Myth Romney on health care

It is entertaining to watch Mitt (aka Myth*) Romney try to thread the political needle as he explains his support of the Massachusetts health care reform bill that he signed as Governor back in 2006. While he attempts to distinguish his law from the one enacted under President Obama mainly as an issue of state versus federal jurisdiction, the big issue he has to overcome with the Republican primary audience is the individual mandate.

Why do you need an individual mandate -- or as Romney calls it, "personal responsibility"? Well, you don't unless you also want to require insurance companies -- as he does -- to cover all patients. As I have said before about the federal law, which also applied to the situation in Massachusetts:

I think one of the most important aspects of the law is "guaranteed issue" of health insurance: Insurance companies will no longer be permitted to use pre-existing medical conditions as a bar to coverage. A concomitant of guaranteed issue is the individual mandate, the requirement that all people purchase health insurance. Why?

Left to their own, insurers will impose pre-exisiting conditions types of restrictions because they understand the moral hazard aspect of insurance. Healthy people provide an actuarial balance to sick people. If people only buy insurance when they need care, the risk profile of the insured population rapidly swings, upsetting the actuarial calculations used to establish premiums. So, if these restrictions are outlawed, everybody needs to be in the risk pool. Accordingly, you have to ban optional insurance.

So, Romney is correct on this point, even though some people hate to admit it.

But Romney is also a bit loose with some facts. While claiming it is possible to design a state-by-state approach that does not rely on new federal funding, he leaves out the fact that the MA law was dependent on -- and in fact, was designed to secure -- over $300 million in federal funding. To a great extent, it was possible to achieve a political consensus on this bill in MA because of the need to save the so-called "Medicaid waiver." I guess you could assert that the $300 million was not "new" federal money, but it was scheduled to expire.

I had a chance to meet with Romney as governor during the period of the bill's pendency. You would be hard-pressed to find a governor more knowledgeable and engaged in the details of the proposed legislation. He, like others, felt it important not to squander the opportunity for compromise that was provided by the budgetary "gun to the head" of losing this amount of federal support.

What a shame now that he can't admit that such political compromise is the sign of smart governing, rather than weakness.

Where Romney and Obama agree, sadly, is in promising the American public that they can have it all -- access, lower costs, and choice. That seems to be the deceptive mantra that is needed in the body politic. Both men ignore inconsistencies in their own legislative frameworks between that mantra and reality. Note that Romney, for example, looks favorably on the removal of fee-for-service pricing, ignoring the reduction in choice implicit in such pricing. (Minute 16:32 of the video below, where capitated rates have "a lot of promise.")

Here's his speech. If you cannot see the video, click here.



* I give credit here to the blogger over at Massachusetts Liberal, who may have introduced this term back in February of 2007.