The bottom line is that it reads exactly like his health care plan from the 2008 campaign, which looks very similar to the GOP House alternative offered in the midst of the 2009 health care reform legislative battle and Sen. John McCain (R-AZ) 2008 campaign plan. In other words — a rehash of traditional GOP prescriptions that deregulate the insurance market without providing adequate coverage to the sickest Americans or significantly reducing health care costs. Here are five things you should know about Romney’s plan:
1. Romney says he would empower states with greater flexibility by block-granting the Medicaid program, the federal/state initiative that provides coverage to senior citizens and poor Americans. But as a recent Kaiser Family Foundation report has pointed out, converting the existing matching rate formula into a block grant would give states less money that they would have otherwise received and force local governments to cut eligibility to the program. Kaiser examined different scenarios for state responses to reduced federal Medicaid spending and estimated 31 to 44 million Americans could lose their health insurance coverage.
2. Romney would “reform the tax code to promote the individual ownership of health insurance” and “give individuals a choice between the current system and a tax deduction to buy insurance on their own.” He thinks this would create “the best of both worlds” by allowing certain individuals to leave their employer-sponsored health insurance plans and find coverage on the individual market. But this would only entice young healthy workers to buy cheaper but less substantive insurance in the individual insurance plan market place, increasing costs for sicker workers and forcing some to opt out entirely. Among those who would lose their health care are 56 million Americans with pre-existing chronic health conditions. The credits would also fail to cover the cost of comprehensive coverage.
3. Romney says that “individuals who are continuously covered for a specified period of time may not be denied access to insurance because of pre-existing conditions” — a good idea that’s made even better by the Affordable Care Act that he wants to repeal. He’s also advocating for allowing individuals “to purchase insurance across state lines, free from costly state benefit requirements.” This means that insurers would be able to circumvent consumer protections in certain states and sell bare-bone subprime policies to the healthiest (and most profitable) beneficiaries. Companies would have little incentive to do business in states that require coverage for such things as cancer screenings or have guaranteed issue protections and sell plans across the country that deny coverage altogether to high-cost cases. The Affordable Care Act includes a similar — but far better regulated — provision that allows states to form compacts in which they can establish their own regulations.
4. Romney wants to “reform medical liability” and have the federal government “provide innovation grants to states for reforms, such as alternative dispute resolution or health care courts.” The current health care law already includes similar demonstration projects, even if the Congressional Budget Office has concluded that malpractice reforms could at most save $54 billion over 10 years or only about 3 percent of annual costs.
5. Finally, Romney proposes establishing Health Savings Accounts and eliminating “the minimum deductible requirement for HSAs.” This may help some healthy people but will do little to aid Americans with expensive chronic conditions who will quickly deplete their savings accounts.