NCPA - National Center for Policy Analysis

ROMNEY'S FOLLY

September 1, 2009

In 2006, Gov. Mitt Romney enacted the most sweeping health care reform in the nation by making Massachusetts the first state to require that its residents purchase health insurance under penalty of law (the "individual mandate") and the second state (after Hawaii) to require that employers make a minimum level of health insurance part of employee compensation (the "employer mandate").

Although Romneycare included no insurance program explicitly run by the government, it gave Beacon Hill politicians so much power that it might as well have.  The fruits of Romneycare have been exactly what you'd expect from a government program,

All this makes Massachusetts a case study in the reforms that President Obama and congressional Democrats are trying to ram through Congress.  Particularly the Romneycare individual and employer mandates, says Michael Cannon, director of health policy studies at the Cato Institute:

  • The individual and employer mandates give Massachusetts the power to ration care in a deliberate and systemic fashion and gives the government the power to dictate what types of coverage health plans must offer but also enables it to regulate the relationships between insurers and health care providers.
  • Since individual and employer mandates are simply disguised taxes, imposing them would violate Obama's pledge not to tax the middle class.
  • He vowed that no family making less than $250,000 a year would see any form of tax increase; yet House Democrats would force non-compliant employers to pay a tax equal to eight percent of payroll, while uninsured individuals would pay a tax equal to 2.5 percent of income.

Recently, the legislative commission recommended that Massachusetts impose price controls in the private sector as a means of rationing care.  But to have any real impact on spending, the state would have to control not only the method of payment but the prices themselves, says Cannon.

Source: Michael F. Cannon, "Romney's Folly," National Review, August 10, 2009.

 

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