Why Romney won't expand on the "state solution to a state problem" argument

Wall Street Journal columnist Kimberley Strassel (Romney’s Health Care Duck) is surprised Mitt Romney hasn’t gone further in explaining his position that while RomneyCare was right for Massachusetts the very similar ObamaCare isn’t right for the country as a whole. It’s a good question to raise, but Strassel’s explanation is surprisingly shallow and faulty. She says Romney should argue that, “his state is now living proof  that individual mandates, health subsidies for the middle class, and government control over insurance plans. medical services, and prices raise prices and squelch choice.” These assertions are demonstrably false –see the latest Blue Cross Foundation report to learn more– but refuting her claims about Massachusetts is not the purpose of my post.

RomneyCare/ObamaCare was and is workable in Massachusetts. Low baseline rates of uninsurance, high incomes, low unemployment, innovative non-profit health plans and providers, along with enlightened attitudes toward the potential of government to do good are all contributors.  The state’s economic strength is largely a product of its highly educated workforce, which can command high wages. It’s a heck of a lot easier for a company to pay a $10,000 insurance premium for an employee who makes $100,000 rather than one making $25,000. In Massachusetts we had the luxury of being able to afford to put everyone into comprehensive insurance, and then start tackling costs as we are doing now.

Would RomneyCare work in a state like Texas, with lower wages and higher rates of uninsurance? The answer is no. Unlike Massachusetts, Texas can’t afford to pay subsidies to all the low income and middle income people who are uninsured. And, taken as a whole, their employers are much less able to afford insurance for Texas workers. So Texas faces a different and less palatable set of choices than Massachusetts. If they want to get everyone into coverage, they have to settle for coverage that’s stripped down and/or they have to raise taxes or do more cost shifting from the commercial market. If they are satisfied letting people fend for themselves, they have to settle for wide disparities in access.

ObamaCare does have a chance of working in Texas, because it brings with it a pile of federal money that helps make the tough tradeoffs go away.

So maybe Strassel should give Romney more credit. If Romney asserted that each state should tailor its own solution, it would mean acknowledging reality. And in this Republican primary season, reality is not on the ticket.


March 23, 2012

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