Romney’s health care plan — or lack thereof
On Tuesday, Mitt Romney gave a speech in Orlando outlining his plan to “repeal and replace” the Affordable Care Act. Normally, the rest of this post would go into mind-numbingly granular detail on Romney’s plan. But as of now, there aren’t enough details to go into.
The most comprehensive document the campaign has produced is this May fact sheet. But it read more like notes toward a plan than an actual plan. The part explaining what Romney would do spans 330 words.
Those words are enough to lay out a basic vision. Romney would turn Medicaid over to the states and — though this appears in a separate policy paper — cap its growth at inflation plus 1 percent, which would mean deep cuts to the program. He would allow private insurance to be sold across state lines, meaning that if health-care insurers find the rules in California too onerous, they can locate in South Dakota instead. This is basically how credit cards work today. He would cap non-economic damages in medical malpractice lawsuits and encourage “Consumer Reports-type” ratings of health plans. The broad idea, his campaign says, is to make the market for health insurance look more like the market for things that aren’t health insurance.
But the key to his plan comes in these nine words: “End tax discrimination against the individual purchase of insurance.” The problem is, there aren’t any words after that. The health-care system today is basically built atop the tax deduction for employer-based health care. That’s why most Americans under 65 who have health care have it through their employer. But how you end that deduction matters quite a lot.
In April 2008, John McCain laid out his plan for reforming the tax code’s treatment of health care. It was, in principle, similar to Romney’s plan. But it was specific. McCain proposed to end the deduction for employer health insurance and replace it with a $2,500 tax credit for individuals and a $5,000 tax credit for families. He got flayed for it. The Obama campaign attacked it as a tax increase. Independent experts noted that the plan would, in effect, make health care much more expensive for employers, which would make them likely to drop health-care coverage for their employees.
Romney isn’t making the same mistake. His campaign remains silent on how they would flatten the tax code’s treatment of health care. That protects them from the attacks that were leveled against McCain. It means Romney could, for instance, make health insurance fully deductible for all Americans, regardless of employment status. But if he says that, then he has to say how he’ll pay for it. So ambiguity it is.
Indeed, their approach to health reform is similar to their approach to tax reform and spending cuts. They’ve laid out a basic set of principles. But they haven’t laid out the specifics that would tell us how their policies would effect most Americans. In tax reform, they haven’t said which deductions and loopholes they would close to pay for their tax cuts. On the spending side, they’ve said they want to cut federal spending by $500 billion in 2016, but they haven’t said where the cuts will come from.
These plans follow a pattern: Just enough detail to convey Romney’s basic directional preference, but not enough to actually say what he intends to do, or what it will mean. Or, perhaps more cynically, just enough detail to say there’s a plan, but not enough detail so that the plan can be attacked. But that means not enough detail for the plan to be understood.
But there is enough detail to see a very sharp distinction between the two campaigns on health care. The Affordable Care Act is expected to insure about 30 million Americans. Romney’s plan to repeal the Affordable Care Act means those folks won’t get health insurance, and his proposal to cut Medicaid spending means that Medicaid is likely to cut beneficiaries from its rolls.
Until we have more details on Romney’s tax ideas, it’s impossible to say exactly what effect they would have on coverage. But for now, it looks like health-care coverage would go way up under Obama, and dip down under Romney. Whether Romney’s plans will save or cost the government money depends on whether Romney intends to keep or repeal the Affordable Care Act’s spending cuts and tax increases. Whether it will save or cost most Americans money depends on details we just don’t have yet.