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How "RomneyCare" Will Screw You

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At his speech to a business group in Nashua, NH, on Monday, Mitt Romney said, "I like being able to fire people who provide services to me."

It was a Gotcha! moment for the press and his Republican opponents, which we will no doubt continue to see and hear for some time to come.

Romney protested that the comment had been yanked from the context of a longer statement he made in response to a question about health insurance. And he does have a point. But a close look at his statement in context reveals Romney's ignorance of how health insurance impacts individuals. More to the point, it exposes the dangers that RomneyCare would pose to anyone who relies on health insurance to help pay for medical expenses. Here is what he said:

If you're working at a corporation, most likely the company is buying the insurance for you.... But if you want to buy insurance on your own, if you don't want to buy it from the company, or you're in a small business with one employee -- yourself -- it's not tax deductible. Now, you have to pay in after-tax dollars...

I want people to be able to own their own insurance, if they wish to, and to buy it for themselves and, perhaps, keep it the rest of their life and choose among different policies offered from companies across the nation.

I want individuals to have their own insurance. That means the insurance company will have an incentive to keep you healthy. It also means that if you don't like what they do, you can fire them. I like being able to fire people who provide services to me. You know, if someone doesn't give me the good service I need, I want to say that I'm going to go get somebody else to provide that service to me.

Romney's complete response can be viewed here.

Romney's approach may sound appealing, but the proverbial devil is in the details:

1. Romney asserted that health insurance payments by self-employed individuals are "not tax deductible."

If Romney had even the slightest understanding of what it actually means to be "a small business with one employee," he would know that 100-percent of those payments are tax deductible from gross income. (For the year 2010, the amount goes on Line 29, Self-employed health insurance deduction, of Form 1040, U.S. Individual Income Tax Return.)

He also failed to acknowledge that the Affordable Care Act, which President Obama signed into law in March 2010, began providing small businesses with tax credits up to 35 percent if they provide health insurance to their employees. Those credits are in addition to the tax deductibility that small businesses already receive for employee insurance costs.

2. Romney claimed that he wants "people to be able to own their own insurance ... and choose among different policies offered from companies across the nation."

That may sound good, but in reality, it mirrors the deceptive health insurance scheme proposed by Rep. Paul Ryan (R-Wisc). The hidden hook in the bait is that final phrase in Romney's sentence: "different policies offered from companies across the nation." Freed from the regulations of the Affordable Care Act, health insurance firms would do what they have always done -- peddle their policies from states such as Louisiana, which is notorious for its "laissez-faire approach to insurance regulation... The Insurance Rating Commission was abolished last year [2007], and companies are free to raise their rates on a regular basis."

So, under RomneyCare, you might be able to buy and keep your own policy, but the insurers could jack up your rates at will. Under the Affordable Care Act, health insurers must now justify any rate increase greater than 10 percent.

3. Romney says he wants to give policy-holders the power to "fire" their insurance provider.

In practice, individuals have long (and rightfully) feared just the opposite - getting fired by their insurance company when they become ill. Under the Affordable Care Act, individuals now have various rights and protections against such practices. It is precisely because their power to dump policy-holders has been constrained that insurers now have "an incentive to keep you healthy."

On his campaign web site, Romney declares:

Our next president must repeal Obamacare and replace it with market-based reforms that empower states and individuals and reduce health care costs. States and private markets, not the federal government, hold the key to improving our health care system.

In short, Romney is committed to destroying the protections provided by the Affordable Care Act and putting us once again at the mercy of the for-profit health insurance industry.