Saturday, January 28, 2012

How bad is Romneycare?

Someone needs to write an honest evaluation of the first health care system in this country that had an individual mandate, meaning you were required by law to have health insurance.

First, it's not the end of the world, or capitalism, nor has it turned Massachusetts into a socialist gulag, a place where the classes wage war, or where bureaucrats rule on every interaction with your doctor. For most people, the healthcare law has barely caused a blip.

Unlike most of my posts, this one won't discuss the financial impacts of Romneycare because I couldn't find clear sources for that information. I can't answer some important questions like how much it costs the state, and whether it has lowered or raised costs. I can report that it's pretty popular in Massachusetts, with 63% approval.

When it was first implemented, I heard complaints where I worked from people who were going without health insurance and now had to buy it. Maybe I should be more sympathetic or more libertarian, but I've been convinced by the economic argument behind the universal requirement. (Here's the capsule version: the pooling of risk doesn't work financially unless low-risk people are required to join the pool. So suck it up for the greater good. That's what we do with taxes.)

Now my 20-something daughter is benefiting from the program. She signed on to the health insurance exchange website, and figured out relatively easily which policy she wants. It's affordable, perhaps subsidized, and she didn't have the anxiety of being turned down. I'm glad she lives in a state that makes it this easy.

Some critics have decried that--what motivation will people have to get good jobs if there's subsidized health insurance? Probably nearly the same motivation as in the standard case (the paycheck, interesting work, self-sufficiency, being useful to society), but without the anxiety that a medical issue can send her into a modern version of the Minotaur's labyrinth.

So how bad is Romneycare? Well, I'm happy with it.


I'm aware that arguments based on anecdotes aren't reliable. Arguments that ignore fiscal concerns are even worse. It would be good to be able to report the extra savings or expense due to Romneycare, but I couldn't find the statistics. Perhaps that's because it's incredibly hard to sort out the confounding factors, such as unpaid medical bills, higher state costs, costs offset by federal Medicaid payments, a sweetened deal for MA by Medicaid, and personal costs of insurance premiums or patient-paid medical bills. So I'm left with only the anecdotal evidence, which is decidedly pro-Romneycare.



Anastasios said...

Interesting. This fits with most of what I have heard, but it is good to have a first hand account.

From your comments here and at Bernstein's blog I take it you are not thrilled with the way this was translated onto the national stage because of the lack of appropriate cost controls. I can understand that, although I'm not convinced that an inefficient Obamacare is not still superior to the current trajectory even on economic grounds, much less social and moral ones.

However, even leaving those issues aside, I think it was inevitable that any translation of a state plan to the national stage would entail the kind of hypertrophy that you, perhaps rightly or perhaps not, bemoan. The environment within which national policy has to be made, with its vastly expanded number of actors and intersts, simply leads to greatly increased complexity and therefore usually to higher costs. There are many other models one might imagine. Some, such as the Canadian system, are both much simpler and much cheaper while delivering arguably better results. But the current political constellation won't allow for doing the "right" thing -- if by right thing you are concerned with a system that covers everyone at much cheaper cost. Given that some national version of Romneycare seems the only viable option, and that means a hypertrophied version. Obamacare is probably the best anyone can realistically hope for.

Oh, I realize also there is an argument for taking steps that aren't fully comprehensive -- expanding SCHIP and the like. Whatever the economic/moral/social arguments for that (personally I think they don't hold water, but they are there) I don't think it was politically realistic. Liberals are now a plurality in the Democratic Party for the first time in perhaps 30 years (self-professed moderates had heretofore been the largest group). They barely stood for Obamacare and certainly would not stand for a non-universal approach. Like them or not (and they can sometimes be very hard to get along with) Democrats can no more tell them to sit down and shut up than Republicans can say that to traditional conservatives (by which I mean the old Reaganites, not the Tea Party). And after all this time it really is hard to argue with them. If every other advanced democracy guaranteed medical insurance to all citizens some time ago, the argument that we, the wealthiest of all, cannot is more than faintly problematic. And given the political realities, we are back to super-Romneycare again.

Anastasios said...

To follow up on my own comment, I also realize that there is an argument that goes "well if the Democrats had just negotiated with the Republicans in good faith, etc.". I understand that a lot of people believe that, and even many moderate Democrats may have back in 2009. But that requires Republicans willing to bargain, and on the evidence I just don't see that they ever were (witness Olympia Snowe who sat in committee meetings for months and then voted against the bill because she said she hadn't had time to study it). That is a shame, because I think they had the good side of some issues such as tort reform. But here I think Bernstein is right that, particularly on social policy, Republicans as a whole are more interested in scoring political victories than in solving problems. Or I suppose it would be more fair to say that as a whole they just don't see problems in situations that Democrats and many Independents abhor. The latter is actually more problematic in negotiations than the former. You can often find a way to subvert a cynic, but if someone honestly doesn't believe that the government has any role in helping the uninsured, what can you hope to say to them that will lead to fruitful negotiations?

ModeratePoli said...

@Anastasios, Thanks for commenting at my blog. You make many good points, so perhaps it's unfair of me to pick out some weaker ones.

