Obamaneycare: Trotskyite takeover or big company bail out?

Analysis

It's almost too perfect.

Of all the GOP candidates President Barack Obama could possibly face in the 2012 election, he's been matched against Mitt Romney.

As presidential opponents tend to be, Romney and Obama are on opposite sides of nearly every policy issue – not least, if only ostensibly, healthcare.

Except for one uncomfortable fact. Obamacare – the "Crown Jewel of Socialism" (in Michele Bachmann's famous turn of phrase), which has been decried by many on the right as nothing short of socioeconomic Armageddon – is based almost exactly on the healthcare law Romney spearheaded as governor of Massachusetts in 2006.

It's an ironic and vexing state of affairs. A fact that Romney has tried to deflect, deny and otherwise shy away from thus far on the campaign trail.

For that precise reason, of course, it's a fact Obama has been all to happy to highlight – never missing a chance to tweak Romney with reminders of his former self. In April, for instance, on the sixth anniversary of the Bay State's healthcare reform law, the Obama camp released an ad spotlighting the many things the two laws have in common.

So how similar are Obamacare and Romneycare?

Short answer: Very.

Same, only slightly different
The two laws share the same philosophy of near-universal coverage and the same basic "three-legged stool" structure: 1) disallowing discrimination by payers; 2) mandating that people purchase coverage; and 3) subsidizing that coverage for those who can't afford it.

And not only that. Both laws were designed and drawn up by some of the same economists and health policy experts, such as Jonathan Gruber, a professor of economics at MIT (pictured at top left).

"Basically, they're the same [bleeping] bill," Gruber told the New York Daily News.

In an interview with Healthcare IT News this week, Gruber used no such salty language, alas, but his message was the same.

"Obamacare is based on Romneycare," he says. "Myself and a number of Massachusetts experts were brought down to Washington to help them develop it, based on what we'd done in Massachusetts."

[Q&A: A county-level candidate discusses talking healthcare on the campaign trail.]

One big difference?

"Obamacare is more ambitious in one important way: Romneycare did not try at all to tackle healthcare cost control, whereas Obamacare does," Gruber says. "So you can think of it as a more ambitious version of Romneycare.”

Sure, there are many other variations, as one would expect, between a law crafted for a commonwealth of 6.5 million people and another designed for a nation of 312 million.

And they aren't always different in the ways one might expect. When it comes to the much-maligned "individual mandate," for instance, while Romneycare penalizes Massachusetts residents who don't buy insurance a not insubstantial $1,200, the penalty under the Affordable Care Act is $695, or 2.5 percent of income.

Both laws require citizens to buy insurance, and both require employers to provide it. In Massachusetts the penalty for businesses with 11 employees or more who don't make a "fair and reasonable contribution" to their health coverage is about $300 per worker. With Obamacare, the businesses required to comply get bigger (only those with 50 or more people on their payroll), but so do the fines: $2,000 penalty per employee.

"In the Massachusetts law we have a very small penalty for employers who don't offer health insurance," Gruber explained. "With the federal law, it's much larger. I would say that's a very big difference."

Other small differences are more or less cosmetic. While both plans allow kids to stay on their parents' insurance until age 26, for example, Romney's law specifies that they maintain coverage for two years after they stop being claimed as dependents or until they turn 26, whichever happens first.

[Feature: Washington gubernatorial candidates at center of national health debate.]

But one more big place the laws are at odds has to do with the subsidies they offer to help people purchase insurance. The Bay State subsidizes folks who earn up to 300 percent of the poverty level; the ACA helps out anyone under 400 percent of the poverty level – but gives them less of a subsidy.

"In Massachusetts, our subsidies to low-income families are much more generous than those in the federal law," Gruber adds. "The federal law makes low-income families pay a lot more of their healthcare costs than does the Massachusetts plan."

Previous
1