#267: Romney’s Iron Stethoscope

Published April 11, 2011

Five years after Mitt Romney passed his universal health care law in Massachusetts, the former governor is still spinning its results. Some people think he should be touting his success as a model for President Barack Obama’s national health care approach. Most on the right think otherwise, and that Romney cannot “defend his indefensible position that RomneyCare was right for Massachusetts but that he wouldn’t impose it on the rest of the country.”

What’s interesting is that Romney’s gone more on the offensive of late in ways that allow for criticism of his own namesake policy, as in a speech last week, in ways I wish he’d expressed earlier in the process:

He pivoted to health care, an issue that has been described as the albatross around his neck in the coming Republican primary because many conservatives loathe the individual mandate in the Massachusetts reform plan he implemented as governor that served as a model for Obama’s plan.

“And by the way, if we get the chance to talk about health care – which will be fun, because of course he does me the great favor of saying that I was the inspiration for his plan – I’ll say if that’s the case, why didn’t you call me?” he said to the crowd, growing more animated. “Why didn’t you ask what was wrong? Why didn’t you ask if this was an experiment, what worked and what didn’t and I would have told him, I know, what you’re doing, Mr. President, is going to bankrupt us.”

As Jennifer Rubin notes at the Washington Post, Obama just went straight to the source that matters, consulting “the expert who designed Romney’s Massachusetts plan, MIT professor Jon Gruber.

What is bizarre, however, is Romney’s reference to costs. His plan did nothing to contain costs, a goal that Gruber said was not part of the plan. So is Romney confessing that his own plan would “bankrupt” his state?

Whatever Romney decides to do on this front in the 2012 election, the opinion shift on the matter among the citizens who have to live within his plan is tangible. When Romney passed his health care law, it was initially quite popular – more so than Obama’s similar law at the national level. But now that the policy has been in place a few years, the approach’s popularity has sunk. According to a new poll released last week and conducted by non-partisan sources, Suffolk University and WHDH-TV, when asked if Massachusetts’ health care laws were working or not, only 38 percent said yes, while 49 percent said no.

As John R. Graham points out, in 2008, polls found support for Romney’s reforms of 69 percent approval – far more popular than Obama’s law has ever been (according to Rasmussen, consistent majorities of American voters support its repeal). This suggests that as people are forced to follow former House Speaker Nancy Pelosi’s advice about the bill, and find out what’s in it over the coming year, the law’s tepid popularity will undergo a similar sinking sensation – indeed, this may turn out to be the high point of the national law’s popularity.

As for Romney’s ability to distance himself from his unpopular policy, the people of Massachusetts are grim. In the Suffolk University poll, a followup question asked registered voters: “Do you think Mitt Romney’s role in health care here will help or hurt his presidential campaign?” The results: only 22 percent said it would help Romney, while 54 percent said it would hurt.

While that’s a question whose answer will depend on Republican primary voters, the poll respondents are likely to prove correct – particularly if Romney and the press still haven’t learned the right lessons. David Paleologos, director of the Suffolk University Political Research Center, put it in blunt terms in the WHDH report: “Health care continues to define Mitt Romney and weigh down his presidential campaign like an iron stethoscope.”

This is good fodder as description of political failure. But as a description of policy failure, I’ve always preferred a subhead from a Boston Magazine piece that ran last year: “The Patrick administration likes the notion of universal health coverage. It just doesn’t want to pay for it.”

— Ben Domenech



When it comes to Obamacare’s exchanges, it’s time to applaud New Mexico Gov. Susana Martinez, who vetoed her state’s exchange bill and expressed frustration about the lack of flexibility on the part of the federal government, and to boo Virginia Gov. Bob McDonnell, whose position on the exchanges is profoundly disappointing. Last week, Virginia became the eighth state to pass a ban on abortion coverage for insurance plans within the exchange (the others are Arizona, Idaho, Louisiana, Mississippi, Missouri, Tennessee, and Utah), which is a victory for McDonnell but also an indication of his policy naiveté.

As John Graham explains:

In Virginia, Gov. Bob McDonnell has forced amendments to prevent health plans participating in his state’s Obamacare exchange from covering abortions – at least, that’s what he thinks he’s done. In fact, U.S. Secretary of Health & Human Services Kathleen Sebelius will decide whether Virginia’s health plans will cover abortions, because she’s the one who will certify the exchange – or not. Because 100 percent of Obamacare’s subsidies to individuals in the exchanges come from the federal government, Sebelius’s whims will decide the rules governing the cash flows. Virginia will simply be stuck with paying salaries to the bureaucrats and fees to the vendors and consultants who operate the exchange.

The larger question to Republican governors is why anyone would proceed along these lines, when the lesson thus far from states like Florida and Louisiana is that the threats from Sebelius are hollow? Graham again:

What is motivating these Republicans? They have surely fallen for the talking point that if they don’t implement a state-based exchange, the federal government will rush in and impose one on them. Oh, really? Is that what they’ve seen in Florida, where Gov. Rick Scott has gone so far as to send back the initial federal grant that his predecessor wheedled out of Secretary Sebelius?

