Former Massachusetts Gov. Mitt Romney begins his second bid for the presidency with an albatross around his neck. The sooner he admits his state version of ObamaCare was a mistake, the better.
As Mitt Romney announced the formation of his 2012 exploratory committee, waggish Democrats were “cheering” the fifth anniversary of RomneyCare, the state health care overhaul he brought to Massachusetts. “Mitt Romney is nothing short of a founding father of modern health reform,” declared New Hampshire Democratic Party chairman Ray Buckley as he and other Democrats whooped it up with a RomneyCare birthday cake.
Democrats were really celebrating how RomneyCare hurts Romney’s chances with primary voters. Obama’s trillion-dollar-plus takeover of the health insurance industry was a huge factor in the GOP takeover of the House of Representatives last November, and the struggle to repeal ObamaCare may be the dominant domestic issue among Republican presidential hopefuls.
Romney has a few good things going for himself: his rescue of the scandal-ridden 2002 Winter Olympics, his ability to win votes in the most liberal of states and his experience in private equity management, in which he turned around ailing businesses.
He may understand the private sector better than his GOP rivals, but he clearly had a lapse in that understanding when pulled his medical act in Massachusetts. Paving the way for ObamaCare, Romney’s plan was the first time a state forced its residents to buy a product or service simply because they lived in the state.
Health costs have gone up in the Bay State significantly since Romney’s overhaul, and polls show residents believe RomneyCare is the reason. The uninsured still number over 100,000, despite his promise of “universal coverage.” And hundreds of thousands among the newly insured pay nothing for their state-mandated coverage, freeloading off those who do.
RomneyCare is overwhelmingly popular in Massachusetts, which has, by far, the lowest percentage of uninsured citizens in the nation. One of my daughters lives in MA; going to school half time; supporting herself and living below the poverty line. But she’s got great health insurance, with access to the best hospitals and doctors in MA, which are commonly acknowledged as being among the best doctors and hospitals in the nation.
The following is not from any political blog, but is an objective assessment by Blue Cross of Massachusetts:
Health care costs have rocketed up everywhere. It’s because health care is more expensive, not because government health care programs are significantly driving up costs. Blue Cross of CA tried to ram through a 39% rate hike in one year, at a time when ObamaCare was thought dead in the water. Blue Shield of CA tried to increase rates by more then 50% in one year, but was careful to say that it had nothing to do with impending ObamaCare.
Of course there are problems with implementing new systems. The Blue Shield of MA assessment, listed above, suggests tweaks to the MA plan to improve it. No one will ever have a perfect plan, which will just fall into place, without any mistakes and growing pains.
Anyway, the Dems are having a lot of fun with RomneyCare (see amusing 82 second youtube video), which is, indeed, the blueprint for ObamaCare. But Romney didn’t invent RomneyCare. It was invented by Grassley, Dole, and other GOPers, back in the early 90s, as an alternative to HillaryCare. Back then, it was a sound conservative plan. Now it’s a “socialistic takeover of healthcare.”
– Larry Weisenthal/Huntington Beach,CA
“Popular” and fiscally effective are two different stories. MA is a black hole of fiscal loss. That people appreciate the “free” isn’t surprising. That it’s tanking the state’s economy is a perfect example of why it should not be pursued.
@Mata: Here’s the thing. It’s not “free.” It works just like ObamaCare would work. Employers continue to pay for health insurance plans of their employees, just as if there were no RomneyCare. Conservatives claim that private businesses will stop offering insurance as a benefit. Well, no. No evidence for that. 71% of employers offered business-purchased insurance before RomneyCare and 76% now. People without employer paid insurance buy their own insurance from “exchanges” (which are truly wonderful; I reviewed all of them in helping my daughter make the right decision about her plan). People that can’t afford the premiums get a partial subsidy, as a better alternative to MediCaid. The results speak for themselves: 98% coverage, 99.8% coverage of children. 66% approval rating — the same as when the law was first passed.
You make it sound as though people like it because they get free health care. No, they don’t. They like it because it is, by far, the very best state wide health care system in America. You don’t agree? Nominate your state of choice and then we’ll compare both states — medical coverage-wise and voter satisfaction with health care-wise, and state financial status-wise.
