In his speech yesterday at the Hoover Institution on health care reform, Paul Ryan said the real problem in health care is “runaway inflation” and that the Republican party needs “to coalesce around a complete reform agenda” focused on bringing down costs. This is exactly the opposite of the approach employed by Mitt Romney in Massachusetts.
In simple terms, there are two ways to deal with high health costs and the problem of the uninsured. You can focus on lowering costs, and if you succeed, not only will you have achieved your immediate ends, but more people will then be able to afford coverage and fewer will remain uninsured. Or you can focus instead on covering more people, which, even if you succeed, will do nothing to lower costs and will likely raise them. Both Obamacare and Romney’s efforts in Massachusetts have employed the latter approach.
A recent survey by the Kaiser Family Foundation and the Health Research & Educational Trust shows that annual premiums for employer-based family coverage went up 9 percent over the past year, even though the vast majority of Obamacare has yet to go into effect. The L.A. Times reports that that’s the largest premium increase in six years. According to Politico, even the president of Kaiser — an organization that’s extremely supportive of Obamacare — admits that this spike partly resulted from Obamacare’s coast-to-coast mandate that insurers cover “children” up to age 26 on their parents’ policies.
As for Romney’s efforts in Massachusetts, his own economic advisor, Glenn Hubbard, coauthored a study estimating that, between 2006 and 2008, Romney’s health care overhaul “increased single-coverage employer-sponsored insurance premiums by about 6 percent” versus what they otherwise would have been.
Even Romney essentially admits that his efforts in Massachusetts failed to lower costs. In his book, No Apology, he favorably quotes Harvard professor Atul Gawande’s review of his health care law, which includes this passage: “The Massachusetts plan didn’t do anything about medical costs.” On the next page (p. 179 on the hardback version), Romney himself writes that “achieving universal access alone cannot drive [cause?] overall health-care costs for everyone to actually go down,” adding immediately thereafter, “That is the task that remains.”
The most important thing, however, is not Romney’s past actions; it’s his intentions going forward. To restate the advice I offered in a longer piece, he should stop defending his health care law on policy grounds and should instead emphasize that he was giving the voters of arguably the most liberal state in the whole country — the only real competition is Rhode Island and New York — exactly what they wanted (while not shying away from the fact that he spearheaded those efforts). He should admit that he has learned from his experience and now knows firsthand that the coverage-first approach fails to reduce costs, and he should declare that the GOP approach to replacing Obamacare needs to be the one that Ryan has recommended: focusing on costs. Moreover, he should add that, unlike President Obama, he can learn from his mistakes.
On the health care front, Republicans first and foremost need to be able to trust that their nominee will succeed in repealing Obamacare. But they also need to be able to trust him or her with its replacement.
It’s crucial that Romney get health care right.