Tuesday, November 6, 2007

Romney Says There Are Already "Pots of Money" in the States to Pay For Health Care Reform---Where?

Mitt Romney says states could implement comprehensive health care reform without having to raise taxes.

However, states trying to replicate the Massachusetts health plan would likely have to raise taxes in order to pay for it. That is the conclusion of a November 3rd Boston Globe article. Here are some points:
  • Massachusetts had something other states don't have--a $610 million uncompensated care pool that Mass was able to use for covering the uninsured.
  • The uncompensated care pool comes from assessments on hospitals, insurers, and state tax revenue.
  • Mass is using roughly $160 million from the uncompensated care pool, along with other state and federal funds, to fund Massachusetts plan.
But the Romney people say states wouldn't have to raise taxes: "We firmly believe you can do this in a revenue-neutral way,"said a spokesperson. "There are these pots of money around that states do receive or their hospitals receive that you can say, 'Let's use that in the best fashion, let's use that more wisely, let's use that to get people into health insurance plans, so they're not using that in a hospital room."

Just where does Romney think these "pots of money" are in the states? As he should have learned in Massachusetts, that state's program already draws on the federal programs (SCHIP and Medicaid) to help pay for the plan. On top of that comes the $160 million from the "free care pool." With all of that there still isn't enough money--the regulator has had to back-off on the coverage mandate for the near poor because of a funding shortfall.

The Romney campaign's health plan has as its core the notion that there is enough money in the states already that they can craft their own version of health care reform and cover their people.

In California, the governor and legislature, now in a special session, are grappling with a state health reform plan that at last look had the Democrats proposing to pay for it with an employer payroll tax of 2% to 6.5%, taking the per pack cigarette tax from 87 cents to $2.87, and raising billions in new hospital taxes. And, that is after "creatively" using SCHIP and Medicaid money.

Romney says he wants the states to be "laboratories of innovation." But, Romney needs to tell us where these "pots of money" are in the states for health care reform.

Recent post: A Detailed Analysis of the Romney Health Care Reform Plan
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