcare, part of a “social contract” that would help people take responsibility for themselves and avoid the immorality of freeloading off the government. Clinton’s plan, on the other hand, was seen as a “true government take-over” of healthcare, the worst form of the dreaded “socialized medicine.”
In fact, when Romney signed the Massachusetts Healthcare Law in 2006, it was touted by many healthcare experts, and media outlets as a “conservative answer” to the healthcare crisis.
My favorite quotation on how Romney’s plan was initially considered conservative, is given by renowned Harvard healthcare expert, Regina Herzlinger, in her new book Who Killed Healthcare? published in 2007. In her book, Herzlinger states:

“A bizarre 2006 photograph shows Senator Edward (Teddy) Kennedy (D-Massachusetts) uncomfortably smiling while standing in back of seated Republican MA Governor Mitt Romney as he signed the new healthcare legislation. Romney achieved what he wanted, consumer-driven healthcare solutions.”

Romney is occasionally asked by the more conservative/libertarian voters, why he used an individual mandate. Romney replies:

“The key factor that some of my libertarian friends forget is that today, everybody who doesn’t have insurance is getting free coverage from the government. And the question is, do we want people to pay what they can afford, or do we want people to ride free on everyone else. And when that is recognized as the choice, most conservatives come my way.”

To Romney, the mandate that all individuals buy health insurance represented the conservative ideal of personal responsibility. Romney believed that whenever possible, individuals should take care of themselves, and not rely on the government for assistance. Too many people had been receiving “free” health care from the government even though many of those individuals could afford to pay for it themselves.
So why does the individual mandate work in MA but may not work in other states? Several reasons:
1 - Debt levels vary greatly state to state. Some states, such as California, are facing crushing budget crisis that simply won’t have room for new spending required by Obamacare without cutting spending to other vital areas. Massachusetts could afford the small increase in budget expense because Romney balanced the state budget before implementing RomneyCare. Balancing the budget shows fiscal responsibility on Romney’s part before introducing any new laws that may affect spending. (Obama did no such thing.)
2 - Romney took time to build a consensus of approval in the state before passing the new law. Polls show that Romneycare still remains very popular in MA to this day. Again, Obama did no such thing. A consensus of approval is vital to the success of any major reform.
3 - RomneyCare works well in MA because, even before the law was passed, the state had a very low rate of uninsured residents, the lowest in the nation in fact. Other states with high uninsured rates (such as Texas, New Mexico, California and Arkansas) will have a much more difficult time insuring all their citizens due to the dramatic increase in costs. These states will be forced to cut spending in other vital areas of the budget (such as education) in order to implement Obamacare.
Should the federal government implement a nation-wide individual mandate to buy insurance? No! First of all the constitutionality of such an action is highly questionable (the Supreme Court will be ruling on the in June of 2012). But more, consider the different states and their varying levels of debt. How can one state that is nearly bankrupt, such as California, be expected to expand its healthcare entitlements to the large degree that ObamaCare requires? A recent letter by 33 governors to President Obama shows the displeasure they share concerning the costly implementation of ObamaCare, and how it will force them to make cuts in others vital areas of the budget:

The effect of the federal requirements is unconscionable; the federal requirements force Governors to cut other critical state programs, such as education, in order to fund a “one-size-fits-all” approach to medicaid.

Furthermore, health care has traditionally been a state issue, not a federal issue. Traditionally, each state has had the right to adopt whatever health care laws best fit the needs of that particular state. But ObamaCare usurps most of that power from the states and instead gives it to the federal government. Under ObamaCare, states have very little room to experiment and design their own unique plans. Romney wants to give that power back to the states.

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4 – Is RomneyCare a “government takeover” of health care?

Absolutely not. A true government takeover is where the government owns and controls the insurance companies and hospitals. Countries with socialized medicine, such as Canada, France, and Britain, have government-run insurance plans and hospitals. In countries with socialized medicine, where the government has “taken over” the healthcare industry, private companies play a very small role in the overall healthcare industry. The government is largest provider of healthcare services to its citizens.
RomneyCare is nothing like socialized medicine or a government takeover. In fact, Romneycare empowers and strengthens the private market by requiring people to purchase health insurance plans from private insurance companies, and there is no government plan or public option. It is significant to note that nearly all major private insurance companies and hospitals supported Gov. Romney’s healthcare bill in 2006. Also, according to FactCheck.org, some of the most strident critics of Romney’s plan are the groups that support socialized medicine.
A prominent surgeon and New York Times bestselling author, Atul Gawande, wrote a piece for The New Yorker magazine on Jan. 26, 2009 which states:

Massachusetts, where I live and work, recently became the first state to adopt a system of universal health coverage for its residents. It didn’t organize a government takeover of the state’s hospitals or insurance companies, or force people into a new system of state-run clinics. It built on what existed. Repeated surveys have found that at least two-thirds of the state’s residents continue to support the reform.

