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As I was glassing over the news that I have missed over the last week, I came across this item from May 21 edition of the Wall Street Journal:
The New Big Dig
May 21, 2008; Page A18Mitt Romney’s presidential run is history, but it looks as if the taxpayers of Massachusetts will be paying for it for years to come. The former Governor had hoped to ride his grand state “universal” health-care reform of 2006 to the White House, but his state’s residents are now having to live with what he and the state’s Democratic Legislature passed. As the Boston press likes to say, it’s “the new Big Dig.”
The showpiece of RomneyCare was its individual mandate, a requirement that all Massachusetts residents obtain health insurance by July of last year or else pay penalties. The idea was that getting everyone into the insurance system would eliminate the “free-rider” problem of those who refuse to buy insurance but then go to emergency rooms when they’re sick; thus costs would fall. “Will it work? I’m optimistic, but time will tell,” Mr. Romney wrote in these pages in 2006.
Well, the returns are rolling in, and the critics look prescient. First, the plan isn’t “universal” at all: About 350,000 more people are now insured in Massachusetts since the reform passed. Federal estimates put the prior number of uninsured at more than 657,000, so there was a reduction. But it was not secured through the market reforms that Governor Romney promised. Instead, Massachusetts also created a new state entitlement that is already trembling on the verge of bankruptcy inside of a year.
Some two-thirds of the growth in coverage owes to a low- or no-cost public insurance option. Called Commonwealth Care, it uses a sliding income scale to subsidize coverage for everyone under 300% of the federal poverty level, or about $63,000 for a family of four. Commonwealth Care also accounts for 60% of statewide growth in individual insurance over the last year, and the trend is expected to accelerate, perhaps double.
…
One lesson here is that while pledging “universal” coverage is easy, the harder problem is paying for it. This year’s appropriation for Commonwealth Care was $472 million, but officials have asked for an add-on that will bring it to $625 million. For 2009, Governor Deval Patrick requested $869 million but has already conceded that even that huge figure is too low. Over the coming decade, the expected overruns float in as much as $4 billion over budget. It’s too early to tell how much is new coverage or if state programs are displacing private insurance.
The “new Big Dig” moniker refers to the legendary cost overruns when Boston rebuilt its traffic system. Now state legislators are pushing new schemes to offset RomneyCare’s runaway expenses, including reductions in state payments to doctors and hospitals, enlarged business penalties, an increase in the state tobacco tax, and more restrictions on drug companies and insurers.
Mr. Romney’s fundamental mistake was focusing on making health insurance “universal” without first reforming the private insurance market. The “connector” that was supposed to link individuals to private insurance options has barely been used, as lower-income workers flood to the public option. Meanwhile, low-cost private insurers continue to avoid the state because it imposes multiple and costly mandates on all policies.
Hailed at first as a new national model, the Massachusetts nonmiracle ought to be a warning to Washington. Barack Obama and Hillary Clinton are both proposing versions of RomneyCare on a national scale, with similar promises that covering everyone under a government plan will reduce costs. Mr. Obama at least argues that more people would be covered were insurance more affordable. But his solution is Massachusetts on steroids – make insurance less expensive for policyholders by transferring the extra costs onto the government. Mrs. Clinton likes that but also wants the individual mandate, despite the mediocre results so far.
The real problem in health care is the way the tax code and third-party payment system distort incentives. That’s where John McCain has been focusing his reform efforts – because that really does have the potential to reduce costs while covering more of the uninsured – and Republicans ought to follow his lead.
In this respect paradoxically, we can be thankful that Massachusetts ignored the cost problems that doomed other recent liberal health insurance overhauls in California, Pennsylvania, Wisconsin and Illinois. The Bay State is showing everyone how not to reform health care.
I’m not trying to stir up contreversy, and a lot of my beef with Romney was buried a long time ago, but the fact remains that his defining achievement as the governor of MA is turning out to be a disaster. Granted, as one commenter (Illinoisguy) noted when I raised this point earlier, if Romney had stayed in MA, he could’ve adjusted it, but the facts are not pretty, as pointed out by the libertarian leaning Pacific Research Institute:
The program is in intensive care, surviving only on massive infusions of other people’s money. The plan’s boosters celebrate that it’s covered 342,000 people. Quite an accomplishment until we understand that of these, 176,000 are enrolled in nearly free or entirely free plans — free to enrollees but not state and federal taxpayers. Another 55,000 were simply enrolled in Medicaid.
This isn’t a new trend where the blame can be solely placed on the shoulders of current MA Governor Deval Patrick. Commonwealth Care has been a disaster waiting to happen.
