As governor of Massachusetts, Mitt Romney (R) shepherded through his universal health care reform plan that is now being cited as a model for other states.
Key to the plan was an “individual mandate,” meaning that everyone in the state will be required to have health insurance or pay a penalty.
But wait. Health insurance can be expensive—especially in Massachusetts, which passed reforms more than a decade ago which almost destroyed its individual health insurance market. Massachusetts has never been willing to roll back those reforms—as Kentucky has done—which means the Bay State has some of the highest health insurance prices in the country.
That’s important because one of the primary reasons people don’t have health insurance is they can’t afford it. So if the state tells low-income uninsured workers they have to buy health insurance, or be penalized if they don’t, the state has to make sure that health insurance is “affordable.”
No problemo, said the generous Massachusetts elected officials. They would just subsidize the low-income workers’ policies.
Of course, fulfilling THAT promise depends on how much the policies cost. Governor Romney estimated that qualifying coverage would cost, oh . . . say $200 a month for an individual.
Mind you, the people of Massachusetts haven’t seen a $200-per-month policy is a decade or more. But that’s what the governor suggested.
Well, the bids are in and the basic policies are estimated to cost about $380 a month—nearly twice what the governor originally estimated.
Problemo! Not only does that mean that middle-class uninsured workers have to come up with significantly more money to buy coverage, the state will have to roughly double its own cost estimates for subsidies. That could put a little crimp in the state budget—and therefore in taxpayers’ wallets.
Alternatively, the state can do what governments usually do when they overpromise on savings: revert to price controls.
A Massachusetts newspaper last week quoted state Sen. Richard T. Moore, co-chair of the Joint Committee on Health Care Financing, “That only feeds the argument that maybe we should do as we do with auto insurance, since we mandate that, maybe we should regulate rates for health plans.”
As for us, we are eager to hear the governor explain how unrealistic promises, individual mandates, state budget shortfalls and price controls make him the free market presidential candidate.