RomneyCare and the Return of Taxachusetts
On the campaign trail last year, Mitt Romney would sometimes attempt to combat the argument that RomneyCare, the health care plan he passed in Massachusetts, was essentially the same as the one President Obama passed nationally. Romney had a couple of points that he would make to distinguish the two plans, one of which was that his health care overhaul didn't raise taxes.
That's true as far as it goes:Romney's Massachusetts health plan didn't raise taxes when he signed it into law. But Bay State officials have warned on numerous occasions that health spending is on a course to overshadow everything else in the budget. And now Governor Deval Patrick is proposing a budget that includes a $1.9 billion tax hike, including new taxes on sweets, sugar, and cigarettes.
Patrick calls it a "growth budget," which is a fun way to characterize a nearly $2 billion tax hike. But it's accurate, in a way. As The Wall Street Journal's editorial page notes, it seems to be designed in part as a step toward paying for the already significant growth of health spending as a portion of the state's budget post-RomneyCare.
Mr. Patrick says the money will fund the usual array of liberal programs. But this is salesmanship to disguise that the state's real spending driver is the exploding cost of RomneyCare. That law was supposed to save the state money. But last August Beacon Hill was forced to impose new price controls and a cap on overall state health spending because "health-care spending has crowded out key public investments," as Mr. Patrick puts it in his budget.
He's right about that: Health care was 23% of the state fisc in 2000, and 25% in 2006, but it has climbed to 41% for 2013. On current trend it will roll past 50% around 2020—and that best case scenario assumes Mr. Patrick's price controls work as planned. (They won't.) In real terms the state's annual health-care budget is 15% larger than it was in 2007, while transportation has plunged by 22%, public safety by 17% and education by 7%. Today Massachusetts spends less on roads, police and schools after adjusting for inflation than it did in 2007.
This is, well, not promising. Post-RomneyCare, Massachusetts has seen premium hikes and price controls, tax increases and projections of unsustainable health spending to come. This is not so much a preview of things to come under ObamaCare as a mature version of what we're already seeing: fights over rate regulations, big premium hikes, new taxes, and increasing warnings about rising federal health spending.
When President Obama said that ObamaCare was based on the Massachusetts plan and noted that Romney's advisers said that it's the same plan, he was right. That's exactly what should worry us.