Tuesday, April 11, 2006

Romney's Health Care

Shark/Shep's been on top of this issue; Curt Gielow's meandering around the edges. Mitt Romney says there are ways:

Only weeks after I was elected governor, Tom Stemberg, the founder and former CEO of Staples, stopped by my office. He told me, "If you really want to help people, find a way to get everyone health insurance." I replied that would mean raising taxes and a Clinton-style government takeover of health care. He insisted: "You can find a way."

I believe that we have. Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced. And we will need no new taxes, no employer mandate and no government takeover to make this happen.

Some 20% of the state's uninsured population qualified for Medicaid but had never signed up. So we built and installed an Internet portal for our hospitals and clinics: When uninsured individuals show up for treatment, we enter their data online. If they qualify for Medicaid, they're enrolled.

Another 40% of the uninsured were earning enough to buy insurance but had chosen not to do so. Why? Because it is expensive, and because they know that if they become seriously ill, they will get free or subsidized treatment at the hospital. By law, emergency care cannot be withheld. Why pay for something you can get free?

The solution we came up with was to make private health insurance much more affordable.

Insurance reforms now permit policies with higher deductibles, higher copayments, coinsurance, provider networks and fewer mandated benefits like in vitro fertilization--and our insurers have committed to offer products nearly 50% less expensive. With private insurance finally affordable, I proposed that everyone must either purchase a product of their choice or demonstrate that they can pay for their own health care. It's a personal responsibility principle.

Another group of uninsured citizens in Massachusetts consisted of working people who make too much to qualify for Medicaid, but not enough to afford health-care insurance. ...The big question we faced, however, was where the money for the subsidy would come from. We didn't want higher taxes; but we did have about $1 billion already in the system through a long-established uninsured-care fund that partially reimburses hospitals for free care. The fund is raised through an annual assessment on insurance providers and hospitals, plus contributions from the state and federal governments.

Instead of single parents, most were young single males, educated and in good health. And again, because health insurance will now be affordable and subsidized, we insist that everyone purchase health insurance from one of our private insurance companies.

We have received some helpful enhancements. The Heritage Foundation helped craft a mechanism, a "connector," allowing citizens to purchase health insurance with pretax dollars, even if their employer makes no contribution. The connector enables pretax payments, simplifies payroll deduction, permits prorated employer contributions for part-time employees, reduces insurer marketing costs, and makes it efficient for policies to be entirely portable

Medical transparency provisions will allow consumers to compare the quality, track record and cost of hospitals and providers; given deductibles and coinsurance, these consumers will have the incentive and the information for market forces to influence behavior.

The bolded items signifiy changes that Wisconsin will have to make in order to replicate the system Romney built.

More on the topic from Ponnuru, sort of a counter-point:

Less congenial to conservatives are the various business taxes in the bill, which Gov. Romney concedes serve no useful purpose. They wouldn't raise much revenue.

As those taxes suggest, Romney's vision was better than what the legislature produced. "In our state and most other states, the advocates are saying, Look at all the people who are uninsured," he says. "States are adding more and more of these populations to Medicaid. Medicaid is not a very good insurance plan. There are no co-pays and no deductibles. It's a terrible insurance product. We instead want to move toward insurance."

To that end, Romney proposed eliminating laws that made it hard to sell cheap, no-frills, high-deductible catastrophic insurance policies. (Make insurance more attractive to healthy young people, and you might not need to force them to buy it.) But the legislature refused to eliminate mandates on coverage, and required zero deductibles for the new plans for low-income people.

Clearly, were Wisconsin to de-couple "employment" from "health insurance," there are ways to do it which may NOT include an 8%-15% "fee" on payroll. But those methods include items which are utterly foreign to our Legislature's typical mindset...

1) Reduce "mandates" in insurance coverage, such as in vitro, chiropractor care, etc., which raise costs without providing a commonly-utilized benefit;

2) Make the premium payments pre-tax (meaning not subject to Wisconsin income tax;

3) Force providers to post their prices and quality statistics in such a way that consumers can utilize them in the decision-making process.

Employers who are interested in making this happen have a VERY easy 'selling point' available: raise the compensation of their workers in lockstep with the reduction in burden--in other words, if the employer contributes $750.00/month to healthcare premiums, promise a $750.00/month raise to employees who do not take health insurance.


M.Z. said...

This is one I've read about and am interested. Compulsory benefits are a major issue, and it is good that this has been addressed. My understanding of the tax was that it was for employers that did not provide coverage. I do have some concern over treating healthcare as wages, because it creates a disincentive to hire breadwinner males.

Dad29 said...

I don't think so.

The salary/wage increase occurs if and only if the individual does NOT take "company" health bennies.