In fact, the U.S. Department of Health & Human Services has shown zero will or ability to establish exchanges in states that resist Obamacare, and that is hardly going to change.

SOURCE: The Virginian Pilot


The headline on a report from Politico heralds the dark side of those dangerous Medicaid block grants, but just doesn’t deliver. According to the piece, “Democrats describe the future of Medicaid block grants in the worst terms” because:

In an analysis of [Rep. Paul Ryan’s] budget proposal, the Congressional Budget Office said governors would have to “reduce payments to providers, curtail eligibility for Medicaid, provide less extensive coverage to beneficiaries or pay more themselves” to produce the $771 billion in federal savings Ryan wants over 10 years.

A spokesman for Ryan wouldn’t comment on the CBO analysis but pointed to Tuesday’s letter to Ryan from four Republican governors – Republican Governors Association Chairman Rick Perry of Texas, Vice Chairman Bob McDonnell of Virginia, Barbour and Gov. Chris Christie of New Jersey – calling Medicaid “an antiquated, federal maze of regulations and mandates” requiring “months and sometimes years of negotiations for even modest changes.”

But the reality is, as Michael Ramlet of the American Action Forum notes in the latter part of the piece, state Medicaid programs could save money in a host of ways if given block grants to begin with, and the shift in how the money is given to them is all about allowing for the flexibility to invest money according to their state’s priorities. In some cases, yes, this will mean cutting back on eligibility – but it will also mean making the system actually work for the needs of their citizens. In a time of economic downturn, these cuts are already going to happen, as we have seen [http://blog.cleveland.com/metro/2011/04/medicaid_proposal_transforms_s.html]in Ohio] and [http://www.azcentral.com/arizonarepublic/news/articles/2011/04/08/20110408statebudget-sign0408.html]Arizona] – it’s just a question of whether we think it’s a good thing to give states more flexibility as they work through reform of their systems, or force them to abide by rules and regulations that are often nonsensical and duplicative.

SOURCE: Politico


As long as we’re talking Medicaid: Cato’s Jagadeesh Gokhale has finalized his study of the five most populous states, outlining his prediction of the costs of Obamacare’s Medicaid expansion. The full white paper is well worth your time:

Unless it is repealed, the Patient Protection and Affordable Care Act of 2010 promises to increase state government obligations for Medicaid by expanding Medicaid eligibility and introducing an individual health insurance mandate for all U.S. citizens and legal permanent residents. Once PPACA becomes fully effective in 2014, the Medicaid benefits of those who become newly eligible and enroll into Medicaid will be almost fully covered by the federal government through 2019, with federal financial support expected to be extended thereafter. But PPACA provides states with no additional federal financial support for new enrollees among those eligible for Medicaid under the old laws. That makes increased state Medicaid spending from higher enrollments by “old-eligibles” virtually certain as they enroll in Medicaid in response to the individual mandate to purchase health insurance.

This study estimates and compares potential increases in Medicaid expenditures from PPACA by the five most populous states: California, Florida, Illinois, New York, and Texas. State Medicaid spending is projected to increase considerably even without PPACA in California, Florida, and Texas, with smaller increases in Illinois and New York. With PPACA, projected spending is actually reduced for California, while spending increases are positive and large for Florida and Texas. Both Illinois and New York have the potential for considerably higher enrollments and increased expenditures.

In direct contrast to the Kaiser Family Foundation’s study (which is widely cited in the press), which as Gokhale notes “appears to have used fixed enrollment rates for new- and old-eligibles based on 2007 data,” the Cato study cites historical enrollment trends and makes what is in my view a far more realistic prediction about the future enrollment burden for states.

SOURCE: Cato Institute


A new study published in the Journal of Health Economics, written by Robert W. Fairlie, Kanika Kapur, and Susan Gates, takes an interesting approach to the question of whether bundling health insurance and employment discourages business creation: “comparing the probability of business ownership among male workers in the months just before turning age 65 and in the months just after turning age 65.”

Individuals with access to a spouse’s health insurance plan are much more likely to become self-employed. The study found consistent evidence that men and women with poor family health and no access to spouse health insurance were significantly less likely to give up an employer plan and start a new business than were those with access to insurance through their spouses. RAND’s estimates suggest that entrepreneurship lock for men is just over 1 percentage point relative to the annual base business creation rate of 3 percent. Although business entry rates were lower for women, similar patterns across health insurance coverage emerged.


Self-employment rates rise when Medicare becomes available. The study also found a large and statistically significant increase in business ownership rates during the month when a worker turns 65 and qualifies for Medicare. Analyses determined that self-employment rates did not jump up at other ages (55–64, 66–75). Further, the increase in business ownership in the month an individual turns 65 was not due to other factors, such as retirement, Social Security, or pension eligibility.

This is an example of something everyone in small business has believed for years, borne out by further study. It’s one more sign that disconnecting health coverage from employment isn’t just a smart approach to health policy, it’s also a smart approach to economic policy.

SOURCE: Rand Corporation