Tuesday, February 13, 2007

Mitt Romney Looking for Support Among Conservative Republicans--A Health Care Achilles Heel?

Former Massachusetts Governor Mitt Romney is working hard to boost his popularity among conservative Republicans. He seems to be saying all the right things for conservatives. That, plus the longstanding suspicion conservative Republicans have had for both Rudy Giuliani and John McCane have given Romney a shot at the party's powerful conservative wing.

Romney has a certain amount of health care reform credibility in the run up to the 2008 elections because he signed the Massachusetts Universal Health Bill. That legislation was a major bipartisan accomplishment when no one at either the state or federal level has been able to accomplish much toward solving the problem of the uninsured.

But that accomplishment could turn into a real political problem for Romney among those same conservatives if the program isn't able to get past a very serious threat to its success. As we have posted before, the average insurance company bids for the mandated health plan averaged $380 per person per month--or $13,680 per year for a family of three. When the legislation was passed, it was estimated the average per person monthly cost would be $200.

The Mass regulator is now in the midst of trying to solve that problem by looking at more limited plan designs and pressuring insurers to bid more aggressively. But that will be very hard because a comprehensive health plan insurance plan just plain costs that much in Massachusetts.

The regulator can add deductibles and big copays to get the cost down. However, what good does it do to give a poor person a health insurance plan with a $2,000 deductible?

The Mass regulator has a choice--pay the real cost of a health insurance policy or offer some stripped down coverage that does a low income person little good.

The middle class would fare no better. A family of three making more than three times the poverty level ($48,000 per year) would be expected to pay the full cost of a family policy--$13,680 per year at the $380 average premium. Even if the regulator gets the premium down to $300 per person the annual cost for a family of three would be $10,800 per year--23% of a $48,000 before tax income. And, that policy might have a $2,000 front-end deductible.

What kind of reaction do you think conservatives are going to have if they hear Romney is taking credit for a health insurance bill that requires all Mass families to buy a health insurance policy at those prices?

Conservatives seem to be getting more and more interested in a Romney candidacy.

But if the Massachusetts health plan looks like just another fiscally irresponsible foray into health care policy, Mitt Romney's conservative honeymoon many be over.


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