Published June 14, 2012
This week, former Massachusetts governor Mitt Romney began to describe the kind of health care reform plan he would implement if he is elected president. It’s the right vision, and it’s very different from President Obama’s.
The president’s 2010 law is based on a government-centric approach to health care reform. The federal government, already heavily involved in regulating the health sector through Medicare and Medicaid, will have near-total control over all important decisions under the new law, including what’s covered by insurance, where people go to access their coverage, and how doctors and hospitals should organize themselves.
Gov. Romney has a different focus. He wants to build a functioning marketplace in the health sector where consumers call the shots and states have the flexibility to implement approaches that suit the needs of their citizens.
Today, federal policy distorts decision-making. The government confers a large tax benefit on employer-sponsored health insurance but not on insurance bought directly by individuals. This makes it nearly impossible for a vibrant insurance market to emerge for those outside job-based plans, contributing to the uninsured problem.
The tax break grows with the expense of plans offered by employers, undermining the incentive for less expensive coverage. Nearly all economists agree this is a key reason costs are so high. The government also inflates costs through the design of the Medicare program, which encourages high-volume instead of high-value care.
Gov. Romney would begin to level the playing field for insurance purchased directly by individuals. He would also encourage a national marketplace for insurance to foster more intense competition; implement serious medical malpractice reform to help control costs; reform both Medicare and Medicaid so that they reinforce, rather than undermine, market discipline; and work with states to ensure that those with expensive health conditions have secure insurance.
President Obama’s plan is to shift enormous power and control in the health sector to the federal government. That’s a recipe for inefficiency and low-quality care. Gov. Romney wants to harness the power of the marketplace to deliver better care at lower cost to all Americans. That’s the choice in 2012.
James C. Capretta is a fellow at the Ethics and Public Policy Center and a visiting fellow at the American Enterprise Institute.