And the great thing is that MA has a system in place to actually control long term health care costs, along with providing universal coverage. The conservatives offer nothing of the sort. The conservatives have no plan to control costs, much less provide universal coverage.
Leave it up to the private sector, is the mantra. Well, the private sector is failing miserably, precisely because health care doesn’t follow the usual rules of market economics. The fatal flaw is that the sellers (doctors) make the purchase decisions for the buyers (patients). So, to control costs, we’ve got middlemen (insurance companies), which compound the problem, rather than solving the problem.
RomneyCare actually goes a long way to solving the problem. It can and will be improved, as suggested in the Blue Cross assessment I linked. If ObamaCare ever sees the light of day, it will, likewise begin to solve the problem.
– Larry Weisenthal/Huntington Beach, CA
We’ve sorta been here, done that, Larry. Both of us know it’s not “free”… tho for some in MA, it is indeed just that. But while you tout “the state with the least amount of uninsured”, we can also see they have the fastest rising premiums and among the most expensive in the nation. And the state has been busy cutting back for that reason. They are spiraling down the fiscal rabbit hole. Romney care is no fiscal success, and to suggest it is otherwise is simply a pipedream.
Let’s do this.. if you’ll consider it. Call a truce on health care in this one aspect. Both you and I agree that the reason premiums are rising are because the costs of administering health care is rising. Fact is, Romney’care, O’healthcare, any single payer isn’t going to change that. The only thing they can “change” is how much they will reimburse those administering health care. Because of an increasing and unsustainable black hole of P&Ls in the red, health care providers – as we know them today – will go out of business. Or they will simply choose not to engage in treating those on public health plans for survival means… as you have done.
The only way to address healthcare is to first address ways to make administration of health care more cost effective. Just having government assume those costs doesn’t ‘change that reality. It only changes who shoulders the bill. When they first address reining in those costs, only then will I agree to have the debate about who pays… private or public insurance. Until then, private burden is the only equitable and fair way to the rest of the nation.
Very fine comment, Mata. I agree with a lot of it, but not with the way you’ve characterized Massachusetts fiscal health and health care costs. The tax and debt burdens of MA and CT are very similar (CT’s actually being worse), as are the health care costs. What’s different about the two states is that MA has nearly universal coverage, while CT does not. Also, MA residents enjoy better insurance, with regard to pre-existing conditions, lifetime caps, non-cancellations, etc.
So whatever fiscal problems MA may or may not have, it’s not owing to RomneyCare, which has been a tremendous success at doing what it set out to do, which is to provide nearly universal coverage, with superior insurance plans, at no increased cost.
Everywhere, there are massively rising health care costs — solely because of providers’ fees and cost of drugs and tests and insurance company middlemen, and not because of government bureaucratic inefficiency. Which is why doing nothing is not a viable option.
– Larry Weisenthal/Huntington Beach, CA
No one of import (and this includes Obama’s rhetoric) suggested “doing nothing”, Larry. That’s a tired and worn political campaign talking point. The battle has always been about what to do. And while I’m totally opposed to O’healthcare’s approach, I’ve also been equally unimpressed with the GOP approach. Both fall short… just as they do in the budget battles.
Yes, MA’s increased costs have been specifically tied to the added burden of adding more to the health care system. They tried to cover it, sans a mandate, but did not succeed. Like FEMA increased “let’s make the flood zone bigger to collect more premiums” approach, MA, CT… no where has worked on this approach. And that includes your personally respected Euro nations. The point is, the rising costs that are not reined in with acceptable ways to minimize costs to the providers, continue unabated. This has nothing… I repeat, NOTHING… to do with the insurers. If you elimimated them from the mix, the problem remains. Costs outweigh what govt programs are willing, or able, to pay. That you lay this off on middle men is disingenuous, and inaccruate.
@mata: The “middlemen” to which I referred were only #4 in my list, behind providers fees (doctors and hospitals), drugs, and tests. They are a problem only insofar as their administrative costs and profit extractions are high, relative to the value of what they provide as basically a collector and distributor of money. But I agree that they are not the root of the problem — it’s the first three on my list which are the far greater problem.
