Romney’s ‘pulling up the ladder behind him’

October 5, 2012

“Number 1,” Mitt Romney said during Wednesday’s debate, “preexisting conditions are covered under my plan.”


You can see the Massachusetts health-care law on Romney's left, directly in front of the picture of Ann Romney.

Actually, they’re not. Romney’s campaign admitted as much later in the night. If you’ve been uninsured at any point in the past couple of years, you’re not protected under Romney’s plan. The Commonwealth Fund says that means 89 million Americans will be left out in the cold. As Paul Krugman notes, that's a third of the non-elderly population.

But there’s something else Romney said about health care at the debate that matters much more, but is getting much less attention.

The best course for health care is to do what we did in my state: craft a plan at the state level that fits the needs of the state. And then let's focus on getting the costs down for people, rather than raising it with the $2,500 additional premium.

A fair read of that statement would make you think Romney wants to make it possible for every state to follow Massachusetts’s example. But a fair read of his policies makes it clear that Romney wants to make it impossible for any state to follow Massachusetts’s example — and perhaps impossible for Massachusetts to keep the very plan Romney passed going.

The key question for any health-care plan is how are you going to pay for it? The Massachusetts plan used three funding sources.

The first — and, in some ways, the most important — was a $385 million annual payment then-Sen. Ted Kennedy had negotiated for the state’s safety net hospitals. President George W. Bush wanted to end the payment. That set off a panic in Massachusetts, and led to Romney and Kennedy going to the Bush administration and making a deal: Massachusetts could keep the money if they put it towards a universal health-care plan. Oh, and they needed to come up with that plan soon.

This was the threat that forced Romney and the state’s Democrats to pass a plan, as not passing a plan would mean losing billions in free federal money.

The state also found two other funding sources. They covered absolutely everyone they could cover in their Medicaid program so they could get the most generous possible match from the federal government. Right now, Medicaid is helping Massachusetts cover kids and adults up to 300 percent of the poverty line — an incredible deal.

Finally, Massachusetts had imposed a tax to reimburse hospitals for the care they provided to the uninsured. Romney took the money from that tax and put it toward the law.

That’s two pots of federal money and a tax. So how much of Romney’s proposal relied on these funds? “100 percent,” says Jonathan Gruber, an MIT economist who helped Romney design the law. “That was my whole job. Saying whether we could fit what he wanted to do within those three funding sources.”

The legislature ended up adding a bit of general revenue to the law. But the fact remains: The Massachusetts law relies on federal dollars and state taxes.

But Romney’s health-care proposal doesn’t make it easier for other states to follow the Massachusetts example. It makes it almost impossible. He’s not offering states access to federal funds for universal coverage. Here's what he's doing:

I would like to take the Medicaid dollars that go to states and say to a state, you're going to get what you got last year, plus inflation, plus 1 percent, and then you're going to manage your care for your poor in the way you think best. 

That sounds nice, but it's a cut to Medicaid of more than $600 billion. And that's before we even get into Romney's repeal of the Affordable Care Act, which pushes the Medicaid cuts well above $1 trillion. That means Medicaid won’t be able to offer such generous matches in the future. 

“He’s pulling up the ladder behind him,” Gruber says. “There’s a legitimate issue of can Massachusetts even do it anymore? If they block grant us and don’t let the block grants grow, federal funds will become a smaller and smaller share. And we never would’ve done this at 100 percent state funding.”

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Sarah Kliff · October 5, 2012