Pipes: RomneyCare a spiraling fiscal disaster; does not deliver universal coverage or meaningful structure of cost controls
[Update: race42008.com has released its take on RomneyCare titled: “‘RomneyCare’ Finds Broad Support, Nationwide Attention.”]
It’s one thing for politicians to promise that their mandates [Romney’s RomneyCare] will decrease costs, it’s quite another when it comes to implementing the plan, writes the estimable Sally Pipes in a townhall.com article titled Lessons from Massachusetts, and painful lessons they are.
Directions for use:
- Go to townhall.com
- Read this article
- Praise its author with comments and trackbacks
- Shout its conclusions from the rooftops
More from the estimable Pipes:
… In Massachusetts, the initial costs came in higher than expected. Faced with this reality, the bureaucrats in charge of the implementation at the Commonwealth Connector Board decided that universal coverage didn’t need to be universal after all, and it promptly exempted 20 percent or one in five uninsured from having to comply with the mandate.
The Connector Board also bowed to political pressure and agreed to reduce the premiums, a move that boosted program costs by $13 million. Some plans are totally free–and have therefore been popular. Other subsidized plans for people earning between 150 and 300 percent of the poverty line will cost people as much as 9 percent of income for just the premium. Not surprisingly, these plans have proven less popular. Of the 79,800 people who’ve enrolled in the health plans as of June 1 of this year, 59,816 signed up for the totally free plans.
This structure will produce a fiscal disaster. Considering the high premiums for those who have to pay, many will opt to remain uninsured. The fine of $216 will be more attractive than the premium. Politicians will face strong pressure not to enforce the mandate if the fines increase. Indeed, before the program started they exempted 20 percent of the target population.
At the same time, the premium subsidy makes the plans a bargain for individuals who expect to consume large quantities of health care. The insured will be older and less healthy than the average citizen. Spending will skyrocket. The taxpayer will be forced to pay or services will be rationed.
So far, this downward spiral appears to be well underway. The average age for those enrolled in the free plans is far younger than that of the plans for which a contribution is required. Not surprisingly, usage is higher for the paid plans as well.
And the doctors, they may like the plan in the short run as they will receive higher reimbursement rates for seeing Medicaid patients but in the long run, the picture is not as bright. As costs rise, they will be faced with payments being limited, rationed care, more bureaucracy, and less freedom on how they want to practice medicine.
Massachusetts may be able to limp its plan along for a few years with a combination of tax increases on employers, restrictions on enrollees, and price cuts to providers. It will not, however, achieve universal health insurance or a meaningful structure for cost control. Its most likely legacy will be to have created another government health bureaucracy, ratcheted up taxpayer health spending, and bolstered calls for a complete government takeover of health care … more
Full disclosure: Pipes is a Giuliani adviser. We have no brief for the former mayor of NYC. But we do admire his adviser on healthcare issues.
P.S. Update: eyeon08.com, in a post titled Romney’s Healthcare Plan: The Politics, addresses the sleight-of-hand of the Romney plan and reasons that—if we read eye’s analysis correctly—that Romney’s larger intention is to compete head-to-head on the healthcare issue with Obama or Hillary in the general election. The problem for Romney: surviving the primaries when the conservative base gets to have its say in the matter. Hence: all the deception.
So what does this say about Romney’s attitude toward conservatives?
We are a problem that Romney needs to solve in the short term.
In the longer term, we are disposable. Romney’s primary loyalties lie elsewhere.
- Brooks of the NYT suggests that Romney’s alledged conservatism is a facade to win the primaries
- the Romney electoral Schlieffen Plan halts and sputters—can more cash save it?