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RomneyCare vs. ObamaCare – which is better?

Posted by John McDonough  August 27, 2012 10:54 PM

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Mitt Romney has ended his self-imposed silence on his signature achievement as Massachusetts Governor -- declaring himself "very proud" of his signing of the Massachusetts Health Reform law (aka: RomneyCare, Chapter 58) in April 2006.

Appearing on Fox News and other outlets, Romney also declared that the Massachusetts Health Reform law is "better" than the Affordable Care Act (aka: ObamaCare).

Reasonable question: which is better? Personally, I am delighted that the two presidential contenders might debate which government-engineered scheme to expand affordable health insurance is better. Let me try and offer my own answer.

There is no simple answer. On some things, RomneyCare wins, on others, it's hands-down ObamaCare. And on some, it's more complicated. Let's look at some details:

Ways that RomneyCare (RC) is better than ObamaCare (OC):

1. RC provides deeper premium support and cost sharing subsidies to make health insurance more affordable to those receiving public subsidies.

2. RC established an insurance exchange (Connector) with a directive to be an advocate to keep consumers' health insurance premiums more affordable.

Ways that ObamaCare is better than RomneyCare:

1. OC premium support and cost sharing subsidies help families with incomes up to 400% of the federal poverty line, vs. 300% FPL under RC.

2. OC bans lifetime and annual benefit caps and RC does not.

3. OC eliminates medical underwriting and pre-existing condition exclusions for all health insurance policies. Massachusetts did this in the 1990s and so there was no need for this to be addressed in RC.

4. OC requires health insurance companies to spend at least 80-85 cents of every premium dollar on medical costs as opposed to profits, marketing and overhead.  RC includes no such provisions.

5. OC allows young adults to stay on their parents' health insurance policies until they reach age 26. RC allows young adults to stay on their parents' plan for up to two years after they are no longer dependent, and no older than age 25.

6. OC requires that all health insurance policies cover preventive care services (ie: contraception) with no co-pays or other cost sharing. RC has no such protections.

7. OC requires that all Members of Congress and their staffs can receive federal health insurance coverage via the new state health insurance exchanges. RC did not make any similar requirement on Massachusetts state legislators.

8. OC improves Medicare for its beneficiaries by: closing the prescription drug "donut hole;" providing an annual wellness checkup with no cost sharing; lowering beneficiary premiums; and extending the life of the Hospital Insurance/Part A Trust Fund by about 8 years. RC does not address or improve Medicare at all.

9. OC instigates a significant effort to lower the health care system's administrative costs. RC has no such provisions at all.

10. OC instigates a series of reforms in the delivery of medical care services, including the establishment of accountable care organizations, medical homes, value-based insurance designs, penalties for excessive rates of hospital acquired infections and readmissions, and more. RC does not address delivery system improvements at all.

11. OC establishes a series of programs and initiatives to improve public health, prevention and wellness, including the creation of the first-ever national prevention strategy. RC provides funding for some existing public health programs, though no new public health or prevention initiatives.

12. OC requires every chain restaurant with at least 20 outlets to post on menus and menu boards the calories of every item on its menu. RC has no such public information requirement.

13. OC includes major new funding for community health centers and the National Health Service Corps to improve the nation's supply of primary care services. RC has no such provisions.

14. OC requires the establishment of a National Health Workforce Commission -- appointed, though blocked from convening by House Republicans. RC does not address health care workforce needs at all.

15. OC establishes major new provisions to combat health care fraud and abuse in Medicare, Medicaid, and private insurance. RC includes no provisions addressing fraud and abuse in any sector.

16. OC establishes new standards and a national framework to combat elder abuse, including violence, neglect, and financial exploitation. RC includes no such provisions.

17. OC requires that drug, medical device, and medical supply companies publicly report all gifts, honoraria, and other gratuities to physicians and other licensed medical professionals. RC includes no such provisions.

18. OC directs the Food & Drug Administration to create a pathway for the approval of so-called "bio-similars" or generic-like versions of biopharmaceutical drugs, provisions strongly supported by the pharmaceutical and biotechnology industries. RC has no such provisions.

19. OC includes provisions to ensure that nursing patients and their families are able to obtain transparent information about the ownership and corporate responsibility of nursing homes. RC includes no such protections.

20. OC establishes a new 10% tax on indoor tanning services, which have been linked to the explosion in serious skin cancers, especially melanomas, among young women ages 15-35. RC does not address this epidemic.

OK -- 20 versus 2. You may have others which will add or subtract from either column. My verdict -- as a BIG fan of MA health reform -- ObamaCare wins easily.

Now, one other BIG difference: financing. Here's Mitt:

"My health care plan I put in place in my state has everyone insured, but we didn't go out and raise taxes on people and have a unelected board tell people what kind of health care they can have," Romney said in an interview with CBS' Denver affiliate, KCNC.

So which plan is better when it comes to financing? Again, fair question.

It's true, there were no tax increases (unless you count individual and employer tax penalties for non-coverage) associated with MA health reform. But there's a big difference -- Massachusetts got the federal government to pick up the lion's share of the cost. MA health reform would have been impossible without the Administration of President George W. Bush playing Sugar Daddy.

I would propose -- the appropriate comparison is how ObamaCare was financed in comparison with the major health achievement of Obama's predecessor, George W. Bush.

In 2003, with Bush's strong support, a Republican-controlled House and Senate approved the Medicare Modernization Act (MMA) that created the Medicare Part D prescription drug benefit, a big advance sought by senior citizen groups for many years. How was that law financed? 25% was financed by Medicare enrollee premiums and 75% was financed by lathering the costs onto the federal deficit. The Congressional Budget Office estimates that between 2010 and 2019, the MMA would increase the federal debt by about one trillion dollars.

In 2010, with Obama's strong support, a Democratic-controlled House and Senate approved the Affordable Care Act (ACA). White House and Congressional leaders decided that the law needed to be entirely self-financed so that it would not increase the federal debt at all. The CBO estimated in 2010 that the ACA would reduce the federal debt by about $140 billion 2010-2019.

Mitt Romney and the Republican Party support the Part D drug program and indicate no desire to eliminate it. They also indicate no desire, retrospectively, to develop a plan to pay for it beyond allowing the Chinese (and other purchasers of U.S. debt) to finance it. Barack Obama and the Democrats support the ACA and made the most difficult decision to pay for it. You can easily disagree with how they chose to pay for it -- and still respect their integrity in taking the political hits to pay for it.

Advantage -- Obama and ObamaCare.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About the author

John E. McDonough is a professor of practice at the Harvard School of Public Health. He is the author of the book “Inside National Health Reform”, published in 2011 by More »


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