Would the Government be Shuttered if Obamacare were Romneycare?

By :: October 1st, 2013

Enrollment in the new health care exchanges begins today and the government is partially shut down in protest—never mind that Obamacare funding is largely immune to the shutdown.

The Republicans in the House appear to be getting most of the blame for the shutdown because they insist that continued government funding be tied to at least a temporary delay in the implementation of the President’s healthcare law, a nonstarter in the Democratic controlled Senate and the White House.

I wondered how the debate might be different if 2008 had produced a President Romney rather than Obama. Candidate Romney would have campaigned on the success of the Massachusetts health reform, arguably his greatest accomplishment as governor. The system of subsidies, mandates, and a regulated health insurance marketplace were the model for the Affordable Care Act.

If we had Romneycare, the White House and Republicans would be trumpeting the remarkable success of the free (but regulated) market in providing a wide range of choices of insurance plans in most markets and pushing prices down. That is what choice and competition do! (And, exactly what seems to be happening now under Obamacare.)

Democrats might complain that many of the affordable health insurance plans have high deductibles that could create significant hardships for middle-income families if they get sick. The Republicans would remind us that high deductibles help constrain medical spending by making health insurance consumers cost conscious. (In the alternative reality that is Obamacare, Republicans bemoan the high deductibles and the Democrats mostly remain silent.)

Democrats, chafing under Romneycare would hate the individual mandate and the burden it puts on middle-class workers unlucky enough to work for an employer that doesn’t provide health insurance. Republicans would call it individual responsibility; people should be discouraged from eschewing insurance only to put the burden of paying for their care on others when they get sick. Conservative think tanks would point out that the mandate is the lynchpin of any free market solution.

Republicans might not have included the employer mandate—they are more hesitant to put new burdens on businesses—but Obama suspended the mandate for a year and it’s likely an area where the two parties might find common ground if they were on speaking terms. Unions would howl in protest that, without a mandate, employer-sponsored insurance might go the way of the dodo bird. Republicans would say “good riddance.” Companies should focus on producing better products and services and leave health insurance administration to others.

The surtaxes on those with high incomes probably wouldn’t be in Romneycare. President Bush’s historic expansion of Medicare to cover prescription drugs mostly borrowed to cover the cost.

So a key difference is that Republicans really hate the new taxes. As is often the case, what seems to be a fight about spending is really much about taxes.

But another difference is that absent a landslide victory in Congress, President Romney would have needed a significant number of votes from Democrats to pass health reform since many Republicans don’t believe the federal government should be in the health insurance business. A bipartisan bill would surely have muted Democratic criticism.

The bottom line is that the main problem many Republicans have with the Affordable Care Act is that it is Obamacare rather than Romneycare. (Well, actually, it is Romneycare.) They’re not invested in the law since it passed with only Democratic votes. And they really hate the taxes.

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14Comments

  1. Michael Bindner  ::  9:55 pm on October 1st, 2013:

    Len Burman nails the difference, although some also say that the D beside Obama’s name and the dislike in many Tea Party member districts of his ethnicity (to put it most politely) might also have something to do with it.

    Another interesting thought experiment is to examine McCain Care, which as we all recall was a $5000 refundable tax credit to buy, preferably catastrophic, health insurance with all other coverage being taxable. That plan was so toxic to the GOP they did not even offer it as an alternative (even though it originated with Bob Dole – I even had a similar plan with a health care line of credit to cover the gap between health savings accounts and deductibles – it would still be a nice feature).

    I suspect that in the future we will see a VAT paying for single-payer or a subsidized public option (along with Medicare and Medicaid) – which is basically what Len proposes – although more an exchange than a single-payer system.

  2. AMTbuff  ::  3:04 am on October 2nd, 2013:

    Len, your argument overlooks a crucial historical fact: The Great Recession dramatically curbed the American public’s appetite for expansive and expensive new government programs. I’m not talking about ideologues on both sides who never change their minds, but the less partisan majority of voters. To them, adding a huge new commitment to an already over-committed federal government seemed risky and ill-advised unless and until a full recovery arrived.