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5 – Is RomneyCare bankrupting the state of Massachusetts?

Not at all. Numerous unbiased organizations such as FactCheck.org and The Massachusetts Taxpayers Foundation – a think tank funded by business – determined that the cost of Romneycare is “relatively modest” and “well within initial projections.” FactCheck.org also concludes “Claims that the law is bankrupting the state are greatly exaggerated.” Massachusetts Taxpayers Foundation goes on to say:

“Despite claims to the contrary, the Foundations recently released analyses of the cost to taxpayers of achieving near-universal access to healthcare showed that the average yearly increase was only $88 million, well within original estimates. Critics ignore the fact that the fundamental problem is not the costs of Romneycare but rather the unprecedented collapse of state tax revenues.”

The Boston Globe also quotes Jay Gonzalez, who is Massachusetts secretary of administration and finance, as saying “This law has not come close to breaking the bank.”
(More relevant info from the Massachusetts Taxpayer can be found here and here.)
Moreover, recent studies show that RomneyCare actually slowed the growth of health care spending in the state of Massachusetts. Here is a quotation from the study:

Perhaps in part due to the recession, the rate of growth for health-care spending dropped for the nation as a whole (though spending did still grow).  However, it’s worth noting that, in the years after Romney’s reforms went into effect, the rate of growth for health-care spending in Massachusetts dropped even faster than the national average did.  Between 2004 and 2006, health-care spending in Massachusetts grew almost 27% faster than it did for the nation as a whole; between 2007 and 2009, it grew only 5% faster.  After Romney’s reforms, Massachusetts went from having a health-care spending growth rate well above the national average to one just a little bit above. Situating Massachusetts in the context of the rest of New England makes the change in spending rates even starker: prior to Romney’s reforms, Massachusetts personal health-care spending grew faster than the New England average most years.  After his reforms, it grew slower than the New England average (often having one of the lowest rates of health-care spending growth in the region). 

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6 – What changes would Romney make to RomneyCare?

