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Responding to Romney's Op-Ed on Abolishing the Affordable Care Act, and His "Alternative"

Posted: 03/23/2012 3:52 pm

On the second anniversary of the passage of the Patient Protection and Affordable Care Act (PPACA), Mitt Romney penned an op-ed for USA Today. One must respond immediately, because Mitt may Etch-a-Sketch himself to a different position before this is published.

And, the only reason this is even necessary is because the administration has done an exceedingly poor job of explaining the many virtues of the Act. Sandra Fluke eloquently explained the benefits of the PPACA better than the administration has done in two years.

But, in case Mitt is spending his time praising the economy under President George W Bush -- after all, Romney's economic plan will land us in the same place, or worse! -- Romney's vision may persist a news cycle or two, so it may be worth answering his ridiculous claims, lies and the ineffective nothingness he proposes to replace the PPACA.

Romney's first claim is that the PPACA is: "an unfolding disaster for the American economy, a budget-busting entitlement, and a dramatic new federal intrusion into our lives." Note that these words are courtesy of Frank Luntz, the right-wing Orwellian word-maestro who provided Newt Gingrinch the word-lies to use against Democrats in the 1990s such as "pathetic," "weak," "unpatriotic," "death tax," "government bureaucrat," and so forth. In this incarnation Luntz found, for example, that health care reform was exceedingly popular, and thus the president's bill had to be called "a government takeover" whether it was or not (and, it is not!).

Romney, of course, cites no evidence to support that any disaster for the economy has begun to "unfold." There is none. The economy is better today than it was two years ago when it was passed. The greatest disaster for the economy occurred under George W Bush, years prior to the PPACA. That disaster enriched Romney's friends but "unfolded" on the American middle class, wiping out their savings and wealth.

But, is the PPACA a "budget-busting entitlement," as Romney asserts? Not according to the Congressional Budget Office that scored it. In its first decade, the Act was projected to save about $143 billion , but it is probably more conservative to call it "break-even." In the following decade it is projected to save 0.5% of GDP or about $1 Trillion. Since, as years pass, the "next 10 years" also analyzes different years (2010-2020 initially, now 2012-2022, and so forth), and the law is slowly implemented, expenses increase but so do revenues. Overall, the law is deficit neutral.

Is the PPACA, nonetheless, a "dramatic intrusion of the federal government into our lives"? For the vast majority of Americans, it is not. They can, if they wish, purchase the same health care coverage, from the same insurer, and go to the same doctors, as they were before the Act. The rate of growth of premiums will be slowed because these folks will no longer be paying for the uninsured (~$116 billion per year in higher premiums for that).

But, for a substantial minority, the Act provides subsidies so that they can purchase coverage they could never afford before, from health exchanges organized by the states that need to meet certain criteria so that enrollees qualify for their subsidies. One doubts whether the people so helped will consider this a "dramatic intrusion" into their lives any more than Paul Ryan considered his use of social security benefits from his father's untimely death to help him afford college, or other students who receive Pell Grants (named after the late Democratic Senator, Claiborne Pell) "dramatic intrusions" into their lives, except in the very positive meaning of that term.

Although the Act does reform the health insurance business, Romney basically endorses reform, at least for pre-existing illnesses, so this category cannot be what he means by a "dramatic intrusion" into our lives. (Note: Romney even fudges the pre-existing illness problem by applying the reform only to those who have been "continuously insured." To all those knocked off insurance because of the Bush Recession or because Romney fired you while enriching himself at Bain Capital -- sorry).

Romney also makes the extraordinary claim that in his state, "we instituted a plan that got our citizens covered without increasing taxes, and without a government takeover." Really? Does that not prove the point that the PPACA is not a government takeover? If the Massachusetts plan was not a government takeover, and it is almost identical to the PPACA, then how does the latter become a "dramatic intrusion"? Not that logic, truth or consistency are major characteristics of Mitt Romney, but has he not caught himself here in another total contradiction within the same article!

