The Massachusetts health care law signed in 2006 by Governor Romney has three main parts:
1. It requires all citizens to buy a state-approved health insurance plan,
2. It provides subsidies to certain low-income people to pay for insurance,
3. It requires employers to provide health insurance to their employees or pay a fee to the state.
I agree with parts 1 and 2. Health care is of course, a complex subject. But the crux of our problem is that individuals are not taking care of themselves. For decades the tax code has encouraged employers to provide a very expensive benefit to employees, health insurance.
This began during a period of wage controls during World War II. So the idea of providing health insurance was an unintended consequence of bad economic policy. The longer it has become customary for employers to provide coverage to employees the less Americans must be self-reliant and thrifty.
It’s time to decouple health insurance from employment. John McCain proposed such a reform plan in his presidential campaign. It was his best idea. It would have taxed health benefits to the employees and offered them tax savings if they purchased their own private insurance plans. This came in for attack by Obama as a tax increase, and in truth it is–if the employee will not take responsibility for his or her own health care.
Conservatives should embrace self-reliance. And any state that mandates individuals to buy their own health insurance is moving in the right direction. The challenge to Obamacare is that there is no constitutional authority to mandate individuals to purchase health insurance at the federal level. This is true. The Constitution does not enumerate such a power to Congress; therefore the Tenth Amendment reserves it to the states. Governor Romney wisely took that approach in 2006. People are not entitled to health care or health insurance coverage under American law. They have to pay for it. And if a lot of Americans would rather shift the cost of their health care onto society by deferring insurance until they get sick, then they need to be forced by their states to get off the dole.
Part Two of the Romney bill, subsidizing people up to 300% of the federal poverty level who are not already on some type of coverage is probably necessary. Good health insurance is expensive, and even minimal coverage with a high deductible is costly to the working poor. So a state subsidy paid through a state agency created to purchase coverage for such people in bulk, is better than leaving them uncovered. Of course, the subsidies should end if a low-paid worker’s income rises. It’s true that subsidies are a disincentive to savings and work. But subsidizing the purchase of minimal insurance coverage is less expensive than the alternative: paying much higher costs for such people later in life when they are really ill.
I don’t agree with Part Three of the Romney law, requiring employers to purchase health coverage for their employees for the reason I’ve stated here. Coverage should not be employer-based. It’s an individual responsibility of everyone to buy their own health insurance. But Governor Romney opposed this part of the law. It was included as an overall compromise, which in large part, is beneficial. His decision to accept the employer mandate and sign the bill into law was an acknowledgement that he had obtained the best bill he could from an overwhelmingly Democratic legislature that opposed Part 1, the individual mandate.
Romney could take the position that health care is mostly a state problem. If every state enacted an individual insurance mandate then we would begin to break the terrible fiscal link between health insurance and employment. We have Medicare for senior citizens (even though most of them can and should be required to buy their own health insurance) and Medicaid for the poor, but for everyone else, we need to make people be self-reliant.
This should come from the states and not Congress, which has no such power. Romney has been so pummeled by conservatives for the Massachusetts law that he has not been able to articulate a vision for health care. He will need to do so. And maybe conservatives could actually look at the details of Massachusetts law and realize much of it is to be commended.