    In 2010, even Massachusetts voters would probably have defeated Romneycare had it been initially proposed then. They did elect Republican Scott Brown to the US Senate specifically for the purpose of stopping the massive health insurance bill.

    Timing is everything. You need a better argument than the possibly true but irrelevant “Republicans would have approved this package prior to 2008″.

  3. Jack B  ::  9:17 am on October 2nd, 2013:

    Michael – I can’t say I agree with many of your views but I think that a McCain care or like strategy on health insurance was the way to go instead of this complicated monster PPCA

  4. Michael Bindner  ::  9:37 am on October 2nd, 2013:

    The GOP did not offer it because the public soundly rejected it by not voting for McCain. No one wants to pay taxes on their employer provided insurance benefits. I doubt even the wonks at TPC who propose this would really want to pay the extra tax.

  5. Vivian Darkbloom  ::  9:49 am on October 2nd, 2013:

    Would the government be shut down if ObamaCare were RomneyCare?

    I don’t think so. But, not for the reasons Mr. Burman seems to suggest.

    When Romney was Republican governor of Massachusetts, the legislature was overwhelmingly controlled by Democrats (D’s normally control 85 to 90% of both houses). Romney introduced his own legislation, but that was in response to a bill initiated by the Democrats (the dynamics here remind one a bit of the Medicare D legislation under Bush). Romney had input into the final legislation, to be sure, but that final outcome was quite a bit different from the one he proposed. Imagine that: An executive leader cooperating with a legislature overwhelmingly controlled by the other party to achieve a bipartisan bill! And, it is said that Ted Kennedy helped negotiate the compromise. So, to call this “RomneyCare” is a bit of a misnomer.

    The key here is that Romney involved the opposition in the legislative process. The final product was truly bi-partisan, albeit a genuine compromise. Given that history, I highly suspect that any comprehensive health care legislation coming out during a Romney presidency (if there would have been one attempted at all) would have been bi-partisan as well. Given the major economic and financial crisis facing the United States in 2008 and 2009, I strongly suspect that Romney would have focused on restoring the country to economic health rather than try to create an enormous new federal entitlement program which would exacerbate an already disastrous federal fiscal situation.

    Obama, on the other hand, gave immediate focus and attention to creating a huge new entitlement program rather than the economy. This is the major failure of his presidency. In doing so, he never seriously attempted to involve the opposing party in the drafting of the health bill. Sure, when the bill faltered and appeared to be doomed, he called a public get-together with the Republicans, supposedly to get their input. By all accounts and appearances, however, this was mere show. I can’t recall a single R suggestion that got into the final bill (or was dropped from it. As a result of this, he expended huge amounts of attention, energy and political capital on a flawed health care measure while the economy sputtered and millions lost their jobs. It is largely responsible for the devisiveness and distrust we now see between the two parties. The need to negotiate is especially essential to major programs.

    When political parties agree to negotiate with one another and arrive at truly bi-partisan outcomes, there is no need or incentive to subsequently “shut down government”. There is a lesson, here, I think, for comprehensive tax reform and entitlement reform as well. “I will not negotiate” is not a governing strategy.

  6. Patrick  ::  2:35 pm on October 3rd, 2013:

    El Oh El. Romney was able to pass a bipartisan bill because both sides were interested in a solution and negotiated in good faith. Obama’s inability to pass the ACA without broad Republican approval was due to the GOP’s obstructionist, contrarian, three-year-old-in-a-temper-tantrum tactics.

    If we’re going on this kick of calling out “I will not negotiate” as being a poor governing strategy, how about some accountability for the intransigent House Republicans who refused to negotiate in good faith on health reform?