In point of fact, both RomneyCare and its national equivalent, ObamaCare, rely 100% on the existing network of private insurance companies to continue doing what they currently do, which is to provide health insurance. All that’s been added is a mandate to purchase insurance (which was originally proposed by Grassley and Dole, both GOP Senators), a system of regulated insurance exchanges (run by competing insurance companies), and shifting indigent health care through Medicaid to indigent healthcare through subsidies to individual private insurance policies. To me that’s a move away from socialized medicine, rather than a move towards socialized medicine. It’s hardly the radical, socialistic “government takeover” as it has been described. Again, it’s a model designed by GOP Senators and first put into effect by a GOP governor.
If Obama has been a little smarter, he’d have done what the GOP would have done, which is to shock everyone with his opening offer, say totally nationalizing health care, in the style of the British. Government owns the hospitals and the doctors work for the government, etc. The next step down would have been Canadian style single payer. And the GOP would start with status quo (or some trivial modification, such as “selling insurance across state lines”) and they’d end up compromising on Grassley/Dole/RomneyCare.
That would have been the smart way to do it. It all comes down to perception, basically.
– Larry Weisenthal/Huntington Beach, CA
Larry, perhaps we have a communications problem again. “Insurance” companies are not the problem. Costs to provide medical care are.
Insurance companies only agree to pay to play, in the event something happens, and base their premiums on estimated costs via statistics and risk
If those estimated costs are lower, their premiums are lower. I will again remind you that health insurers average about 3% profit structure. Hardly a windfall.
If you will remember, Obama started his talking points on health insurance via costs of medical, then switched it to an assault on the insurance industry. Easier target. You can price control the premiums until the cows come home. Doesn’t affect the price of doctors/hospitals/labs to consumer one iota. And that’s all the insurance industry is doing – guaranteeing to pay for their overcharging and exorbitant costs. The government, MA, Romney, Obama all want them to eat it in the shorts to make them look good short term.
@Larry
One question; Where in the Constitution of the United States does it allow for Congress to authorize the federal government to pay for someone’s health care?
We might as well skip ahead the the only real question worth answering. The arguments about numbers, and which better benefits the country(Obamacare, or free market) means very little if you cannot prove that Congress is authorized, per the Constitution, to pay for it.
@mata (#8): I don’t disagree at all with anything in this latest comment (#8). As far as Obama’s various statements on this — it’s all politics, but politics is important. That’s what politicians do — they do what they think will get the voters on their side (Mitt Romney’s breathtaking transformation from a Lincoln Chafee-type moderate Republican to a neo-Tea Party-er being an example relevant to this thread).
Anyway, your #8 is an eloquent, insightful demonstration of the ineffectiveness of the GOP’s approach to reigning in health care costs. As I understand it, the GOP plan is to sell insurance freely across state lines, which is supposed to spur “competition” among insurers. Yet the total cost of insurance (which is very high, relative to the value of what they do — you can’t compare profit margins in the financial services sector (which is basically where an insurance company sits) with profit margins in the human resource services sector or the manufacturing sector) — anyway, I was saying that the total cost of insurance is only a small fraction of total health care costs; so that insurance companies can’t do much competing with respect to price — all they can do is to “compete” with regard to quality.
Let’s say that Company A in California offers a network of 50% of California physicians and a lifetime benefits cap of $5 million and Company B in Mississippi offers (to California residents) a network of 5% of California physicians and a lifetime benefits cap of $0.5 million. Now, Company B could sell their plan to California companies for a whole lot less money than could company A — only the problem is that either (1) employees would get screwed (i.e. they would be victimized by the same sort of “rationing” which is one of the GOP anti-ObamaCare catch phrases) or (2) company B’s policy might not meet California insurance standards. So the only way that the GOP plan would “bend the curve” is through rationing. Malpractice reform is the 2nd pillar of the GOP plan. I’m in favor of malpractice reform, but it was done in California 30 years ago and studies have shown that it has done nothing at all to reduce the cost of health care or the use of “defensive medicine.” Same thing in Texas, which has a shorter experience with it.
RomneyCare is excellent, not simply because it actually has provided near universal health care in an astonishingly short period of time, but because the health care plans on the exchanges are truly excellent plans. They all cost about the same thing — the main differences are small variations in provider networks and the like. The reason they all cost about the same thing is that they are mandated to provide certain core benefits and, as you argue so eloquently in your #8 comment, there is little wiggle room for insurance companies to compete on price, based on their relatively small percentage of the total “take.” They can only compete by lowering cost through rationing care — and care rationing is forbidden under RomneyCare.