And, what about Romney's prescription for health care reform to replace the PPACA? Well, he favors giving the states "the resources and responsibility" to craft their own health care systems. That is exactly what the PPACA does, but it sets guidelines. So, one gathers that the difference is that Romney would set no federal guidelines, but he would provide the resources. One can only wonder how that saves the federal government any money, and where in Romney's multi-trillion budget cutting scheme he finds that money. Indeed, without some cost-containment measures, it could be very much more expensive to the federal government.

Ah, he says, I neglect the competition that will arise from opening other states' insurance plans to each state. Is that not the federal government being VERY intrusive, basically abrogating state laws that exist to protect (in the way each state wishes) its consumers from inadequate coverage or fraud? Moreover, if my state has higher medical costs and I purchase coverage from a low-cost state, then at what rate does the out-of-state insurance policy cover me? And, if those policies will pay at the same rate as in my state, then will they not charge me more? Or, will Romney turn health insurance companies into socialists?

In any case Romney claims that this competition (for what exactly is not clear) will lower rates so that everyone can afford them. He provides no evidence whatsoever that this will happen. In the 100 years prior to the PPACA being passed, the free market failed to provide affordable coverage for everyone.

Moreover, the PPACA contains, as Senator Kent Conrad (D-ND) put it, every cost saving measure the Congressional Budget Office told them about. Romney's does not. There is no provision in Romney's scheme for prevention -- the most cost-effective means to improve health and lower costs that exists.

Romney would provide a tax benefit to individuals, not just companies, who purchase health insurance apart from their employer. He has no suggestion about where in the budget that lost money will come from -- remember, he is going to cut, cap and balance the budget. But, let us count that as the single positive feature with respect to making health care potentially more affordable in his entire plan. The PPACA was passed ONLY when CBO scored it as not impacting the deficit. One cannot pencil out how Romney's meets that criterion.

Romney cites the 10th Amendment as the basis of his plan. His invocation of the 10th Amendment immediately after mentioning the poor and chronically ill was instructive -- are you sick and cannot afford health care? Well, just read the 10th Amendment, that will improve your health.

But, Romney appears to be quite willing to violate the 10th Amendment not only by superseding states' laws about insurance requirements (so consumers can purchase plans out-of-state), but also by federal government capping non-economic damages in medical malpractice. Whatever one believes about those damages (often referred to as "pain and suffering," and there is little evidence they have much of an impact on costs), Romney cannot claim that such a federal law would not be the "dramatic intrusion of the federal government into our lives" that he decried about the PPACA.

What about Romney's snide comment that his Massachusetts reform did not take any money out of Medicare. Of course it did not. Medicare is a federal government program (that Romney also wants to gut), and thus not available to a state to cut.

And, neither did the PPACA. By getting hospitals and others to reduce their reimbursements by $500 billion over the next decade -- they were willing to do this because they expected to make it up in increased payment collections from the now-insured population -- that money was not transferred from Medicare but saved by it. Indeed, the CBO initially scored the PPACA of extending the solvency of Medicare by 12 years. That has been reduced by two years due to the passage of time, and by another two years due to reduced tax revenues caused by unemployment.

Romney says nothing about how many people will be insured, how much of the $116 billion in cost-shifting will still be occurring, so that those of us fortunate enough to have insurance will be paying for it in increased premiums, estimated at $1000/yr per insured today.

Romney basically claims that his proposal, providing an unpaid for tax credit to individuals, capping pain-and-suffering damages in malpractice suits, and eviscerating state laws that set health insurance standards so that patients can purchase plans from other states will magically transform the system and cover most of the uninsured, as if those were the matters that impeded a century of laissez-faire health care coverage.

And, by the way, it won't cost anybody anything. But, you knew that of course. Nothing they do ever costs anybody anything.

To be fair, Romney did not say that his plan was designed for the United States where he lives, or for the Cayman Islands where his money lives.

 

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