Thursday, May 12, 2011

Preview of the Romney Healthcare Speech Today

The WSJ has provided a bit of a preview of the speech that Mitt Romney is scheduled to give today in Ann Arbor, Michigan.

Romney, they say, has a bit of a problem, in that his 2006 “Romneycare” law in Massachusetts provided the model for the 2010 “Obamacare” law:
As everyone knows, the health reform Mr. Romney passed in 2006 as Massachusetts Governor was the prototype for President Obama's version and gave national health care a huge political boost. Mr. Romney now claims ObamaCare should be repealed, but his failure to explain his own role or admit any errors suggests serious flaws both in his candidacy and as a potential President. …

In the name of personal responsibility, Mr. Romney also introduced the individual mandate, first in the nation, requiring everyone to buy coverage or else pay a penalty. Free riders, he said, transferred their own costs to others, either through higher premiums or taxes. This is the same argument the Obama Administration is now using to justify the coercion of the individual mandate in the federal courts. Because the states have police powers under the Constitution, Mr. Romney's plan posed no legal problems. His blunder was his philosophy of government. …

The only good news we can find is that the uninsured rate has dropped to 2% today from 6% in 2006. Yet four out of five of the newly insured receive low- or no-cost coverage from the government. The subsidies will cost at least $830 million in 2011 and are growing, conservatively measured, at 5.1% a year. Total state health-care spending as a share of the budget has grown from about 16% in the 1980s to 30% in 2006 to 40% today. The national state average is about 25%.

The safety-net fund that was supposed to be unwound, well, wasn't. Uncompensated hospital care rose 5% from 2008 to 2009, and 15% from 2009 to 2010, hitting $475 million (though the state only paid out $405 million). "Avoidable" use of emergency rooms—that is, for routine care like a sore throat—increased 9% between 2004 and 2008. Meanwhile, unsubsidized insurance premiums for individuals and small businesses have climbed to among the highest in the nation.

Like Mr. Obama's reform, RomneyCare was predicated on the illusion that insurance would be less expensive if everyone were covered. Even if this theory were plausible, it is not true in Massachusetts today. So as costs continue to climb, Mr. Romney's Democratic successor now wants to create a central board of political appointees to decide how much doctors and hospitals should be paid for thousands of services. …

Once government takes on the direct or implicit liability of paying for health care for everyone, the only way to afford it is through raw political control of all medical decisions. …

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