The Massachusetts Experiment

The bill mandating universal health insurance in Massachusetts is a fascinating one, and Mitt Romney's support a politically admirable maneuver. There are a few things to say in its favor. First off, it empowers individuals to take control of their own health insurance, rather than putting all the emphasis on employers. One reason we have a healthcare cost crisis is that the genius of American consumers is kept at arm's length in the healthcare universe. If you establish a base minimum of insurance, subsidize individuals who need financial help, and mandate a universal requirement, you then force everyone to pick and choose from a variety of insurance plans in an insurance "exchange". Inevitably, in such an exchange, you're going to have intermediaries trying to sell various policies, market them, and provide clear consumer advice about what's in them. You get a real market, in other words, where consumers can see trade-offs and make sane decisions. (The current exchange in Massachusetts is currently restricted for smaller businesses, but the principle holds for a more general application.) Make co-payments a percentage of the actual price of drugs, rather than being a standard lump sum, and you could ratchet up the market impact still further.

Eventually, you could begin to get outside groups sponsoring various policies as well. What if NOW decided to endorse a specific healthcare insurance plan that ensures that women will not have their reproductive rights infringed? Or what if the Catholic church decides to back another plan more in line with its own moral priorities? Or the AARP? You begin to see how choice can come alive in the healthcare market. You also get rid of the economic inefficiencies of tying individuals to certain jobs for health insurance rather than other reasons. And by bringing more people into the general pool, you can reduce premiums in the medium and long term. What's not to like? There are several grand compromises like this one out there on various subjects. This one gives the left universality and the right market mechanisms. Romney deserves praise for pioneering it. And the founders once again deserve our gratitude for constructing a federalist system in which useful experiments like this can occur. And we can learn from them. More, please.