What Mitt Romney should but won’t say about RomneyCare and health care reform
On Thursday, Mitt Romney, a yet-to-be-announced presidential candidate, will try to get the RomneyCare Massachusetts health insurance disaster off his back.
Romney experimented with health insurance markets in Massachusetts, and his stab at increasing access to health services while containing costs has failed big time. Health insurance is more expensive and health care is harder to get in Massachusetts under Romney care. And 100,000 still are uninsured.
In his speech, he needs to spell out the failures in RomneyCare and explain what he has learned from those failures. He should not play the blame game.
Then he should propose a new experiment for the country and the states. I think putting the health insurance and health care reform burden on uninformed, self-interested and gullible state legislators and governors would be a huge mistake. Even more than members of Congress, state legislators are over influenced by the experiences that they, their families, their friends and their biggest contributors have had and are having with specific illnesses, medical procedures, drugs, medical devices and providers.
Indeed, I think Medicaid should be federalized and standardized rather than continue with the state involvement that we have today. It's just to complicated for state politicians and bureaucrats to manage cost effectively and for patients. And I'm a libertarian Republican who is against socialized medicine and centralized planning. But I've also been covering health policy since 1976, and I think Medicaid is broken because both members of Congress and members of state legislators have voted for their personal power, not for patients nor taxpayers.
Private health insurance markets should be re-regulated to give consumers and insurers the freedom to buy and offer products that meet the needs of consumers at a profit for insurers.
Both consumers and insurers need financial incentives to buy right and create cost-effective products. The key is to make sure that consumers know what they are buying and have the freedom to buy as much or as little coverage as they want so long as they end up paying for all of their health care without tax credits or government subsidies unless they truly need subsidies. No one who needs subsidies pays taxes, which means those who don't pay income taxes should not get tax credits of any kind. No one should be allowed to declare bankruptcy so they can avoid paying the uninsured portions of their medical and health care bills.
People should have strong financial incentives to buy the insurance that would cover the catastrophic losses that they could not afford to put on their credit cards. People who under insure should be required to sell their homes, cars and any other assets to raise the money to pay their medical bills, and they should be put on payment plans that hurt until they get their bills paid.
High deductible insurance is what you should buy to avoid the pain of paying catastrophic medical bills and the cost of fixing cars when they are wrecked. If you don't buy the insurance, you should suffer the consequences, not taxpayers nor people who do buy insurance and pay their bills.
Take all employers out of the health benefits business. Employers buy what's good and affordable for them, not what's good and affordable for their workers. Employers game the system, the tax codes and their workers on health benefits. After politicians, employers are the most dishonest players in health care.
Thus, there should be no tax credits for anyone who buys health insurance. It should be an after tax expense for everyone. Tax incentives are for the favored few, which, amazingly in this case, are those who make enough money to pay income taxes.
And tax incentives promote wasteful spending on low deductible policies that pay insurers to hold insureds' money until they need to buy preventive care and routine medications that should be paid for out of their pockets. We don't use insurers to pay for oil changes in our cars or for the maintenance of our homes, and we should not pay insurers to hold our money until we needed it for preventive and routine health care services and products. We don't pay banks to hold our savings until we need our money.
Further, tax incentives redistribute incomes in ways that increase government spending, increase financial incentives for politicians to pander to the favored few and kill jobs.
Health insurers should be regulated to ensure that they create and sell products that consumers with 4th and 5th grade educations can understand and evaluate. They should be required to spend the time and money needed to make sure that every customer understands insurance, health care and how their health plans will work and what they will cost.
Insurance is complex, and if insurers offer too many options, no one will know what to do. Part D Medicare's drug benefit plans have taught even those of us who believe in consumer choice and free markets that insurers can make decision making very difficult. Indeed, the politicians who write the laws and regulations force insurers to confuse consumers, imho. New health laws and regulations should be easy to understand, comply with and enforce.
Even though Romney knows all this, I doubt that he'll take this approach.
Like all politicians, he'll pander to special interests in health care and government as well as in the insurance business. He'll suck up to the moocher nation because most Americans believe in free lunches---tax credits, government subsidies, government programs and no deductible health insurance policies.
Sadly, few Americans want to pay their own way, which is why we have a huge budget deficit and totally dysfunctional health insurance and health care markets.