Mitt Romney’s health-care plan is designed to reform the public sectors of the economy for seniors and the poor while trying to foster competitive insurance markets for the non-senior, non-poor segment of the population.
Even the Romney team would concede that it lacks some key details. (Would block granting have some minimal requirements for states? What is the exact mechanism for equalizing tax treatment for employer-provided and individually purchased plans? At what income level does the support part of the “premium support” Medicare plan begin to phase out?)
That said, the president has offered even less when it comes to Medicaid and Medicare reform, and his “historic” legislation may be struck down, sending him back to the drawing board for health-care reform.
We do know some particulars of Romney’s plan. Based on his public statements and Right Turn’s conversation with a Romney adviser authorized to speak only on background, we found out the following:
1. Romney would not impose his Massachusetts plan on the entire country. His goal is to increase access to health care for those who want it. To that end, he’s going to give states plenty of room in devising their own plans, including Medicaid, which will be block-granted and increased each year by the Consumer Price Index plus 1 percent.
2. It is going to be hard to cost out Romney’s health-care plan. We don’t know the extent or the design of the tax subsidy for those who purchase individual plans. It’s hard to calculate (the Congressional Budget Office couldn’t do it) the savings from a competitive bidding process by insurers in his Medicare reform plan.
3. There are no tax increases in the plan.
4. The preexisting coverage plan would prevent re-rating of patients or exclusion of coverage if they go from an individually purchased plan to an employer plan or the reverse. (ERISA already protects those who move from one group plan to another.) For those first entering the insurance market, states will have the latitude to develop mechanisms such as high-risk pools for those hard-to-insure individuals.
4. Romney’s Medicare reform plan, like the Ryan-Wyden plan, wouldn’t impact those 55 years and older. Medicaid block granting could take place relatively quickly (e.g., the next budget year).
5. Romney does not envision one giant bill to cover non-seniors not covered by Medicaid. Instead, he sees modest step-by-step reforms passed on a bipartisan basis.
6. Romney places a great deal of faith in markets. He believes that if insurers think that feature is something people value and will pay for, they will offer plans that do so. That, for example, may lead insurers without a government fiat to keep the provision for children up to 26 years old to remain on their parents’ plans.
7. Romney believes that differences from state to state aren’t a bug but a feature of the system he’s devised. As an adviser put it: “There are lots of different models. Massachusetts is different from Utah.”