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Romneycare: the Wreckage
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Here’s more confirmation of the economic damage Romneycare did in the Bay State. The Boston Herald has the exclusive results of an analysis by Suffolk University’s Beacon Hill Institute.

Romney’s baggage. It is so heavy:

The Bay State’s controversial 2006 universal health-care plan — also known as “Romneycare” — has cost Massachusetts more than 18,000 jobs, according to an exclusive blockbuster study that could provide ammo to GOP rivals of former Gov. Mitt Romney as he touts his job-creating chops on the campaign trail.

“Mandating health insurance coverage and expanding the demand for health services without increasing supply drove up costs. Economics 101 tells us that,” said Paul Bachman, research director at Suffolk University’s Beacon Hill Institute, the conservative think tank that conducted the study. The Herald obtained an exclusive copy of the findings.

“The ‘shared sacrifice’ needed to provide universal health care includes a net loss of jobs, which is attributable to the higher costs that the measure imposed,” said David Tuerck, the institute’s executive director.

…Despite Romney’s vaunted business acumen as a successful venture capitalist, Bachman said the former governor “was a little naive about what would become of the law.”

The Beacon Hill Institute study found that, on average, Romneycare:

•    cost the Bay State 18,313 jobs;

•    drove up total health insurance costs in Massachusetts by $4.311 billion;

•    slowed the growth of disposable income per person by $376; and

•    reduced investment in Massachusetts by $25.06 million.

And remember that RomneyCare relied on FedGovCare as a sturdy crutch: “He also noted the state’s health-care costs have been heavily subsidized by billions of dollars in federal aid through a Medicaid waiver program.”

As I’ve observed previously, RomneyCare and ObamaCare share not only the same ideological architects, but similar waiver programs in part set up to benefit Big Labor – via Boston Globe in Feburary:

Massachusetts regulators granted more exemptions last year to residents who said they could not afford the health insurance required by the state, waiving the tax penalty for more than half of those who appealed, according to state data.

State officials said they excused the majority of waiver applicants in large part because of the protracted sour economy, which made insurance unaffordable for more people. Under the 2006 state law that requires most residents to have coverage, regulators have significant latitude to authorize waivers by taking into account factors such as a home foreclosure.

The number of people seeking exemptions in 2010 was about the same as in 2009, and state figures show that roughly 98 percent of residents were insured last year.

Even as Republicans and many states wage a bitter battle in Congress and the courts to block the mandatory insurance requirement in the national health care law, the provision appears to retain broad acceptance in Massachusetts.

Regulators’ flexibility may be part of the reason.

“We aren’t going to make someone pay just to make them pay,’’ said Celia Wcislo, a director of 1199SEIU United Healthcare Workers East and a member of the Connector Authority, which oversees Massachusetts’ health care law and grants the exemptions.

Background on the politicized “Connector Authority” via Cato:

When Romney signed his plan he claimed “a key objective is to lower the cost of health insurance for all our citizens and allow our citizens to buy the insurance plan that fits their needs.” In actuality, insurance premiums in the state are expected to rise 10–12 percent next year, double the national average.

…Although there are undoubtedly many factors behind the cost increase, one reason is that the new bureaucracy that the legislation created-the “Connector”-has not been allowing Massachusetts citizens to buy insurance that “fits their needs.”

Although it has received less media attention than other aspects of the bill, one of the most significant features of the legislation is the creation of the Massachusetts Health Care Connector to combine the current small-group and individual markets under a single unified set of regulations. Supporters such as Robert E. Moffit and Nina Owcharenko of the Heritage Foundation consider the Connector to be the single most important change made by the legislation, calling it “the cornerstone of the new plan” and “a major innovation and a model for other states.”

The Connector is not actually an insurer. Rather, it is designed to allow individuals and workers in small companies to take advantage of the economies of scale, both in terms of administration and risk pooling, which are currently enjoyed by large employers. Multiple employers are able to pay into the Connector on behalf of a single employee. And, most importantly, the Connector would allow workers to use pretax dollars to purchase individual insurance. That would make insurance personal and portable, rather than tied to an employer-all very desirable things.

However, many people were concerned that the Connector was being granted too much regulatory authority. It was given the power to decide what products it would offer and to designate which types of insurance offered “high quality and good value.” This phrase in particular worried many observers because it is the same language frequently included in legislation mandating insurance benefits.

At the time the legislation passed, Ed Haislmaier of the Heritage Foundation reassured critics that “the Connector will neither design the insurance products being offered nor regulate the insurers offering the plans.” In reality, however, the Connector’s board has seen itself as a combination of the state legislature and the insurance commissioner, adding a host of new regulations and mandates.


For example, the Connector’s governing board has decreed that by January 2009, no one in the state will be allowed to have insurance with more than a $2,000 deductible or total out-of-pocket costs of more than $5,000. In addition, every policy in the state will be required to phase in coverage of prescription drugs, a move that could add 5–15 percent to the cost of insurance plans. A move to require dental coverage barely failed to pass the board, and the dentists-along with several other provider groups-have not given up the effort to force their inclusion. This comes on top of the 40 mandated benefits that the state had previously required, ranging from in vitro fertilization to chiropractic services.

Thus, it appears that the Connector offers quite a bit of pain for relatively little gain. Although the ability to use pretax dollars to purchase personal and portable insurance should be appealing in theory, only about 7,500 nonsubsidized workers have purchased insurance through the Connector so far. On the other hand, rather than insurance that “fits their needs,” Massachusetts residents find themselves forced to buy expensive “Cadillac” policies that offer many benefits that they may not want.

Governor Romney now says that he cannot be held responsible for the actions of the Connector board, because it’s “an independent body separate from the governor’s office.” However, many critics of the Massachusetts plan warned him precisely against the dangers of giving regulatory authority to a bureaucracy that would last long beyond his administration.

(Republished from by permission of author or representative)
• Category: Ideology • Tags: Health care