Governor Romney is often asked what he would change about RomneyCare, or what he would have done differently. Romney’s first response is “I would re-institute my vetoes.” Many voters don’t realize that Romney vetoed significant portions of the bill in an attempt to control costs and unnecessary regulation. Unfortunately, all of Romney’s vetoes were later overridden by the Massachusetts legislature which was 87% Democrats at the time. Here is a list of provisions that Romney vetoed, or things he would otherwise change:
1 – The item Romney most vigorously opposed was the “Employer Mandate” which required that all businesses with 11 or more employees provide health insurance to those employees. In his view, an employer mandate was an unnecessary burden on businesses in the state. Romney believed that the employer mandate would harm low-profit-margin businesses (such as new or struggling businesses) and that it could reduce wages, or distort employment patterns.
2 – Minimum Coverage Options - Romney wanted a “higher deductible” option of health insurance that would pass the state’s “minimum-coverage” guidelines. Romney wanted to give the citizens of MA the option to buy a bare-bones policy that covered only hospitalization and catastrophic illness. That idea was rejected by the legislature. Instead the legislature mandated benefit-rich insurance plans (also called “gold-plated” insurance plans). “We wanted no mandated benefits,” Romney said in a recent interview. Imagine the additional cost imposed on the state and the individual by mandating these benefit-rich insurance plans.
3 – Romney also objected to the state’s “minimum-coverage guidelines” not only because it required expensive features that only a few people would use but also because some people would morally object to certain provisions such as “unlimited in-vitro fertilization” and abortion. Romney believed that consumers should be free to choose a healthcare plan with the benefits they wanted, not be dictated by the government what features their healthcare plan must contain. (source – No Apology, paperback edition, pg. 194)
4 – Romney vetoed coverage of dental care, and optical care for Medicaid participants. Romney noticed that 60% of employers who offered health insurance didn’t offer dental/optical benefits. Providing dental/optical benefits seemed unfairly generous and extremely costly. Romney estimated that the dental/optical insurance costs for Medicaid patients would add an additional $75 million per year, an exceedingly large amount.
5 – Opt out option - Romney wanted to have a way for people to be able to “opt out” of the insurance mandate if an individual could show that they had sufficient money to pay for catastrophic care. One could opt out of the mandate by posting a bond – essentially a promise to pay for future uninsured health care costs. The principle of being able to opt out of the mandate mattered to Romney. Despite arguing in favor of an opt out option, the Democratic legislature rejected the idea.
6 – Romney wanted to control costs by having everyone, even the poorest of citizens, pay some portion of their premiums for their health insurance. But the current law gives it to the poor absolutely free. Romney also argues that giving healthcare absolutely free to poor citizens creates a strong incentive for people – particularly the unhealthy – to move into the state. Imagine the increased costs “free” healthcare creates for the government. (Additional source – No Apology, paperback edition, pg. 194)
7 – Romney vetoed a medicaid expansion for children that was added to RomneyCare by the Democratic legislature. Romney vetoed the provision due to cost constraints but the veto was also overridden.
8 – Romney vetoed coverage for non-poor legal immigrants called “special status aliens.” This group of individuals were legal immigrants who had come to America with the sponsorship of an individual who agreed to be financially responsible for them. Romney thought the state should take into account the financial status of the sponsor before offering coverage. It is interesting to note that even though the MA legislature initially overturned Romney’s veto, the MA legislature later re-institituted this policy by giving reduced subsidies to legal immigrants as costs for the health care law increased.
9 – In order to increase choice and competition, Romney fought for a plan that would have allowed employees to use their employers funds to buy health insurance on the open market. According to this plan, an employee wouldn’t have been locked in to using their employers health plan. Employees could choose any plan from any insurance company that best fit their needs, and then use their employers funds to help pay for it.
10 – Romney would also have rather provided a tax break for those who have health insurance rather than a tax penalty for those without health insurance. Both would have provided the same mathematical incentive to become insured. (Source, No Apology, pg. 194)
11 – After RomneyCare was passed, Romney’s successor, Governor Patrick, set the state’s share of the premiums above a level Romney thought was affordable. Those who received subsidies on their health insurance, now could rely on the government to pay a bigger portion of their premiums. (source – No Apology, hardback edition, pg. 175)
12 – Gov. Patrick also added an expensive prescription drug benefit after Romney had left the governorship.
13 – Romney also supports the need for patients to provide documentation to insurance companies of prior coverage in order to be insured. There have been reports of people “gaming the system” and not signing up for health insurance until they are sick or the state tax filings are due. A simple way to avoid such a problem is by requiring patients to show evidence of prior coverage.
14 – Emergency Room Visits - In Massachusetts (as in other states), too many people continue to go to the Emergency Room for simple problems that could be easily treated by their family doctor. The problem with going to the ER is that it cost 3-5 times as much for the same care. Romney supports taking steps that encourage people to go to their family doctor first, such as raising the co-payment charge on ER visits in order to dissuade people from using the ER as a way to get primary care. (Source, No Apology 2nd edition,)
In summary, Romney fought for a health care system with less regulation, more competition, and less cost to the state, individuals and businesses. It is important to note that all of these modifications to RomneyCare made by his successor and the MA legislature have had a major impact on costs. Were Romney a part of the implementation of the bill, and were his vetoes not over-ridden, the law would be considerably different today, and the state would stand to save a lot of money.

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7 – Was RomneyCare intended to be applied nationwide?