The CATO Institute predicted this from the getgo. This article from last December:
Massachusetts has done better at signing people up for subsidized coverage. No surprise: People are all too happy to sign up if others pay the bill – and Romney extended subsidies well into the middle class – a family of four earning $63,000 per year qualifies.
That “success” here translates to failure on another front: The cost of the program has exploded; it’s running $150 million above the original projection for this year alone.
Nor has the reform succeeded in holding down other costs. Insurance premiums in the state are expected to rise 10 to 12 percent next year – double the national average. While many factors surely contribute to that jump, one reason is that the new bureaucracy that the legislation created – called “the Connector” – has been adding new regulations and mandates.
This program has turned out to be a disaster, and although he had left office by the time the program could be properly evaluated, Romney was responsible. Liz Mair predicted this back in 2006, when Romney was still in office.
She noted that:
RomneyCare has not even been fully implemented yet, and a cost overrun of $151 million in 2007 alone is already in the cards, perhaps because the RomneyCare financial model assumed the wrong number of uninsured in Massachusetts (the Census Bureau puts it at 748,000, but RomneyCare assumes only 500,000). But any needed hike in taxes won’t be pushed through by Romney—he’ll be out of office when the bill comes due, and when extra federal dollars will likely have to be allocated to Massachusetts to help cover the shortfall between RomneyCare’s cost and its budget.
Ms. Mair was correct on the eventual cost overrun, and on the outcome of the program. Since leaving office, Romney has done well to define himself, and has turned himself into a credible possibility for the vice presidential nod, despite the fact that his largest accomplishment at the time of the launch of his candidacy has turned out to be a failure.
I’m not starting another crusade against Mitt Romney. In fact at this point, I think he’d be a better pick than some of the names that are being seriously considered. However, since those who are in the running for the vice presidential nod are being debated, such as Lieberman (who I have strongly and publicly opposed), and Bobby Jindale (who I think would be one of the stronger picks), one must reevaluate the pros and cons of putting Mitt Romney on the ticket.
May 28th, 2008 at 7:47 pm
Yes it will hurt him. I could almost love him, if it were not for his health care non-sence.
May 28th, 2008 at 7:51 pm
Sorry non-sense.
May 28th, 2008 at 8:05 pm
Good point. It’s not like McCains name hasn’t been on some of the WORST legislation ever…(sarcasm)
May 28th, 2008 at 8:07 pm
The “facts” presented here are anything but. At the time of passage, there were about 420,000 people uninsured in Massachusetts, and the goal was to get more than half of them insured, while creating incentives (albeit negative incentives) for those still uninsured, but who could afford to be insured, to get insured. Several months ago the state determined that more than 280,000 citizens previously uninsured were now insured, more than meeting the original target for success. If that number is now up to more than 340,000, so much the better.
No taxes were raised to pay for the program, and it was financed largely by dramatically reducing the number of people relying on emergency rooms for their primary care. Average monthly costs to the consumer of buying health insurance was significantly reduced. The predictable cost overruns were largely due to the input of the legislature, which was more than 80% Democrat. Still, on net balance, the program is a remarkable success, particularly in light of the alternative; Hillarcare, or worse, Obama Care.
Face it: the public wants universal health care, and they’re going to have it. There’s not much we can do about that. What we CAN do is try to solve the problem in as free market a way as possible. That’s why conservative carping about Mitt’s plan is irresponsible. Unless you want a single-payer system, that is.
May 28th, 2008 at 8:25 pm
so did the free rider emergency care problem get better?
May 28th, 2008 at 8:25 pm
so did the free rider emergency care problem get better?
May 28th, 2008 at 8:27 pm
Yes Romney Care is not as bad as Hillacare or Obama Care, but who says we Americans want a Socialized system like CANADA? This is not Conservatism at all.
May 28th, 2008 at 8:40 pm
ohio-
its also a far cry from socialized medicine. Having been raised in a country with socialized medicine I can tell you that the Mass plan is nothing like it.
This isnt all that different than states than mandating that you have auto ins coverage or you get fined, or states like CA that mandate(and took over) earthquake insurance post Northridge quake.
It is fair that folks like you and me pay for the non payers. Those non payers tend to be the biggest users of the healthcare system. The goal of the plan as I see it is to make those freeloaders pay into the system to get something out of it. Looks like it is accomplishing that part at least
May 28th, 2008 at 8:51 pm
I have no problem making free-loaders pay, I just fear what this system will lead to. Remember, CANADA did not become socialist over night, it took years and it started with innocent little non-sense that eventually got out of control.
May 28th, 2008 at 9:11 pm
No
What hurts Romney’s bid is that he missed the 60s.
