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.
"You will see that as the individual's income rises they pick up a larger and larger share of the premium," said Romney. "And, ultimately, when they exceed 300 percent of the federal poverty level, they are able to pick up their entire premium ..."
"So, this is a plan," Romney said, "where people are able to get an insurance product they can afford -- $2.30 a week -- and as their income over their career goes up, they are able to get ongoing insurance with the same company."
But what happens if this person disdains the generosity of the royal "we" and still does not want insurance?
In Romney's plan, they would not be allowed that choice. In fact, even people unsubsidized by the royal "we" would no longer have that choice.
"To tell people in our society today that they have to go out and buy insurance would be unfair and wrong," Romney said. "Because right now, they don't have products they can afford. And if people are poor, they don't have any subsidy that they can rely on to help them get a product. So, it would be crazy to say to people, hey, you're (un)insured, you better go get it. They can't afford it.
"But once we put in place the reforms I am describing, with new affordable products as well as a subsidized product, where your premium can be as low as $2.30 a week, now everybody can get insurance," said Romney.
Romney then explained his offer you cannot refuse: "And that is, look, now that we have these products available for you, we want everybody to get insurance and you have responsibility of having insurance, and we are going to mandate that you have insurance."
So, did Romney's plan to insure the 7 percent who had been uninsured work?
In 2008-2009, two years after Romney signed his plan, 4.96 percent of the people in Massachusetts remained uninsured, according to the Kaiser Family Foundation. As of the first half of 2011, according to Gallup, 5.3 percent of the people in Massachusetts remained uninsured.
In exchange for upping the percentage of insured in Massachusetts by about 2 points -- from approximately 93 percent to approximately 95 percent -- Romney gave the state the power to order people to buy a product they did not want and put a Republican imprimatur on the idea that government should subsidize health insurance for families of four earning up to what the Heritage Foundation estimated was $60,432 in 2005 dollars.
"You may call this an individual mandate," Romney said at Heritage. "I don't. I call it the personal responsibility principle."
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