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Newt approved of Romneycare

A memo has come out dated April 2006 that Newt Gingrich wrote for the Center of Health Transformation. In this memo he sang the praises for the Massachusetts health plan from “Newt’s Note:”

The most exciting development of the past few weeks is what has been happening up in Massachusetts. The health bill that Governor Romney signed into law this month has tremendous potential to effect major change in the American health system.

We agree entirely with Governor Romney and Massachusetts legislators that our goal should be 100% insurance coverage for all Americans. Individuals without coverage often do not receive quality medical attention on par with those who do have insurance. We also believe strongly that personal responsibility is vital to creating a 21st Century Intelligent Health System. Individuals who can afford to purchase health insurance and simply choose not to place an unnecessary burden on a system that is on the verge of collapse; these free-riders undermine the entire health system by placing the onus of responsibility on taxpayers.

The Romney plan attempts to bring everyone into the system. The individual mandate requires those who earn enough to afford insurance to purchase coverage, and subsidies will be made available to those individuals who cannot afford insurance on their own. We agree strongly with this principle, but the details are crucial when it comes to the structure of this plan. Under the new bill, Massachusetts residents earning more than 300% of the federal poverty level (approximately $30,000 for an individual) will not be eligible for any subsidies. State House officials had originally promised that there would be new plans available at about $200 a month, but industry experts are now predicting that the cheapest plan will likely cost at least $325 a month. This estimate totals about $4000 per year, or about 1/5 of a $30,000 annual take-home income.

While in theory the plan should be affordable if the whole state contributes to the cost, the reality is that Massachusetts has an exhaustive list of health coverage regulations prohibiting insurers from offering more basic, pared-down policies with higher deductibles. (This is yet another reminder that America must establish a cross-state insurance market that gives individuals the freedom to shop for insurance plans in states other than their own.)

In our estimation, Massachusetts residents earning little more than $30,000 a year are in jeopardy of being priced out of the system. In the event that this occurs, Governor Romney will be in grave danger of repeating the mistakes of his predecessor, Mike Dukakis, whose 1988 health plan was hailed as a save-all but eventually collapsed when poorly devised payment structures created a malaise of unfulfilled promises. We propose that a more realistic approach might be to limit the mandate to those individuals earning upwards of $54,000 per year.

While the Commonwealth’s plan will naturally endure tremendous scrutiny from those who assert that the law will not work as intended, Massachusetts leaders are to be commended for this bipartisan proposal to tackle the enormous challenge of finding real solutions for creating a sustainable health system. I hope that Massachusetts’ initiative to provide affordable, quality health insurance for all continues to ignite even more debate around the subject of how to best address our nation’s uninsured crisis and the critical problems within the health system at large.

Newt has some explaining to do!

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