    There are a LOT of things to dislike about Obama (like his dismal record on the wars and domestic privacy) but his health insurance reform isn’t one of them. The ACA isn’t perfect, even by a LONG stretch of the imagination, but it sure beats the dysfunctional system we had before, in which insurers were lords and consumers were serfs. If you take some time to learn what’s in the ACA and evaluate it as a human being instead of as a stubborn partisan, you’ll probably like it.

  7. Patrick  ::  2:41 pm on October 3rd, 2013:

    “The Great Recession dramatically curbed the American public’s appetite for expansive and expensive new government programs.”

    What? Where on earth did you get that idea? If anything, people are clamoring for any help they can get because so many people are under financial pressure.

    “In 2010, even Massachusetts voters would probably have defeated Romneycare had it been initially proposed then.”

    Again, what?

    “They did elect Republican Scott Brown to the US Senate specifically for the purpose of stopping the massive health insurance bill.”

    And they also elected Elizabeth Warren to advocate on behalf of actual human beings. Wow, ascribing our own political notions to an entire state full of voters is fun!

  8. Len Burman  ::  3:08 pm on October 3rd, 2013:

    Actually, that was one of my favorite parts of McCain’s plan. If you made the credits progressive, as under the ACA, and provided a regulated marketplace (like the exchanges), you’d have a more rational version of the ACA.

    I thought it was shameless that Obama demagogued the issue during the campaign by saying that McCain wanted to tax your health insurance. If the tables had been turned and Obama had proposed a flat refundable $5,000 tax credit, the Republicans would have cited it as an example of class warfare and socialism. It was highly progressive.

    And I don’t need a subsidy to pay for health insurance. I’m happy to get it, but I’d get insurance no matter what because I don’t want to be impoverished by a major illness and I can afford it.

  9. Vivian Darkbloom  ::  3:26 pm on October 3rd, 2013:

    This has nothing to do with liking the ACA or not. That’s the thing about negotiation and compromise. Eventually, in return for getting something you want, you need to put up with a few things you don’t like. Whether you like (or dislike) the ACA is not relevant to the point I made. The point is that it was not a bipartisan bill. If you want to make an enormously fundamental change such as the ACA, it should be done with more than the narrowest of legislative majorities and a completely partisan one at that, not to mention a quite likely minority approval among the general populace (polls have consistently shown the latter).

    Based on what has been written here, I don’t know how you are so certain that I’ve not taken the time to learn what’s in the ACA. Is it merely because you suspect I may not agree with you?

  10. Patrick  ::  3:45 pm on October 3rd, 2013:

    I’ll say it again: Negotiation is great when both sides want a solution. It doesn’t work so well when one side is bent on obstruction and even destruction.

    If the GOP can’t get on board with Americans having health insurance under a plan originally devised by their political brethren, then they don’t belong in the negotiating room. Obama, to his credit, understood that in 2010, and he understands it now. I’ve seen too many instances of influential Republicans taking LOTS of cash from people with vested interests in sabotaging the reforms to believe they’re just opposing the ACA out of their pure-as-undriven-snow idealism.

    Do I like that Obamacare isn’t a “bipartisan” solution? Of course not. The current political atmosphere of division and strife is awful for our country, but my desire to see a more fair relationship between insurers and consumers takes precedence over my preference for a happy compromise.

    Regarding whether you’re informed on what the ACA does, I admit that was an assumption, but I only made that assumption because your previous post fit the profile of someone who crows about hating Obamacare without knowing what’s in it. I’m not affiliated with any political party or movement, so I consider myself a pretty objective observer on controversial public policy like this, and I honestly believe the ACA is mostly a step forward. It contains a lot of protections for consumers, who historically have been at the mercy of well-funded and politically-connected insurers. It’s about damn time.

  11. Josh Archambault  ::  7:48 pm on October 3rd, 2013:

    Len,
    I fear that you misunderstand the Massachusetts reform.

    Even the citizens of the state seem to see a big difference. Bob Blendon at the Harvard School of Public Health found 63% support for the state law, but only 40% support for the ACA. In such a pro-Obama state how could that be?