The Massachusetts health care plan was designed for Massachusetts. It is not for every state and not for the nation as a whole. RomneyCare was designed as a unique solution to a one state’s problems. Most experts agree that Massachusetts had two unique elements, its funding sources and political culture, which made it possible for RomneyCare to be implemented.
Funding of RomneyCare
In regard to funding, Massachusetts has access to a large amount of extra funds for its health care program that other states simply do not have. For example, according to the Boston Globe newspaper, MA received an additional $385 million per year of extra health care funds from the federal government that no other state received. MA was given these extra funds from the federal government as an experiment to extend coverage to the working poor long before Romney became Governor. Michael Widmer, president of the fiscally conservative but nonpartisan Massachusetts Taxpayers Foundation, said “Unquestionably the federal dollars helped. There were very unique circumstances here.”
An additional source of funding for RomneyCare came from the “uninsured pool,” a pool of funds set aside every year by the state of MA for the sole purpose of coverning costs incurred by uninsured citizens. The state had created the uninsured pool to reimburse hospitals and doctors for the care they provided to uninsured citizens who were unable to pay for the care they received. According to the Boston Globe, MA was one of only a few states that already had a pool of funds set aside to pay for the costs of the uninsured. Every year, the state of MA paid between $656 million for this uninsured pool. When you combine the $385 million of federal funds, and the $656 million in the “uninsured pool,” one realizes that MA had a very large source of previously existing funds (over one billion dollars) to re-purpose in order to implement a new health care system – a situation unique to the state of Massachusetts.
Romney’s idea was to use that extra billion dollars that the state was spending to provide free health care for the uninsured, and use that money to instead help the uninsured buy health coverage. (As a side note, this is one of the reasons why ObamaCare will raise taxes by over half a trillion dollars, because most states don’t have the per-existing funds that were available to MA.)
One final point in regard to the unique situation of MA is that the state already had a very high rate of citizens with health insurance. In fact, only 7.7% of MA residents did not have health insurance when RomneyCare was passed. Because so few residents were uninsured, the cost to subsidize the premium for the poor is vastly lower than other states such a Texas and California This is one of the reasons that Romney says in his book “From the outset, we cautioned that what worked in MA would not work in other states like California and Texas.”
The Political Culture of Health Care Reform in Massachusetts
Another asset that MA possessed compared to other states is the political culture. According to the Boston Globe, MA is a place where “the dream of universal health care had long abided. Due to the states liberal political culture and prestigious teaching hospitals, medical schools, academics, and researchers, the Bay State has long been an incubator for innovations in health care and related policy.”
Ted Kennedy, the previous Senator from MA, had frequently expressed that it was his dream to obtain universal health care coverage. Michael Dukakis, a former MA governor and the 1988 Democratic presidential nominee, pushed for universal health care by requiring that all employers provide health insurance to their employees. In the end, Dukakis’ health care reform failed because of strong business opposition to the employer mandate which contained a steep fine of $1,700 per employee if a company didn’t provide health insurance.
Business leaders in MA were generally supportive of expanded health care coverage as good business practice and a quality of life issue. FactCheck.org states that there was “very little outcry” from employers in the state and that business support “is one of the most unknown, ignored elements of health care reform, and yet one of its key building blocks. It is sort of a culture in Massachusetts, competitively. Businesses see offering health care coverage as a way to attract employees. Health care is part of what your compensation is.”
Strong grassroots support for universal health care coverage also existed in the state prior to the passage of RomneyCare. In the year 2000, a statewide ballot question that would have started the process of universal health care by mandating that all employers offer health insurance lost by a mere 96,000 votes out of 2.6 million cast. That means the ballot question only lost by 3.7%. The closeness of the margin alarmed health care industry leaders who had spent huge sums to defeat it.
In summary, RomneyCare was brought about due to its unique funding abilities and the strong political culture for health care reform in MA. All of the above points illustrate that Massachusetts was uniquely positioned to implement health care reforms. Romney understands that many other states simply don’t have access to both of these resources in order to implement RomneyCare and therefore it would be unfeasible for them to do so.
Interviews with Romney About Expanding RomneyCare to Other States
One of the best ways to see if Romney intended for RomneyCare to be adopted nationwide is to read interviews of Gov. Romney right after the health care law was passed in 2006. One such early interview was on NPR on April 8, 2006 where he said this:

Q: Stepping back, what impact do you think this will have outside Massachusetts? A: Around the country, people are watching because they know this is big. Some on the far left don’t like it because it’s not a single-payer universal coverage program. Some on the far right don’t like it because they don’t like government telling people that they need to get insurance. But the great majority of people, both on the left and the right, believe that this is a step forward.
Q: Can this model be used in other states? A: My guess is a lot of states will choose to adopt one or another of the measures we’ve put in place here. But most will give it a little time and watch to see what our experience is. That’s the great thing about having 50 states and the principle of federalism. Let us experiment ourselves. Let us learn from one another.

The chief political correspondent of The Washington Examiner, Byron York, summarizes Romney’s many interviews on the subject and says this:

On many, many occasions, Romney said he believes Romneycare is a model for some states to follow but would not be a model for all states and certainly not for a federal plan.
I think it’s a great plan, but I’m a federalist,” Romney said on “Meet the Press” in December 2007. “I don’t believe in applying what works in one state to all states if different states have different circumstances.”
In that 2007 interview, Romney pointed out that a relatively small number, 7 percent, of the Massachusetts population was uninsured. “Texas has 25 percent,” he said. “Given the kind of differences between states, I’m not somebody who is going to say, ‘What I did in Massachusetts I’m going to now tell every state they have to do it the same way.’”
But as much as he stressed federalism, Romney also stressed that he would be happy to see many states adopt his plan. “I think it’s a good model for other states,” he continued. “Maybe not every state but most.” At the federal level, Romney said he would “give every state the same kind of flexibility we got from the federal government.” That’s the Romney position, then and now.”