@johngalt: ObamaCare is “free market.” Again, the plan was originally designed by Grassley, Dole, and other Republicans in the early 1990s and put into effect for the first time in Massachusetts under Romney a few years back. Corporate America and small business America do most of the heavy lifting, insurance payment-wise, under RomneyCare (and its national sibling, ObamaCare), just as they do now. The Massachusetts experience provides no support at all for the theory that payment will shift from business to individuals. The big differences between status quo and ObamaCare is the individual mandate (again, designed by Grassley, Dole, etc. and not by liberal Democrats, and put into place first under RomneyCare) and the organization of insurance exchanges, made up of private insurance companies. Federal subsidies will be no higher than they are now under Medicaid (aid to the indigent). Individuals will be mandated to purchase health insurance, and low income people will receive government subsidies. But these are subsidies which they are currently getting anyway, under the much less cost-effective Medicaid system.
There’s an unbreachable difference in philosophy here. Conservatives feel that the uninsured should just be left to their fate and not receive health care at all, if they don’t have insurance and can’t afford to pay. That’s what you are arguing in #9. Non-conservatives don’t agree.
Whether or not ObamaCare is constitutional is currently being litigated in the court system.
– Larry Weisenthal/Huntington Beach, CA
@openid.aol.com/runnswim:
A statement I can agree with. Although, I don’t agree with your sentiments about what conservatives feel in regards to the uninsured(of which many chose to be). That isn’t what I’m arguing in my post #9.
We are a nation of laws, are we not? And as such, I’m sure that you’d no sooner have your business robbed, without recompense in the form of money or punishment, for those who robbed you, than you would desire Congress to pass legislation irreconcilable with the Constitution, the supreme law of the land. And being that we are a nation of laws, and that Obamacare, as well as many other government programs, are in direct conflict with the Constitution, no matter what the intentions of such legislation ultimately is, should they be allowed to continue? Conservatives, particularly those who desire to see a return to Constitutional values and rule of law, think not.
I do not care who did what, or when. You mistake politics with personal ideology. Obamacare is not ‘free market’ in it’s ideas, as evidenced by my own health care insurance changing long standing coverages, and the resultant ‘choices’ I had, to comply with Obamacare. Any such direct intervention by the government, legislating one’s “choices”, by definition, is not free market. For example, the 10% tax placed on one’s visits to a tanning salon, limits the choice, economically for the consumer, to freely affect their skin tone. Yes, it is a trivial matter, and most people never opt to choose that choice anyway, but it proves that Obamacare is not a ‘free market’ solution to healthcare.
As for the uninsured who need healthcare, I don’t know enough about the details of the issue to develop a plan myself. I just know that Obamacare is unConstitutional in theory, and in practice, and as such, should be repealed, as should many other governmental programs and legislation. Freedom and liberty aren’t just buzzwords for me, Larry, they are inherent to the philosophy I follow, as well as the idea this country was founded upon. If you believe Obamacare should be allowed to stand, then you, simply put, do not espouse those ideas, and are in direct opposition to not only myself, and other conservatives, but to the ideals our founding fathers put forth over 200 years ago.
@John (#11): I don’t have anything further to add. Your comments (including #11) have been excellent and, from my point of view, this was a thoughtful and worthwhile discussion.
– Larry W/HB
argggg on composing a response with links… only to have it disappear down the cyber toilet…. LOL
Larry, I believe that the heart of debate on healthcare… specifically Romney and Obama’s approach… lies in the stated end goal. For example, you judge success on how many additional are covered. I judge success on what was supposedly the original goal… make health care affordable. I believe that most would opt to have coverage if they could afford that extra expense.
To you, Romney’care is a success because it covers more. But then, the crushing load of additional people on the MA healthcare system is taking it’s toll… which is why Gov Patrick is cutting benefits for the MA Medicaid in their 2011 budget. I guess some will be getting a not so excellent package after all.
Additionally, they are having their own problems with an overly generous and costly budget-busting public sector.
