HealthBeat FYI: RomneyCare 2.0

August 27, 2007

Republican Presidential hopeful Mitt Romney announced his health care platform last week. In a marked departure from the reforms he helped to create as Massachusetts's governor, his presidential platform relies heavily on tax reform and free-markets.

A column in the Review and Outlook section of today's Wall Street Journal discusses several aspects of the plan, which appears to promote several ideas developed by the NCPA: free markets for health care, tax credits for the purchase of private insurance plans and the promotion of Health Savings Accounts. Below are excerpts from the WSJ article, with links to corresponding NCPA publications:

Though he still regards that state's 2006 "universal" health insurance program as one of his signal achievements as Governor, his new proposal drops the most coercive elements, such as the individual mandate and the "pay or play" sanctions on businesses.

Will Mandatory Health Insurance Work?: http://www.ncpa.org/pub/ba/ba569/

In his new plan, Mr. Romney would address the core problem: distortions introduced by the tax code. Businesses are allowed to deduct the cost of providing health insurance to their employees, but individuals can't do the same. This bias creates third-party payer problems for the insured and raises prices for everyone else. The Romney plan would allow those who purchase policies on the individual market to fully deduct all premiums, deductibles and copays, thus restoring the tax parity of health dollars.

Also constructive is Mr. Romney's proposal to turn today's open-ended Medicaid entitlement into federal block grants to the states, and do likewise for federal uncompensated care funds. That would give states maximum flexibility to tailor health plans to their own needs. Mr. Romney hopes the states will create plans to cover the lower- to middle-income uninsured -- and ideally, to help them buy their own private policies.

Designing Ideal Health Insurance: http://www.ncpa.org/pdfs/livesrisk_24.pdf

It would also offer incentives for health savings accounts, which set aside pre-tax dollars for medical expenses. And it would include medical malpractice reform with teeth -- specialized health courts and caps on punitive and non-economic damages.

A Brief History of Health Savings Accounts: http://www.ncpa.org/pub/ba/ba481/

Romney has stated before the he believes states should have the sovereignty to create their own health care plans and encourage their citizens to purchase private insurance. But he stops short of promoting a national health insurance market place and allowing insurance companies to sell policies across state lines.

Rather than forcing people to buy plans approved by their state, a better idea would be to allow insurers to sell plans across state lines. This would retain the federalist approach, but individuals could choose which state regulations to buy into, creating a "regulatory marketplace." We suspect there'd be an insurance exodus from Massachusetts, which, for instance, requires plans to cover chiropractic services and in vitro fertilization.

Creating a Competitive Health Insurance Market: http://www.ncpa.org/pub/ba/ba558/

Read the full column in the Wall Street Journal: http://online.wsj.com/article/SB118816930834109244.html?mod=opinion_main_review_and_outlooks

NCPA health care experts are available to further explain these revolutionary health care reforms.

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