Note that Romney emphasizes that states will learn from one another and adopt whichever policies would work best for their state. States are free to accept or reject the policies passed in Massachusetts. Romney certainly never intended for RomneyCare to be adopted as a federal plan imposing a federal mandate upon the states to implement RomneyCare.

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8 – Are health care premiums rising or falling in Massachusetts?

The cost of premiums has gone down dramatically for individuals who buy their own insurance without the help of an employer. According to FactCheck.org, individuals who bought insurance on their own “saw a major drop in premiums, as much as a 40% decline, according to some figures.” On average, premiums dropped between 18%-20% for the average individual buying health insurance on their own. Helping individuals obtain more affordable health insurance has been one of the great success stories of RomneyCare.
How about families and businesses? According to FactCheck.org, “the evidence is conflicting: Massachusetts premiums rose faster for those groups than the national average, but the same data show that 19 other states had larger increases, including the nearby states of Vermont and New Hampshire.” That means that almost half of the United States had premiums rise faster than Massachusetts. A health care economist at MIT, Jonathan Gruber, says that “statistically, there is no evidence that MA is particularly different than the other states in regard to premium cost increases.”

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9 – What are the key differences between RomneyCare and ObamaCare?

It is often asserted that RomneyCare is the same thing as ObamaCare, but this is simply not true. While there are similarities, there are also key differences. Below is a table of differences between the Romney plan and the Obama plan.

	RomneyCare	ObamaCare
Overall Size and Scope	-Whole bill was 70 pages -Romney vetoed significant sections of the bill including the employer penalty for not providing health insurance -Romney favored an “opt out” provision from the mandate -No federal gov. insurance option -Intended as a market driven solution to healthcare	-Whole bill was 2,074 pages -Very broad regulation of the insurance industry including an employer penalty for not providing health insurance and no “opt out” provision -Leaves open the option of creating single-payer gov. insurance in the future -Intended as a step toward gov. run insurance
Costs	-No new taxes! -Romney balanced the state’s budget first, then passed healthcare law -No cuts to Medicare benefits -Modest cost to state (only added 1% to state budget)	-Increased taxes by $500 billion -Despite massive federal gov. debt, Obama still passed Obamacare -Cuts Medicare by $500 billion -Overall costs unknown!
Popularity	-Very strong bipartisan support -Strong special interest support -Very popular among the public in Massachusetts -Strong consensus of approval was built in the state to support the law -Consensus was built to support an individual mandate	-Absolutely no bipartisan support -Very controversial and divided special interest groups -Unpopular in nation overall -No consensus was built to support a mandate
Constitutionality	-Constitutional -Regardless of how the Supreme Court rules on Obamacare, Romneycare will remain constitutional	-Potentially unconstitutional -Supreme Court has yet to rule on 10th amendment limitations of federal gov. power in regard to this law
Federalism	-A state solution to a state problem -Through collaboration and discussion, Massachusetts created a consensus among stake holders to support the new law	-Federal gov. “one-size-fits-all” plan -Doesn’t take into account that each state is unique in important ways such as: 1)Vastly different debt levels between states (some states can’t afford new spending on health care) 2)Some states have three times the percentage of uninsured citizens (Much greater costs will be imposed on states with a larger percentage of uninusured citizens) 3)Conservative states will reject implementation of federal gov. plan.

As the above table illustrates, the plan Romney proposed was a much more conservative, business friendly law than what the Democrats passed under President Obama.
The Boston Globe editorial board recently published an article defending RomneyCare on conservative grounds. The editorial board states “the role Romney played on the state level was skillful, creative, and business friendly. Romney was a governor sensitive to business concerns and worried about the state’s business climate.”
In 2006 when RomneyCare was passed, most conservatives praised Romney’s plan. The Bush administration sent a letter praising the passage of the new law. An often overlooked fact is that without the support of the Bush administration, Romney’s health care law never would have become a reality.
One of Romney’s main goals in passing healthcare legislation was to counter many much more liberal attempts within Massachusetts to take over the healthcare system. The Boston Globe newspaper discusses in detail one plan that Romney feared would become law if action was not taken. That plan was the imposition of a payroll tax of up to $1,700 per employee on all businesses that did not offer health insurance to their employees. It was a serious threat. The plan had been voted on in the year 2000 and the law barely failed by 3%. In 2006 the employer mandate coupled with a heavy payroll tax was to be voted on again.
In regard to ObamaCare, Romney firmly believes that each state should have the right to craft its own health care program. Health care has traditionally been a state issue, not a federal issue, and Romney wants to keep it that way. In his book, No Apology, Romney states:

“My own preference is to let each state fashion its own program to meet the distinct needs of its citizens. States could follow the Massachusetts model if they choose, or they could develop plans of their own. These plans, tested in the state ‘laboratories of democracy,’ could be evaluated, compared, improved upon, and adopted by others.”

In keeping with the belief that states should be able to craft their own programs, Romney has said that on his first day as president, he would issue a waiver to all 50 states allowing them to opt out of ObamaCare. This waiver would allow states to postpone the implementation of ObamaCare while Romney works with congress to formally repeal the bill.
In conclusion, a recent article in The New Yorker magazine states that “Romney had accomplished a longstanding Democratic goal – universal health insurance – by combining three conservative policies.” In other words, Romney had beaten Democrats at their own goal of providing universal health insurance – but Romney’s novel approach accomplished this goal not with a government takeover, but with conservative principles. The success of Romney’s healthcare law led many Democrats to consider adopting a similar approach to achieving universal health insurance. However, the end result from the Democrats under President Obama was a plan with a much larger government, much greater spending, increased taxes, and less power to the states and individuals to determine their own health care goals.

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10 – Ronald Reagan on RomneyCare??

OK, OK, Ronald Reagan died two years before the passage of RomneyCare, so Reagan never said anything about RomneyCare. But I recently came across a letter written by Ronald Reagan on Nov. 13, 1979 where Reagan says he is considering a plan very similar to RomneyCare. Take a look. (This letter is found in the book, Reagan – A Life in Letters, page 344, compiled by Kiron Skinner).

[...]
Regarding national health insurance, you could reassure your student, Miss Lee Catcher, that while I am opposed to socialized medicine, I have always felt that medical care should be available for those who cannot otherwise afford it. I have been looking into a program whereby government might pay the premiums for health insurance for those who cannot afford it and, at the same time, make such premiums for others a tax credit or deduction, preferably credit to encourage more use of private health insurance. There is also the problem of insurance for those catastrophic cases where the medical care goes on for years at a tremendously high cost. I proposed a form of government insurance for that in California when I was governor, but we couldn’t get any legislative support for it. I do believe this is a particular problem which must be faced and where the government could have a hand.
I hope you have a very happy holiday season.
Best regards,
Ronald Reagan

It is intriguing that Reagan himself was considering a plan where the government subsidizes the premiums for citizens to buy private health insurance. That is RomneyCare at its core; help those who cannot buy insurance by having the government pay all or part of their premiums, thus encouraging people to use private health insurance companies and not government health insurance. I find the two plans remarkably similar. Would Reagan have liked every aspect of RomneyCare? Probably not (and neither did Romney), but the core of RomneyCare, where the government helps citizens buy private insurance by paying for their premiums, is undoubtedly something Reagan would have been very supportive of.

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11 – Additional resources on RomneyCare

-FactCheck.org did a very thorough investigation into RomneyCare. Read it here. (For those who may not know, FactCheck.org is a non-partisan institution that produces high quality research on candidates claims to verify the truthfulness of each claim.)
-The Boston Globe recently produced a two-part summary of RomneyCare. Part I (here) is a very interesting article that discusses the passage of RomneyCare, and Part II (here) presents a detailed summary of what RomneyCare has accomplished.
-A book entitled Who Killed Health Care? by Regina Herzlinger provides an excellent summary of RomneyCare. Herzlinger is a health care policy expert at Harvard Business School.
-Gov. Romney’s book, No Apology, is a great resource for anyone seeking more information on RomneyCare.
-Our issues page about a Romney and Health Care Reform
-The actual bill of RomneyCare is available online from the Massachusetts legislature, here.

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12 – What is Romney’s health care solution for America today?