Let’s go to the cure you, Romney and Obama say is the answer… ensnare more in the participation net in order to defray the costs. This is actually counterproductive since it ignores the base problem of actually controlling the costs to do lab tests, drugs, doctor visits, procedures and surgeries, state of the art medical equipment and E&O insurance. And, in fact, tho you are collecting more premiums, you also have more people, putting demands on the system.
As to Romney’care’s success, below is the projected state healthcare costs.
Massachusetts Health Care Cost Trends – Historical (1991-2004) and Projected (2004-2020) November 2009
I always wonder just what projected “income” they are working with… are they accommodating for a double dip recession, and decreased future GDP growth because of the deficient and debt? Or are they just looking at the past few decades for a finger-in-the-wind guess?
In fact, according to a Commonwealth Fund Dec 2010 report, employer provided insurance increased an average of 41 percent across states from 2003 to 2009, more than three times faster than median incomes, and deductibles per person rose 77 percent, on average.
MA has not escaped this reality. The costs in that state are still unmanagable and unsustainable. Their response? To put a paperbag over reality by capping what the state will “allow” for premium increases to under 10% for the 2011 Q1 period.
I don’t think I need to point out that if my costs have gone up as a manufacturer or provider (i.e. rising provider costs), that you… as the governnment… telling me I can’t raise my selling price for that product is no cure to my rising costs of doing business. You’re just setting me up for failure down the road… thank you very much.
As for Romney, there’s two reasons I spit where I hear his name. The prime one is Romney’care. He created an Obama plan before Obama, but opposes Obama’s because of a state’s rights stand. While I may agree the feds have no business stomping on the state’s right to place basic coverage criteria, states also have no right to impose mandates, as Romney care has done. Either the overreach of commerce and infringement on Constitutional rights is wrong – whether done by the state or feds – or it’s not. States have no right to impose mandates that citizens purchase a product.
But at least, if it’s just a state law, Americans can move to other states, as our republic was created to allow. In all instances, the feds are attempting a coup that will leave no aspect of our lives unpenetrable by Congress if this goes thru.
To summarize all this, I’d say your idea that MA/Romney’care is a success… and thereby so should Obama’care… totally depends on how you define success. If it’s to get more people “covered”, it certainly does that. Affordable and sustainable? Utter failure.
And all attempts along these lines will continue to be utter failures unless there is a way to lessen the delivery of health care by providers, thereby actually reducing the costs of obtaining health care. That goal went out the way with the political talking points, and it became an assault on the insurance industry, and a quest to price fix premiums.
@mata: I think that I addressed most of your points in #5.
Here’s the deal. Health care costs are going up everywhere. I’ve got California Blue Shield and they tried to raise my rates by 57% in one year alone! And they were careful to state that this had nothing at all to do with ObamaCare. Health care costs, state debt, and state tax burden are every bit as bad in CT as they are in MA. CT has the same health care system that the rest of the country has. MA has RomneyCare. The only real difference between these two neighboring states? MA has achieved virtual 100% (actually 98%) coverage, including 99.8% coverage of children. CT has not come close to this. So — same per capital health care costs. Same tax burden. Same debt. Only MA has universal coverage, which was the primary goal of the MA plan (watch the video I linked, with Romney in his own words stating the goals of the plan).
Plus, the MA plan is overwhelmingly popular with its own citizens.
With regard to the problems with RomneyCare — well these are well described in the non-partisan, independent Blue Cross of MA analysis I linked earlier. That there would be growing pains was 100% predictable and the problems are solvable, as outlined by Blue Cross.
With regard to explosion of health care costs in general — well, no one has a guaranteed foolproof plan for that. But RomneyCare and ObamaCare at least have rational approaches for getting a handle on this problem.
What MA is doing is this: they don’t have direct control over doctors, the way that Medicare does, by setting reimbursement rates. But MA does have control over its insurance companies. MA can limit insurance company rate increases. This forces insurance companies to squeeze providers. When providers get squeezed too much, they start to drop out of the program (this is what happens with Medicare). When too many providers drop out, Medicare raises reimbursement until enough drop back in. This is why Medicare provides superior care at a lower cost than the purely privately administered health care sector. When the MA insurance companies are not able to maintain adequate provider networks, because of provider drop out, then they’ll go back to the state, and the state will have to be a little more generous with the allowed rate increases. This is, at least, managing health care costs in a feasible way (a way which has already been proven to work by the Medicare model).
