Newt Gingrich voiced enthusiasm for Mitt Romney’s Massachusetts health-care plan as recently as five years ago, the same plan he has been denouncing over the last few months as he campaigned for the Republican presidential nomination.
“The health bill that Governor Romney signed into law this month has tremendous potential to effect major changes in the American health system,” said an April 2006 newsletter published by Mr. Gingrich’s former consulting company, the Center for Health Transformation.
The two-page “Newt Notes” analysis, found online by The Wall Street Journal even though it no longer appears on the center’s website, continued:
Center for Health Transformation
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.