Governor Romney understands that there is no easy fix for America’s healthcare crisis. The healthcare crisis is so complicated and enormous, that there is no one simple change, or “magic bullet,” that is going to easily solve our healthcare problems. Romney states that “given the magnitude of the healthcare crisis America faces, small measures simply will not get the job done.” What is needed is a fundamental restructuring of the healthcare market.
Unlike many Democrats, Romney believes in free market solutions to solve this problem. A government takeover of healthcare or more regulations of the healthcare industry will be counterproductive and inefficient.
In regard to Medicare, Romney proposes that seniors should have the option of choosing between traditional Medicare, or using government vouchers (called “premium support”) to help purchase insurance plans through other private health insurance companies. These vouchers would provide a level of support that ensures all can obtain the coverage they need. Such a plan would give seniors more options to buy health insurance, increase competition in the marketplace, and allow seniors to pick a plan uniquely designed for their individual situation. If insurance companies are given the option of competing for seniors, then competition will ultimately provide better quality at lower cost.
David Brooks, a conservative columnist from the New York Times, recently praised Romney’s Medicare plan saying: “Romney’s Medicare proposal exemplifies the sort of big reformist vision that should be at the center of a serious Republican campaign.” Dealing with Medicare is one of America’s greatest financial challenges. One amazing fact that most Americans do not know is that currently the federal government spends more on health care than it does on national defense! Medicare spends a massive sum of money and is a true “budget buster” for the federal government, and yet, also a vitally important and indispensable program for Americans. Romney wants to protect Medicare, improve the program, and keep it sustainable for generations to come. Given Romney’s extensive background in turning around troubled programs, and his experience working in the health care industry, we believe Romney is the candidate most capable of solving America’s health care crisis.
Here is a list of other items Romney discusses in a recent speech and in his book, No Apology, that will help ameliorate America’s healthcare crisis for those not yet eligible for Medicare:
1 – Give tax deductions for purchasing health insurance to individuals who don’t have access to employer health insurance - Romney believes that individuals should be able to have the same tax advantages as an employer when purchasing health insurance. It isn’t fair that an individual be penalized with higher rates for health insurance simply because his/her employer doesn’t provide it. Such a penalty dissuades many from buying insurance when it is not offered by their employer. Romney wants to level the playing field so everyone gets equal tax treatment. Also, such a plan would give consumers a choice of accepting their employers plan or purchasing insurance on their own on the open market. If the tax incentives are the same, this would increase competition among insurers and allow individuals to pick a health plan more suitable for their needs.
2 – Allow people to purchase health insurance across state lines – This will increase competition and decrease monopolies of health insurers. It is interesting to note that current law in the U.S. actually allows for insurers to have a monopoly over a given region of the country. These monopolies need to end in order to let the free market work more effectively to lower health care costs. (Source, No Apology, pg 177.)
3 – Allow Individuals to form “purchasing pools” - Currently individuals not part of an employers group are penalized with much higher insurance premium costs. Individuals who currently don’t have the option to buy insurance through their employer are forced to buy a single policy on the “open market” which is much more expensive. Allowing individuals to form purchasing pools would give consumers a lower price for health insurance and more choice of healthcare plans. No longer would an individual have to take their employers health insurance if they didn’t like the plan offered by their employer. Individuals could choose to shop for insurance on their own with a purchasing pool that would have the similar tax advantages and discounts as their employer.
4 – Encourage a “Consumer Reports” style ratings system for insurance companies – Currently it is very difficult to compare one insurance company with another. Consumers need to have access to a ratings system in order to be better informed. For example, if a particular insurance company has poor customer service, a small network of doctors, has a habit of declining coverage of certain medical procedures, or simply mistreating their clients, then the public has a right to know. Currently there is no way consumers can discover which companies are truly providing the best customer service or value for their dollar. Romney wants to change that and make the insurance companies more accountable to how they treat their customers. In a similar vein, hospitals would have a rating system in order to establish cost and quality comparisons for the public. Romney knows from his days at Bain and Company when he advised hospitals that some hospitals charge exorbitant rates but have similar quality results when compared to other hospitals in the same area.
5 – Modify health savings accounts – Allow consumers to use HSA savings to pay health care premiums! It’s hard to believe that laws regulating HSA’s currently don’t allow consumers to pay insurance premiums with their HSA, but they do not. This simple change would have a profound impact for millions of Americans. On a different note, HSA’s help form cost-conscious consumers and motivate consumers to shop around for the best “deal” at the best price. HSA’s would get healthcare working more like a market. The current healthcare market, is really not a “market” at all because patients have very little incentive to price-compare, and find higher quality at lower prices.
