Yesterday, the Republicans on the Energy and Commerce Committee issued a press release (and this analysis) in which they claimed to have discovered “a $5 billion bailout fund for state governments, Fortune 500 companies, and Hollywood unions”:

So what is this mysterious $5 billion bailout? Known as the Early Retiree Reinsurance Program, it provides federal dollars to employers and unions that provide health coverage to early retirees. Like many provisions and accounting gimmicks in the health care law, it has largely escaped public scrutiny because of the sheer volume of programs and spending crammed into the law without scrutiny or Congressional oversight.

“Escaped public scrutiny” is an exaggeration to say the least. The program was so secretive that it was extensively covered by the press and regularly touted by Democrats as an example of how the Affordable Care Act would help businesses struggling with growing health care spending and prevent companies from dropping early retiree coverage (seniors 55-64 years old who are not yet eligible for Medicare) before the exchanges begin in 2014. Consider:

- NYT headline: Bristling at Health Plan to Cover Early Retirees [9/9/2009]

- NYT: “Reinsurance program for early retirees Both the House and Senate bills would provide federal financing for a new reinsurance program to encourage employers to maintain health benefits for employees and early retirees age 55 to 64.” [12/28/2009]

- The Hill headline: “HHS begins accepting applications for early retiree reinsurance program” [6/29/2010]

- Rep. Carolyn Maloney (D-NY)’s fact sheet: “The Early Retiree Reinsurance Program provides much-needed financial relief for employers, unions and state and local governments so retirees can get quality, affordable insurance. [2010]

Many different businesses and state governments have benefited from the provision, including the Koch brothers, who applied for federal funding despite spending millions of dollars trying to repeal reform. The provision also resembles one passed by Republicans in 2003, which gave subsidies to employers who offered drug coverage to their retirees before the Medicare Part D program went into effect in 2006. As the New York Times explained, the goal then was the same as it is with the early retiree grants today, “to discourage those employers from terminating those programs, which would have saddled the government and seniors with higher costs.”

Some states have adopted similar programs. In 2010, for instance, Minnesota Gov. Tim Pawlenty (R-MN) extended early retirement benefits to state workers.

Greg Sargent is giving Mitt Romney the benefit of the doubt on his support for state-based health care reform, pointing to this quote from a 2007 speech that seems to suggest that Romney has always argued for a state-by-state solution:

A one-size-fits-all national healthcare system is bound to fail. It ignores the very dramatic differences between states and it relies on a Washington bureaucracy to manage. You think about this, I do not want the guys that ran the Katrina clean up running our healthcare system. So in my view, healthcare reform has to take a federalist approach … We let states decide how they craft their own program. States are able to craft programs to match their unique needs and of course we let states remain as the laboratories of innovation. And by the way, I like the plan we came up with in Massachusetts. I wouldn’t be surprised if other states say, `I like that way, I’m going to copy it.’ And I’d be proud if they did. Some states will find they’ve got better answers than what we came up with, and if they do, hats off to them.

Putting aside Romney’s 2009 comments that Massachusetts reform should serve as a “model” for extending coverage to the nation (which Greg reported on yesterday and I’ve written about here, here, and here), I think the more troubling aspect of this quote isn’t Romney’s position, but the false implication that the Affordable Care Act is a “one-size-fits all national health care system” that does not recognize “very dramatic differences” between the states. In other words, even if Romney has been consistent in his stance, his characterization of the law is self-serving and dead wrong.

In reality, while the ACA lays out a certain framework stats have to follow — there is no question about that — it still provides governors with a great deal of flexibility in how they implement reform, allowing each state an opportunity to develop a somewhat unique solution. Even the waivers HHS is granting to some states (but mostly businesses) is an acknowledgment of the fact that states have what Romney describes as “unique needs.” As Tim Jost recently observed on the Health Affairs blog:

The states, for example, have the option of either implementing the health insurance exchanges themselves or allowing the federal government to do so. States may establish their own risk adjustment programs, preexisting condition high risk pools, and excessive premium increase review programs or leave these tasks to the federal government.

The states also have the option of either enforcing the ACA’s basic insurance regulatory reforms (the ban on rescissions, the requirement of coverage for adult children and of preventive services without cost-sharing, and others), or letting the federal government do it. If a state chooses to implement the law itself, moreover, it generally has a great deal of flexibility in the approach it takes to implementation, as we are witnessing currently in the widely varying approaches the states are taking to establishing their exchanges. [...]

The greatest flexibility, however, is provided by section 1332. This provision authorizes the Departments of Health and Human Services and Treasury to waive key provisions of the ACA and to provide block grants in the amount that the federal government would otherwise have spent in a state on ACA tax credits to states that develop their own innovative proposals for reforming health care. Regulations to implement this provision were proposed on March 10, 2011.

So the more honest position would be to drop the pretense of ACA rigidity and propose different ways to allow states even greater flexibility, if that’s what Romney believes would solve the health care crisis. But those kinds of solutions would require actual policy proposals that don’t lend themselves to the candidate’s one-liner zingers and soundbites.

In his editorial yesterday claiming that the his daughter Carey would have been unable to receive a life-saving heart operation under the Affordable Care Act, Sen. Ron Johnson (R-WI) argued that the new law stifles medical innovation and would jeopardize new medical breakthroughs :

I can’t help but reflect on a medical miracle made possible by the American health-care system. The procedure that saved her, and has given her a chance at a full life, was available because America has a free-market system that has advanced medicine at a phenomenal pace. [...]

The plain truth is that the American system is better at rewarding innovation and responding to consumer needs. But the history of government-led care is there for all to see. Are we doomed to repeat it?

America has certainly had its share of medical breakthroughs, but the procedure Johnson’s daughter received may not have been developed in the United States but rather in Brazil or France — nations that now benefit from some form of universal coverage.

According to CAP Senior Fellow (and resident biochemist) Dr. Lesley Russell, it is most likely that the surgery Carey had was first performed and reported in Brazil in 1975, where doctors described their version of the procedure as “the first successful report of total correction of transposition of the great vessels at the arterial level.” Alternatively, Johnson’s daughter may have had what’s known as The LeCompte procedure, which was developed in France in 1981.

Unfortunately for Johnson, both country’s systems seem far more government-centered than the Affordable Care Act. While Brazil’s system has evolved over time, France — which is often thought to have the best system in the world — has compulsory health insurance. Care is distributed through large occupation-based funds—alliances of professional groups—that are overseen by the government (it sets reimbursement fees with physicians and establishes premiums) and financed through taxes and general government revenues.