RomneyCare: Not Universal and Not Cheaper


First, an abashed confession: I had hoped, despite its flaws, that some improved version of Mitt Romney's Massachusetts health insurance mandate might help stop the slide toward what used to be called socialized medicine by leading to expanded private health insurance coverage. In 2006, then-Gov. Mitt Romney predicted in a Wall Street Journal op/ed:

Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced.

How was this miracle going to be achieved? Romney declared:

The solution we came up with was to make private health insurance much more affordable. Insurance reforms now permit policies with higher deductibles, higher copayments, coinsurance, provider networks and fewer mandated benefits like in vitro fertilization–and our insurers have committed to offer products nearly 50% less expensive. With private insurance finally affordable, I proposed that everyone must either purchase a product of their choice or demonstrate that they can pay for their own health care. It's a personal responsibility principle.

As the Wall Street Journal points out today, it hasn't worked out that way:

Supporters are exultant because 350,000 people are newly covered since former Governor Romney's parley with Beacon Hill Democrats in 2006; this cuts the state's uninsured rate by about half. That's not the promised "universal" system, but never mind. The ominous news is that only about 18,000 people -- or 5% of the newly insured -- have taken advantage of the "connector," which was supposed to be the plan's free-market innovation linking individuals to private insurers.

Most of this growth in coverage has instead come via a new state entitlement called Commonwealth Care. This provides subsidized insurance to those under 300% of the poverty level, or about $63,000 for a family of four. About 174,000 have joined this low- or no-cost program, a trend that is likely to speed up.

As this public option gets overwhelmed, budget gaskets are blowing everywhere. Mr. Patrick had already bumped up this year's spending to $869 million, $144 million over its original estimate. Liberals duly noted that these tax hikes are necessary because enrollment in Commonwealth Care is much higher than anticipated. But of course more people will have coverage if government gives it to them for free. The problem is that someone has to pay for it.

Who knew that giving away something for "free" would increase the demand for it?

Whole current WSJ op/ed here. Take a look at my Reason Foundation colleague Shikha Dalmia's insightful WSJ op/ed on health insurance mandates. My original proposal to mandate completely private health insurance here.