May 28th, 2008 at 9:24 pm
No, since Mitt has NO chance already… Hillary-Romneycare is irrelevant at this point.
May 28th, 2008 at 9:32 pm
Oh puh-leeeze.
May 28th, 2008 at 9:34 pm
CBL,
Whether he has a chance or not is totally dependent on whether McCain is bright enough to choose him….personally, I doubt that he is, but we’ll see.
May 28th, 2008 at 9:40 pm
“Granted, as one commenter (Illinoisguy) noted when I raised this point earlier, if Romney had stayed in MA, he could’ve adjusted it…”
Hah. Well, if that’s the case, maybe Romney should’ve actually run for reelection instead of bolting after one term to start preparing his presidential candidacy.
May 28th, 2008 at 9:50 pm
I hope McCain doesn’t choose Romney. If he doesn’t take Romney who seems the obvious pick to me, that would totally justify my not voting for McCain and I would have a clear conscience. Running with McCain may also derail Romney’s promising future, when I hope we will see mor of him in the election cycles to come. But if McCain is sharp enough to pick a competent conservative like Romney, he might reel some of us back in. Might not. Might.
May 28th, 2008 at 10:09 pm
This reminds me of the scene from Tommy Boy when Chris Farley asks David Spade if a suit makes him look fat. “No you’re face does,” quips David Spade.
No, Romney’s healthcare proposal doesn’t make him an unattractive VP candidate. His shameless pandering does.
May 28th, 2008 at 10:13 pm
Get over the fact Romney smashed your guy by about 50/1!
May 28th, 2008 at 10:19 pm
50/1? What are you talking about?
May 28th, 2008 at 10:25 pm
#17:
Which is exactly why Romney is the nominee. After all, his hugely expensive campaign succeeded beyond all expectations. Who could forget his crushing of Mike Huckabee in Iowa? Or his landslide victory over McCain in New Hampshire. I mean the great winning ability of Romney is just why we are going to coronate him as our nominee in Minneapolis.
Oh wait…..
May 28th, 2008 at 10:26 pm
It was a bold plan put into place. The version today is definately different than the first rolled out plan. The democrats took control of it and put a lot of expensive stuff into it.
I am glad though it happened because it is a model to look at and see how the more government involved it is, the more expensive it becomes. Also, if this version is expensive, one can now get a visual on how expensive the Obama or Hillary version will be. It helps show how absurd the democratic version will be.
Making note to myself: cut back on my expendetures for when the democrats raise federal income tax another 20% to pay for universal healthcare.
May 28th, 2008 at 10:29 pm
19 – Where Romney is valuable to McCain is putting Michigan, Nevada, Colorado, and a few others into play. If that is what McCain needs, then Romney will be the guy. Otherwise Mitt will not be VP.
May 28th, 2008 at 10:32 pm
McCain should be able to carry Nevada and for that matter New Mexico and Colorado on his own. If McCain is so concerned with doubling-down on the West, pick Huntsman. He offers Romney’s western strengths without the baggage.
May 28th, 2008 at 10:34 pm
As someone said on an earlier thread, Romney is the essence of Generic Republican in this race because Romney is never willing to stand up to the Republican Party. The MA GOP is liberal, so Romney runs as a liberal Republican. The national GOP is conservative, so Romney runs as a conservative. All in all, Romney acts as the servant of the Republican Party, not its leader. That’s not a good place to be in when the Republican Party is only slightly more popular than eating your vegetables.
This year, even the South is ready to give the finger to the Republican Party. Just look at the polls of the MS, KY, NC, and TX Senate races if you don’t believe that. The GOP Senate Minority Leader may actually be unseated. By a Dixie electorate. It’s fine for McCain to pick a conservative veep. But he needs to pick one who has a history of telling the GOP establishment where to go.
May 28th, 2008 at 10:38 pm
Have you seen this video of Paul Ryan? Why was he not in charge of the GOP House in 2006?
http://www.youtube.com/watch?v=F9VRKCGBSo4&hl=en
May 28th, 2008 at 10:54 pm
One exciting part of this years VP search is that John has so many fun variables to look at. A lot of good candidates with a lot of different ramifications. That is if he is playing chess with the pick and trying to use it to maneuver a win with it.
Jonathan – This could be the election that surprises happen in a few places. With the Hillary voters angry at Obama, but not wanting a pro-life McCain they have a quandry. With the conservatives distanced from Johns republicanism they have a quandry. With the Obama voters acting so sure of themselves it is pushing people to corners where they are in a quandry not wanting to vote for Obama. It should be fun.
May 28th, 2008 at 11:04 pm
I would think that all of you RomNots would get tired of trotting out the same old arguments, which have been debunked countless times before. This old saw about the MA Health Care Plan is a good case in point. Never let the facts get in the way of a good laugh at the boy from MA.