You're right that my dissatisfaction with Obamacare is the cost. When we're running large deficits and have a huge debt already, it's not the time to enact a huge new program. It wouldn't be better to pare it down to more essential elements.

I know that isn't the trend with health insurance, which is perhaps one reason why insurance keeps going up so fast.

I think it's a weak argument that a national-sized program is going to have sprawl and accretions. That's like saying graft is inevitable, but it isn't when people stand up to it.

As for the shift in the center of power within the Democratic party toward liberals, it's not a benefit to the party or the country because a more liberal party can't maintain political power (as demonstrated in 2010). They are too far from the general center-right stance of the country, and they haven't done enough outreach to move the temperature of the country to their take on the issues.

That said, the Republicans demagogued even sensible parts of the bill, like the cost-containment best practices board IPAB.

One final point--I don't agree that someone taking a principled stand against government growth is worse than partisans trying to score points. The principled opponent is a more difficult adversary, but a more honest person, and worth listening to. Naturally, I have a post on the topic.

Anonymous said...

Here's some answers to the financial impact of "Romneycare":

Anastasios said...


Good points. Just a couple of (mild) rejoinders. First of all, I was not making a case as to whether the liberal tilt of the current Democratic party is good or bad, for the country or for the party. I was just making a general observation that this is the tilt of the party, and when assessing what is politically possible one has to take this into account. Like I say, for good or ill Nancy Pelosi is the minority leader of the House, and a very popular one with her troops. It simply isn't realistic to think that the party or the President can ignore that fact, any more than the Republicans can simply shut up the Tea Party.

In terms of the issue with the Republicans and cynicism vs other things, I don't think the issue is a principled stand against government spending or government size, but just a radically different understanding the purpose of government altogether. That is something else again. But that is a discussion for another thread.

I think the point about the size of the ACA is a very important one, and the key turning point of a lot of discussions. Just what are the "essential" parts? Can these parts function without the other parts? Is the mandate essential? Are the subsidies essential? Are the exchanges? What is "essential" coverage for health care plan? Is it even moral or in any way defensible for a relatively wealthy person to attempt to make those distinctions about the coverages that a relatively poor person needs or doesn't need? The answers to these things are not at all obvious. They are, at root, political (and to a certain extent wonkish).

I am persuaded, personally, by the wonkish arguments that attempting to extend coverage under the private system inevitably leads to a mandate, else the additional costs born by the insurance companies will lead to a catastrophic spiral. I'm further persuaded by the moral arguments that we cannot claim to be a civilized nation among other advanced democracies without extending universal coverage as all others do (here I think the Pelosi/liberal points are unanswerable).

But when we come to the nitty gritty of what coverages are included, etc., we are inevitably to the point of unattractive political haggling and political backbiting. And back to political reality. The current fact is that for whatever reason, Republicans are not interested in health insurance reform that would have a meaningful impact on the problem (as you yourself have pointed out in another thread, however well meant their proposals they would, at best, lead to lots of people having questionable policies, which is better than having none, I guess, but still). I don't think we can just leave the problem alone, for reasons that are economic, social, and moral. That means passing proposals with Democratic votes, and that means appeasing the liberals, or rather of negotiating something with them that they will swallow hard and vote for. There just isn't a realistic option, given the electorate, party structures, organization and institutions of Congress, etc.

It isn't a good place we are in. But unless we perpetually kick all sorts of cans down the road, this is the mode of operation we have available. And that means that Obamacare or something very like it, messy and unsatisfying as it is (and remember that liberals as a whole despise it and not a few are hoping the conservative justices kill it) is probably the best solution we can hope to approach. The system just won't allow anything else.

Anastasios said...

I probably shouldn't have said that liberals as a whole "despise" ACA. Better to say that the consensus of the left is one of deep scepticism, with worry that this is a boondoggle that will enrich private insurance companies and wealthy investors while delivering substandard care and laughably inferior public health results. Center-left types as a whole (as opposed to hard liberals) would much rather have passed a Federal Health Plan based on the health benefits available to federal employees and members of Congress (perhaps the most basic option, which is what I have and isn't all that ritzy), with rates charged on a sliding scale according to ability to pay and entry controlled by proof that one had no other realistic insurance options available. Thus at least the potential to control costs would have been very strong by basing the reimbursement rates on medicare standards. But try getting Joe Lieberman or Ben Nelson to go for that.

ModeratePoli said...

@Anastasios, In response to a few of your points:

1. You're right about what are "essential" services. That is the wrong word. Perhaps I should talk about "core coverage" or coverage for "extraordinary" events.

2. I too am persuaded by the wonk argument about mandates, as I said in the post.

3. Have I given you the impression that I'm against Obamacare? There are aspects that I don't like about it, but I'm not for repeal. I was trying to say that Romneycare is pretty good, and Obamacare will probably be OK too. On the other hand, the process has cost the Dems a lot more than needed if it had been managed better. The chief culprit in that is as much Nancy Pelosi as Lieberman or Nelson.

Anastasios said...


No I did not get the impression you are for repeal of ACA. I am being a blabbermouth as is my habit.