Preface: In the past few weeks Governor Romney has received withering criticism for his support for the Massachusetts Health Plan and his seemingly hypocritical opposition to Obamacare. Frankly, his responses to this criticism have not been stellar. I sometimes wonder if he realizes that he is on firm ground here. So as a favor to the Governor, I offer this prepackaged statement:
My fellow Americans. Not a day goes by when some of my colleagues in the Republican Party accuse me of hypocrisy for supporting the Massachusetts Health Plan when I was governor of that great state, while opposing Obamacare. I cannot respond to this accusation in a simple sound bite. So please lend me your ears for five minutes while I explain my position.
My job as governor was to implement policies reflecting the wishes of the people of Massachusetts. By approving the Massachusetts Health Plan, I did what my constituency elected me to do. I am proud to have signed the legislation authorizing the Massachusetts Health Plan, but this does not mean that I support Obamacare.
My critics point out two similarities between the two plans. Both plans mandate health insurance purchase and both create health insurance exchanges. Both features were right for Massachusetts. Health insurance markets do not work perfectly; that is why there isn’t a single state, red or blue, that does not heavily regulate them! Many individuals are shut out from buying health insurance. If they get sick, they face financial ruin. And if they are unable to pay for their medical care, providers shift the costs onto the rest of us.
The health insurance exchange levels the insurance playing field and assures that everyone can purchase insurance at affordable rates. Every health economist with whom I have spoken tells me that the exchange will not work without a purchase mandate. Once everyone is buying insurance, the cost shift will end; this will hold down health insurance costs for everyone.
This was a terrific idea for the people of Massachusetts. A progressive state, most residents supported expanding coverage for the uninsured. Most residents also agreed that we should solve this problem through the private sector, provided that we could put in place some rules to correct insurance market failures. Blessed with the lowest rate of uninsurance in the nation, the cost of implementing our plan was manageable and we had no need to slash provider payments to make the plan work. And I should point out that the purchase mandate does not violate the state constitution.
The plan was right for Massachusetts. This does not mean it is right for other states. Some states may prefer not to expand health insurance coverage. Others may want to expand insurance by giving vouchers to the uninsured rather than creating an exchange. And a few states may want to banish private health insurance and create a single payer system. All of these ideas should be explored and in doing so we can learn from our mistakes and adjust our rules accordingly. But we have Obamacare, and we have to live by a single set of rules.
Obamacare doesn’t just set rules for the entire nation. It greatly increases the federal government’s role through a dramatic expansion of Medicaid. It creates a new agency with unprecedented power to control Medicare spending without input from elected officials. It funds all of this with deep cuts in payments to our doctors and hospitals. And of course, it gives us a federal purchase mandate that is facing an unknown fate in the U.S. Supreme Court.
As governor, I understood that important decisions about education, law enforcement, housing, and healthcare are best made by local officials who are responsive to the needs of their communities. I have no regrets about supporting the Massachusetts Health Plan, an innovative plan to meet the unique needs of the people of Massachusetts. I believe that other states should consider the Massachusetts plan as a possible model for their own reform efforts. But I would never be so presumptuous as to believe that other states should be mandated to follow the Massachusetts example. Every state must be allowed to make such decisions themselves. President Obama and the Democratic party disagree, and seek to concentrate all power in Washington. I am running for President because I want to stop them.
David Dranove, PhD, is the Walter McNerney Distinguished Professor of Health Industry Management at Northwestern University’s Kellogg Graduate School of Management, where he is also Professor of Management and Strategy and Director of the Health Enterprise Management Program. He has published over 80 research articles and book chapters and written five books, including “The Economic Evolution of American Healthcare and Code Red.” This post first appeared at Code Red.