6 – Reform medical malpractice – The American Medical Association reports that $200 billion per year is spent by doctors and hospitals practicing “defensive medicine.” “Defensive medicine” is the extra tests, visits and procedures that a doctor must do to make sure he/she won’t get sued for malpractice. In our “sue happy” society, doctors are forced to run extra tests and procedures that to avoid lawsuit. This is a horrible waste of resources. Romney states that in the regions where medical malpractice reform has occurred, the costs of healthcare have indeed gone down. Romney mentions three specific types of malpractice reform that would have the greatest impact on costs 1) limit non-economic damages 2) assign malpractice cases to special health care courts, and 3) awards for medical malpractice should be given according to a per-determined schedule. Obamacare didn’t touch this aspect of reform because of the heavy donations Democrats get from trial lawyers. (Source, No Apology, pg. 181)
7 – Implement a “Co-insurance system” – With a co-insurance system, patients pay a percentage of the entire bill. This gives patients more “skin in the game” and more of a reason to seek out quality medical care at the lowest possible prices. An important caveat to the co-insurance system is that there must be an “upper limit” on the out of pocket expenses a patient is expected to pay. (Source, No Apology, Pg. 187)
8 – Implement a “single-fee system” – Currently, we have a “fee-for-service” system where each visit to the doctor’s office calls for a new charge to the patient. Romney believes that such a system encourages doctors and hospitals to require patients to return for follow-ups and check ups too often, thus increasing the doctors/hospitals revenue. A single-fee system would pay doctors/hospitals a lump sum for a particular ailment, but no extra cash for follow-ups or extra testing/procedures. Such a plan would encourage doctors not have the patient return so often for care. Romney frankly admits that this system needs to be more fully developed, but that it can be used successfully to reduce overall costs of health care. One example of a company that has successfully used the “single-fee” system is Intermountain Health Care (IHC) in Utah which boasts of having some of the lowest health care costs in the country.
9 – Mimic Successful Health Insurers such as IHC, Mayo Clinic, and Kaiser Permanente - Mimicking these companies is one of the most encouraging aspect of Romney’s proposals because these companies show that real cost reduction is not just theoretical, but actually possible. These health insurers have found a way to deliver care at much lower costs than the nation overall. Many of these companies have costs of up to one-third less than the national average!
10 – Give Block Grants to States for Medicaid – Romney wants all states to have the same flexibility as he had when he crafted the Massachusetts health care plan. Providing block grants from the federal government to the states would reduce federal regulations on how medicaid funding can be used by the states. Currently, there are many restrictions placed on states regarding how each state is allowed to use federal money to provide health care. By providing block grants, states would have in more room to experiment and craft their own unique healthcare solutions. One additional benefit of block grants is that these grants would make it so that medicaid would no longer be an “open checkbook” on the federal government.
11 – Provide “Innovation Grants” to States for Reform - Innovation grants would be extra funding used by the states for the development of unique healthcare reforms. These grants would be competed for by different states. Romney envisions these grants as the “carrot” that will entice states to begin reforming their healthcare systems, rather than the “stick” of federal laws that forces states to reform or face a penalty. Obamacare currently uses the “stick” approch rather than the “carrot.”
12 – Implement Electronic Health Records - Romney disagrees with many proponents of EHR who say that this is a virtual panacea for reducing healthcare costs. Romney believes that this will help lower costs but has to be implemented with all other aspects of healthcare reform otherwise it will not have a large impact on cost savings. Romney envisions an interconnected EHR system that physicians all across the country would have access. Such an interconnected system would help decrease duplicate testing and promote better coordination between doctors.
13 – Encourage Americans to have healthier lifestyles - The problem with healthcare costs is not just the system, but the American culture. The high fat western diet coupled with a generally sedentary lifestyle are unhealthy and cause overall expenses in healthcare to increase. Any discussion of healthcare costs would be incomplete without mentioning that individuals have to live healthy lifestyles in order to control the costs of healthcare.
14) Change financial incentives – This is the most important aspect of meaningful reform. Currently, the financial incentives in the healthcare market are all wrong. Our current market encourages overuse and expensive treatment options. There is an abundance of evidence which shows that financial incentives affect physicians treatment decisions and hospitals policies. Most of the above points are geared toward changing the financial incentives for patients and doctors/hospitals In order for healthcare to function more like a true market.
The goal of all of the above reforms is to get the healthcare market to function more like a true market. Given Romney’s extensive experience in the healthcare field and Romney’s proven track record of not just talking about health care reform, but actually doing it, ROmney would be the best candidate to fix the U.S. healthcare market into a more cost-effective, free market system.
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