Guest blog post by Michael Cannon
You know things aren’t going well in Massachusetts when supporters of RomneyCare write “there’s some evidence that the reforms signed into law by Mitt Romney in 2006 are struggling.” That’s how The Washington Post’s Ezra Klein puts it in a post defending RomneyCare. The New Republic’s Jonathan Cohn offers a similar defense.
Klein mentions only a few of the difficulties confronting Massachusetts. Here are a few more:
- The Commonwealth Fund reports that even though Massachusetts already had the highest health insurance premiums in the nation, premiums rose faster post-RomneyCare than anywhere else; 21-46 percent faster than the national average.
- A recent study estimates that RomneyCare has so far increased employer-sponsored health-insurance premiums by an average of 6 percent.
- The success that Klein sees in Massachusetts’ individual market — which accounts for just 4 percent of the private market — is merely the product of shifting costs to workers with job-based coverage.
- Contrary to Klein’s post hoc spin that RomneyCare “was never an attempt to control costs,” Romney himself promised that “the costs of health care will be reduced.”
- Aaron Yelowitz and I find evidence suggesting that uninsured Massachusetts residents are responding to the individual mandate not by obtaining coverage but by concealing their insurance status. Coverage gains may therefore be less than official estimates suggest.
- Evidence is mounting that, despite stiffer penalties than ObamaCare will impose, increasing numbers of people are gaming the individual mandate by only purchasing health insurance when they need medical care. Such behavior could ultimately cause the “private” insurance market to collapse.
Nevertheless, the Klein/Cohn thesis is basically that costs have been climbing and employers have been dropping/curtailing health benefits for decades. So you can’t blame that stuff on RomneyCare. We should instead be thankful that Massachusetts enacted a new raft of government price controls, mandates, and subsidies to protect residents from those features of “the American health-care system.”
The only problem is that “the American health-care system” is the product of the old raft of government price & exchange controls, mandates, and subsidies. The largest purchaser of medical care in the country (and the world) is Medicare. Medicaid is second. The Left complains so much about fee-for-service medicine fueling rising health care costs and reducing quality, you’d never know that their beloved Medicare program is the primary reason for its dominance. Likewise, the reason why employers are dropping and curtailing coverage is that the government turned the private health insurance market into an unsustainable employment-based system that is doomed to unravel. Cohn’s book documents the inhumanity of that system so well, you’d think it would sour him on the sort of centralized planning that created it. I could go on…
RomneyCare and its progeny ObamaCare are attempts by the Left’s central planners to clean up their own mess. If Klein and Cohn want to defend those laws, pointing to the damage already caused by their economic policies won’t do the trick. They need to explain why government price & exchange controls, mandates, and subsidies will produce something other than what they have always produced.
Cross-posted at Cato At Liberty