When Mitt Romney was governor of Massachusetts, he saw a problem he believed government should solve. Ninety-three percent of the people in the state had health insurance -- including private insurance, Medicare and Medicaid -- but 7 percent did not.
Romney wanted to do something about this 7 percent -- some 460,000 people.
"Because right now in my state, and probably in your states, as well," Romney explained in a Jan. 26, 2006, presentation at the Heritage Foundation, "part of your insurance premium is paying for the people who don't have insurance, because when they get sick, they do go to the hospital for treatment, they just go well after the disease has become very acute, it's very expensive to treat, the hospital provides care, somebody has to pay for that, and it is built into your hospital costs and into your insurance premiums."
Among the 460,000 people in Massachusetts who did not have health insurance, Romney said, 106,000 earned incomes below the federal poverty level. They were eligible for Medicaid, but had not signed up. Romney's solution: Sign them up.
But then there were another 150,000 uninsured people who earned more than 100 percent, but less than 300 percent, of the poverty level. Romney made these individuals the main targets of his policy.
"These people were generally younger than the average population, predominantly male and single," Romney told Heritage. "Eighty-two percent were high school graduates, 15 percent (had) college degrees, 78 percent are working ... and the majority are working full-time."
For these 150,000 people, Romney offered new government subsidies to buy health insurance. Who would pay for these subsidies? Not just Massachusetts taxpayers, but all taxpayers -- thanks to a waiver the federal government would give Massachusetts concerning how it could spend federal Medicaid money.
"Let's take someone who is earning one times federal poverty level," Romney explained at Heritage. "They're an individual, so their annual income is $9,570. Their weekly premium under our plan is $2.30 a week -- 1.3 percent of their income. We pick up $66.93.
"The 'we,'" Romney candidly admitted, "is a royal 'we' here. It is the federal government, as well as a little bit of the state, as well as our insurance companies and providers. All of us together are participating in that subsidy."
Romney said that as a person's income rose from 100 percent of poverty to 300 percent, this subsidy "we" were giving them would diminish.
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