Monday, May 18, 2009

Review of Mitt Romney's "The Answer is Unleashing Markets- Not Governments"

What is Mitt Thinking?

I believe I have a pretty good feel for Mitt Romney. I share his conservative philosophies. I think I understand his cultural and religious background. But my understanding for who Mitt is does not necessarily translate into an understanding of what Mitt does.

Take the op-ed piece that we're about to critique. Mitt Romney wrote this interesting piece on health care policy that appeared in the May 18 edition of Newsweek. In it he promotes aspects of the Massachusetts Health Care Reform law of 2006 that he helped enact as governor. His views in this editorial may be influential in providing congressional Republicans the backbone for the compromise on health care reform that they will make with Democrats this summer. But why does Mitt, a self-proclaimed free market guy, make the recommendations that he does? For example, why does Mitt claim to support a mandate that every person must be insured? (The first point in his essay.)

Mitt proposes tax penalties for those who by state standards can afford insurance, but do not buy it. That's the sort of argument that should be coming from the managed-market guys, not the free-market guys. The managed-market guys would claim that forcing everyone into the market, especially the healthy and deliberately-uninsured young adults, will bring more people into the insurance pool and bring down the price of premiums for everyone. We would expect Mitt to argue that mandating the use of a certain commodity runs counter to market principles and counter to freedom in general. Obligatory purchase of commodities negates the free in free market.

It turns out that the historical Mitt, the Mitt we think we know, would agree with us. The plan that he proposed as governor of Massachusetts had no individual mandate attached. The state was struggling with free-riders showing up at the emergency room without health insurance and leaving the state with the bill. Mitt proposed that state residents without insurance post a $10,000 bond to cover unpaid hospital bills. Mitt opposed the individual insurance mandate. It was the democratic legislature pushed the compulsory individual insurance mandate.

Why then, is the mandate the first point of his health care proposals? Why not a plan that directly addresses the issues of free-riders at the emergency room or on bankruptcy law instead of a direct attack on the market? In fairness, we point out that the Massachusetts individual mandate was softened with provisions allowing the purchase of catastrophic coverage and Health Savings Accounts to fulfill state requirements. But should we have to have health insurance to be law-abiding Americans? Does Mitt really believe in mandatory health insurance (history says no), or is this just political expediency?

Mitt's plan would use funds once dedicated to the payment of emergency room bills to the payment for health insurance for the Massachusetts's needy and projects huge state savings with the change. Whether this change is financially advantageous for the state in the long run remains to be seen. We have to be wary of any state-provided service. It seems human nature, even for Americans, to like all things "free" and politicians love to win votes with the promises of increased government services. Mitt cites the original Medicaid bill, which was supposed to cost $500 million, but now costs $500 billion to operate. I think we can safely assume that the overall cost of his state-purchased health insurance policies will similarly balloon.

The rest of the essay is more what we would expect from Mitt. He proposed increasing the portability of health insurance, touted the effectiveness of co-insurance plans, supported increasing patient information about cost and quality of care, and recommended reform of Medicaid and Medicare. Very importantly, he states that any health care reform should occur on a state, not a national, level.

So, what are we to think overall of Mitt's proposed plans? Regardless of objections we may have, his proposals are going to be much more conservative and market-oriented than anything that comes out of Congress this summer. And as the Heritage Foundation pointed out, the mandates in Mitt's plan are less problematic than they appear.

And yet, as freedom loving Americans, we should be able to expect something more from conservative leadership. As the editorial title states: the answer is unleashing markets, not government. I believe I speak for true conservatives and freedom-lovers when I say I believe the state has no business whatsoever providing health care for its citizens. Ideal health care reform removes government from health care. Ideal health care reform removes restrictions on the market. Innovation becomes legally possible, the patient is empowered as a consumer, prices are driven down and accessibility increases. The ideal reforms removes tax burdens on Americans and allows them to care for and rely on each other instead of picking their pockets and forcing reliance on Uncle Sam.

These are the principles that should be promoted by conservative leadership. Compromise happens after we champion the ideal. I worry that Mitt may be rejecting the ideal and his past principles in order to embody the compromise. I like Mitt, so I hope I am wrong. Conservatives everywhere are being tempted and taunted to embrace this new moderate Republicanism with which McCain lost the election. I hope that Mitt and other conservative leaders hold to their principles and continue in honorable service promoting the ideal.

Rusty Scalpel