Romney’s Response to ObamaCare

Mitt Romney’s entire career reflects a businesslike approach. On the one hand he has been willing to act boldly to solve problems. On the other hand he has been willing to keep what works and discard what doesn’t. The latest Romney pronouncements on health policy are consistent with that history.

As President Obama has said on many occasions, ObamaCare is based on a health reform Governor Romney spearheaded in Massachusetts. But blindly copying a health reform — while ignoring what’s really worth copying and what’s not — is hardly sensible presidential leadership.

Here is what is good about the Massachusetts health reform: (1) Governor Romney brought both parties together to achieve genuine bipartisan reform (something Barack Obama failed at miserably at the national level); (2) he cut the insurance rate in half by giving substantial tax relief to people who must purchase their own insurance, and (3) he did all this without raising taxes.

Here is what is bad about the Massachusetts health reform and what Mitt Romney now appears ready to jettison: (1) an individual mandate to purchase health insurance, (2) a system under which individuals can wait to buy insurance until after they get sick for the same premium healthy people pay, and (3) a system under which insurers have perverse incentives to over-provide to the healthy and underprovide to the sick.

When government tells people they must buy health insurance, special interests gain an opportunity to bloat the required benefits package with all kinds of unnecessary, costly benefits. Romney is not only rejecting this one-size-fits-all approach, he even endorses being able to buy insurance across state lines, giving people an enormous choice of insurance products.

Romney endorses the idea that people who are continuously insured should not be penalized if they get sick and have to change health plans (say, because they lose their jobs). By implication, the governor is not endorsing the idea of letting people who choose to be uninsured sign up for insurance after they get sick with impunity.

The new Romney approach to health policy is both refreshing and sensible.

Comments (5)

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  1. Jeff says:

    John, is this spin? You are making more sense than Romney makes.

  2. Buster says:

    Romney should have known the next (Democratic) governor would subvert Romney’s plan for health reform in Massachusetts.

  3. Studebaker says:

    Massachusetts is going to fail. Of the ~400,000 people who are newly insured, very few have actually purchased coverage with their own money. This just proves a tenant of economics… Demand curves are downward sloping. It’s easy to cover people when coverage is free; less easy when they are expected to pay for coverage.

  4. Brian says:

    I agree that Romney should have known and that the Massachusetts system will fail, but if it is viewed in the context of being an experiment within one state and not a model for the nation, Romney can save face.

  5. Matt says:

    The economics of RomneyCare have yet to be known. The models are only based on a few years of data and a lot of assumptions. We will see how it ends up.