Happy Birthday, RomneyCare! You're Growing So Expensive So Fast!
Today is the sixth anniversary of RomneyCare, the Massachusetts health care overhaul signed into law by Mitt Romney that became the model for ObamaCare.
To celebrate, the Obama White House has released a happy birthday video congratulating RomneyCare for making it another year—not exactly a guarantee for Obama's plan—and touting Romney's state level overhaul as the model for the president's own national health reform:
The video, put together by The Obama Truth Team, makes much of the connection between RomneyCare and ObamaCare. Although Mitt Romney denies it, this connection is real. But in focusing on this connection, the Truth Team's video omits certain other truths about the state of the Massachusetts health system.
For example: No other state spends as much of its budget on health care as Massachusetts. And health costs in the state are growing significantly faster than the economy as a whole—to the point where they threaten to crowd out much of the rest of the state's budget. And RomneyCare isn't exactly making things easier.
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.