Long term, what is needed are changes in the way that providers are paid — they should be paid on the basis of health care outcomes, rather than on the basis of services provided. To give only a single example, in my specialty (medical oncology), my fellow oncologists get 69% of their revenues by giving infusion chemotherapy in their offices. They make only 8% of their money by being doctors (evaluating patients and managing illness). Oncologist in this country do very, very well, on account of this. . I’d wager that the majority of them who have been in practice 20 years or longer are multi-millionaires. When a patient has a cancer which is growing, the choice is between new infusion drug regimens, which make the oncologists tons of money, old infusion regimens, which make them much less money, prescribing oral drugs, which makes them peanuts, or providing supportive care, which takes up more time and also makes them peanuts. These choices, by the way, commonly exist in situations where there is no evidence at all that any one of these choices is any better than any other, with regard to improving the odds of survival, providing relief from symptoms, and maintaining quality of life.
So what happens in the real world is that the doctors behave exactly like you’d expect real humans to behave. They greatly overuse chemotherapy and they greatly overprescribe the drugs which make them the most money, and they find it much easier to just keep pushing chemotherapy than to provide end of life counseling and supportive care.
This has to change. ObamaCare has $10 billion in the budget for pilot projects to explore ways to change reimbursement from paying for treatment to paying for outcomes.
– Larry Weisenthal/Huntington Beach, CA
@Larry, , we again come to where we differ on the definition of “success”. You suggest that, since premiums are going up everywhere, MA at least is a “success”… in your eyes… because they’ve got more of their population covered.
As I said, they are an utter failure because the price for that has taken it’s toll… which is why Moody’s ranks them among the most indebted states, relative to their economies, obligations and income. Especially when you factor in their pension obligations.
There is a price to be paid for “distributing” wealth, and benefits, on the backs of taxpayers. And with the economy forecast to be less than spectacular, their projections for anticipated revenue are going to be blown out of the water.
You call it success? I call it the template for failure. Difference of perspective. And that’s where I’m going to leave this conversation.
@Mata: Taxachusetts was Taxachusetts, way before RomneyCare! RomneyCare hasn’t increased the state’s tax burden appreciably. Most of the newly covered people are paying for it (completely or in part) with their own money or with employers’ money, under the mandate. The state subsidies come largely from money which previously would have gone to Medicaid (i.e. strictly charity/welfare medicine).
http://www.masstaxpayers.org/publications/health_care/20090501/massachusetts_health_reform_the_myth_uncontrollable_costs
In the graph in your comment #13, you could draw the exact same graph for every state in the union (the rise in health care costs). It’s all just a projection, anyway. RomneyCare at least has a plausible mechanism for bending that curve downward (squeezing insurance companies to squeeze providers). ObamaCare has an ever better mechanism (changing reimbursement from services provided to health care outcomes). No one else has offered a plan to do anything to control these rising costs.
P.S. The Moody’s article you link reinforces the point I made about the MA vs CT comparison. These are next door neighbor states with very similar tax and spend policies — policies which have been in place for decades. The debt burden of MA is not owing to RomneyCare — it’s owing to precisely the same policies present in CT, during the same period of time. It’s a red herring (i.e. something unrelated) to go conflating debt burden, tax burden, and health care costs with RomneyCare. RomneyCare is responsible for neither debt burden, tax burden, or health care costs. Long term, however, RomneyCare offers a path to controlling health care costs, which will reduce tax burden, not increase it.
– Larry Weisenthal/Huntington Beach, CA
I didn’t say their heavy debt burden was *because* of Romneycare, Larry. I said their debt burden is not decreased, nor is their rising costs of health debt providing any relief. As far as whether the revenues for mandates is paying for their health costs, that has been debunked in the past couple of years as they were incurring shortfalls just a few years after enactment (2006). Per the MA govt site, theydepend heavily on extra Medicare federal subsidies as well, and they have been slashing their health care budget since 2009… the same year I did a post about Obama following Romney’care over the cliff.
None of the promises of Romneycare hold true for Mass. Their health care costs are not being reined in, nor is it changing their projections. They remain heavily indebted, and are overpaying for their public sector health plans to boot. And it’s most certainly not “paying” for itself.
And thank you for that confirmation that CT/MA “tax and spend policies” are a fiscal loser social experiment.