    Perhaps as John McDonough, a former Senator Kennedy staffer would remind us, all of the Mass “stuff” in the ACA only appears in Title 1 of the law, and there is lots of “extras” in the other 9 Titles (i.e. new taxes and Washington mandates etc).

    Just from a superficial level, there are 67 pages of regulations to implement the Mass law, what are we at in DC? 20,000?

    Call a random small employer in the state, and you will get an earful for how different they feel the laws are.

    Still not convinced, let’s examine the recent political history in the state.

    The ACA changes the regulations (rating factors) for how insurance is offered. The Massachusetts Division of Insurance commissions a report, and finds that 60% of small businesses will see premiums go up.

    The state seeks a waiver citing, “extreme premium increases.”
    The pro-ACA insurers commission a report, and find premiums will go up 97% (plus trend) for some companies.

    The full legislature gets wind of the impact and passes a provision to force the Governor to ask for a formal waiver from the rating factor provisions.

    Think about that for one second– a lopsided very pro-ACA Democratic legislature thought it a big enough issue to force the Democratic Governor (and friend of the President) to ask for a waiver. It should be noted, this is not the first time they have sought relief from the ACA.

    The optics from both a policy and political standpoint are very telling. You are right– what a difference a few months can make!
    The waiver request was denied, and now the pro-ACA business group Associated Industries of Massachusetts (AIM) is considering a lawsuit.

    So, a state reform in a high-income state with 92% insured to begin, with the most doctors per capita in the country and lots of hospitals, that partially deregulated the individual marketplace is the same as the massive law we have before us?

    http://www.hsph.harvard.edu/news/press-releases/massachusetts-health-reform-poll-2011/
    http://www.forbes.com/sites/theapothecary/2013/08/21/rate-shock-massachusetts-edition-60-of-small-biz-to-see-premiums-rise-up-to-97/
    http://www.forbes.com/sites/aroy/2013/01/30/does-mass-predict-employer-behavior-under-obamacare-probably-not-and-5-reasons-why-part-1/
    http://www.forbes.com/sites/aroy/2013/01/31/part-2-does-massachusetts-predict-employer-behavior-under-obamacare-probably-not/

  12. Len Burman  ::  7:59 pm on October 3rd, 2013:

    Josh,

    Thanks for the comment. I certainly did not mean to imply that the ACA was identical to MA’s health reform plan, but many of the elements of ACA that House GOP members complain about are common to both plans–and are rooted in conservative ideas. I have no doubt that ACA could be improved. Perhaps after the current Kabuki dance is over, legislators will focus on that. But so far the opposition seems to be preoccupied with trying to kill ACA rather than fix it.

  13. Dan Miller  ::  12:02 pm on October 7th, 2013:

    Question: what makes you think that the House GOP was willing to negotiate with Obama, at all, on any bill that would significantly expand coverage? Given their actual behavior–and the fact that they hadn’t expressed any interest in universal health coverage during the previous 8 years when they controlled the government–I suspect they would have had no reason to negotiate.

  14. Vivian Darkbloom  ::  12:28 pm on October 7th, 2013:

    Question: what makes you think that the House GOP was willing to negotiate with Obama, at all, on any bill that would significantly expand coverage?

    Answer: Because the Republicans themselves proposed health care reform that would have significantly expanded coverage. Those proposals differed from Obama’s in approach; however, the starting point for any negotiation and compromise is difference. For example, here’s a look at the ‘bipartisan” Ryan-Wyden plan for health insurance and Medicare reform. This proposal, if enacted, would have provided support to lower-income Americans to purchase health insurance and would have significantly expanded coverage.

    http://www.forbes.com/sites/aroy/2011/12/15/ron-wyden-and-paul-ryans-bipartisan-plan-for-health-care-and-medicare-reform/

    Imagine that—a “bipartisan” effort, made in good faith, to reform our health insurance system. Imagine further if that bipartisan plan had been adopted. Would we now be in stalement?