Unfortunately, Romney is a man of his word, in that he would run with McCain if asked. That, despite the fact that running on the same ticket as Mr. Democrat Light would force him to defend McCain’s positions. At which time, both the media and you RomNots will trot out the old Flip Flop meme.
For my peace of mind (and the peace of mind of all of Romney’s other supporters), I hope that McCain continues to make decisions based on what looks best to the other side of the aisle.
May 28th, 2008 at 11:10 pm
McCain-Dwight Schrute > McCain-Romney
http://electjeff.wordpress.com/2008/05/15/mccainschrute-2008/
May 28th, 2008 at 11:23 pm
#26: “I would think that all of you RomNots would get tired of trotting out the same old arguments, which have been debunked countless times before. This old saw about the MA Health Care Plan is a good case in point.”
Gee, thanks for taking the time to explain why everyone else is wrong about RomneyCare!
May 28th, 2008 at 11:43 pm
I’ve begun wondering if this board has true conservatism at heart, or just winning at heart. Pro-Life vs. Pro-Choice debates, gay marriage legalized debates, whether McCain should pick Lefty Lieberman as a running mate.
It’s all making me think there are some wolves in sheep’s clothing here, slowly stripping off the “sheep” costume until they devour us all.
May 29th, 2008 at 12:16 am
Some of us admittedly don’t have your definition of “true conservativism” at heart, ogrepete.
Some of us recognize that this is the big tent party (a rant I’ve already been on today). Some of us recognize that this is the party of Ronald Reagan and Theodore Roosevelt and Abraham Lincoln and Dwight Eisenhower, all of whom are completely different from each other politically. Libertarians, So-Cons, Fi-Cons, Progressives, Neo-Cons…They’re all conservatives in a different sense of the word. So, yes, I do not have your brand of conservativism at heart. Doesn’t mean I’m not a conservative.
May 29th, 2008 at 12:35 am
A very sad situation indeed. I am a three legged stool conservative, and I am not feeling at all like this party wants my vote. Unless McCain exhibits a lot more intelligence than many of his followers on here, he will lose literally millions of votes. They will sit home or form a third party. Its pretty sickening!
May 29th, 2008 at 1:14 am
30 – Many different political approaches, but it really depends on the needs of the country at that time if it really works. Great leaders lead the areas of greatest need. Which is why right now more than ever the biggest needs are being fiscally conservative, experienced at national security, placing proper judges, and stimulating economic growth. Everything else is second fiddle. Of course that is my one opinion of the millions.
May 29th, 2008 at 2:31 pm
This post presumes Mitt Romney WANTS to be Vice President to John McCain. I think that assumption is not proveable.
May 29th, 2008 at 3:10 pm
Ogrepete,
You’re talking to the wrong guy. I’m actually to the right of most people here on a majority of issues.
May 29th, 2008 at 6:31 pm
Tommy, I understand where you’re coming from a little better, having read most of the full post, but the title of your post is why I posted #33.
My post #29 is a result of malaise I’m feeling when we’re on a Republican board and yet we can’t seem to agree about anything. It’s given me a deep sense of gloom ahead, unfortunately.
Some basic parts of the Republican platform that I’ve known and agreed with all my adult life seem under attack here (especially government’s role in abortion and the definition of marriage). I understand our country isn’t perfect. I have lived in another country (Argentina) for two years and I can tell you that this country is far, far superior in many ways. It just seems like we’re turning our backs on those peculiar characteristics that made the USA a great nation in the first place. Sigh…
May 29th, 2008 at 7:05 pm
Well it’s shocking that something involving Mitt Romney, which costs hundred of millions of dollars, ends up an abject failure. It reminds me of his failed run for President. Am I alone? lol.
May 29th, 2008 at 9:44 pm
#22 Jonathan–
Mitt Romney’s real problem is his Mormonism, which is Huntsman’s problem as well.
May 30th, 2008 at 11:08 pm
McCain’s problem is that he is just so disingenuous. He has changed his spots so many times over. You don’t know what he really stand for – his positions always change. His personal life isn’t even successful, let alone his political life. I wouldn’t trust this guy near my wife any day of the week.
July 24th, 2008 at 10:10 am
[...] May 21, 2008 Wall Street Journal editorial (backup link) noted how CommonwealthCare aka RomneyCare is working in the real world: Mitt Romney’s [...]
July 24th, 2008 at 10:37 am
[...] the government-run fiasco he foisted on Massachusetts — the one that’s falling apart (backup link) while national conservatives are mostly pretending not to notice. Additionally, he has blamed [...]