Happy birthday, RomneyCare
While we’ve been focusing a lot lately on ObamaCare thanks to the recent Supreme Court hearing and new studies from the Congressional Budget Office and Charles Blahous, April is the sixth anniversary of the passage of RomneyCare — the plan pushed by then-Massachusetts Gov. Mitt Romney, which later became the blueprint for ObamaCare.
Over at Reason on Friday, Peter Suderman marked RomneyCare’s birthday by explaining how the law has been a fiscal nightmare for the Bay State:
As Zirui Song and Bruce Landon report in The New England Journal of Medicine, despite years of political energy directed at cost control, health spending in the Bay State remains a serious concern. In 2009, for example, the state spent $61 billion on care. In 2012, more than 54 percent of the state government’s budget will be devoted to health care, the highest in the nation. The majority of that spending is on the expanded insurance coverage called for by RomneyCare. Other states have big Medicaid bills, but Massachusetts also pays for the same sort of middle-class insurance subsidies that ObamaCare is slated to begin offering nationally in 2014. The price of coverage paid by individuals is going up too. As Song and Landon note, “For individuals, monthly premiums for a minimal (“bronze”) plan purchased through the Commonwealth Choice connector (the state insurance exchange) increased from about $175 in 2007 to $275 in 2012 (a 57% increase), despite slowed growth in overall health care spending since the start of the recession in 2008.”
President Obama has obvious political reasons for tying his own law to the state version signed by his opponent: It helps neutralize Romney’s increasingly frantic criticism of one of Obama’s least popular legislative achievements. But it also connects ObamaCare, which the president has struggled to portray as fiscally responsible, to the mounting fiscal troubles surrounding RomneyCare, Obama’s model. The troubles Massachusetts is already having with RomneyCare are the same troubles that America can expect to have with ObamaCare down the road.
If anything, the national fiscal issues may be worse. For one thing, Massachusetts was able to pay for a big part of its overhaul with an influx of specially granted federal dollars through a Medicaid waiver. Washington cannot turn to any larger, outside political body for cash (unless one counts borrowing from fellow nations). For another thing, coverage rates in Massachusetts were already unusually high relative to the rest of the United States. This is important because the growing costs of RomneyCare are primarily the result of the growing cost of expanded coverage. Relatively speaking, the Bay State’s increase in coverage was actually quite modest. That will not be true nationally—which means the costs could be far greater.
Song and Landon suggest that Massachusetts will be the state to watch to see which cost-control efforts work. I suspect it will be more the other way around: We’ll watch RomneyCare to see what doesn’t work—and as a preview of the problems we can expect nationally. To a large extent, we already are. As the NEJM authors write: “One lesson is already resoundingly clear: the growth of health care spending threatens the sustainability of every other public service, from education, to public health, to infrastructure, to defense. Indeed, health care spending is the most important determinant of our growing national debt.”
So happy birthday, RomneyCare. And ObamaCare, take note: This is what you’ll look like soon.
There is no denying that RomneyCare served as the blueprint for ObamaCare. And while the White House has taken every opportunity to point that out, maybe they should think twice. Back in September, the Beacon Hill Institute found that the law had cost Massachusetts some 18,000 jobs. The law has also been a budget-buster, resulting bailouts from the feds to keep it going. The architect for both RomneyCare and ObamaCare has also recently admitted that the law won’t keep health insurance premiums and other costs from rising.
If RomneyCare is the blueprint for ObamaCare, then we know what we can expect as the law continues to be implemented — barring the Supreme Court finding it to be unconstitutional, which looks like a very real possibility. Health insurance premiums will continue to rise and the costs will fall on taxpayers.