Romney’s Health Care Proposal Calls for “Consumer-Market” Reforms and Making States Responsible for the Uninsured

June 15, 2012

Vowing to repeal whatever remains of PPACA after the U.S. Supreme Court’s decision, Mitt Romney put forth a plan to replace the beleaguered health care reform law, comparing the U.S. health care system to an inefficient “big government-managed utility.”  He assured voters that “we can get health care to act more like a consumer market …we’re going to see better prices, lower costs and better care.”  The proposed Romney reforms include: 

  • Allowing insurance to be purchased across state lines, thus seeking to provide more leverage for small businesses and individuals with insurers;
  • Expanding the same tax breaks that currently exist for employer-provided health coverage to individuals who buy health insurance directly;
  • Capping non-economic damages in medical malpractice awards; and
  • Expanding HIPAA protections to prohibit the denial of coverage based on pre-existing conditions for people moving between plans in the individual market.

Critics of the Romney plan note that those people who suffer from a pre-existing condition before they receive insurance would not receive any relief and would likely remain uninsured.  However, Romney counters that “the best way to care for the uninsured” is to “let states care for their own people in the way they think best.”  Thus, to help the states with the problem of the uninsured he proposed:

  • Giving states block grants and significant flexibility in using federal Medicaid funds and federal payments that cover hospitals’ costs for treating people who cannot pay; and
  • Encouraging states to create accessible high-risk insurance pools using risk adjustment and reinsurance to reduce costs. 
Romney’s proposal does not directly address whether he would allow states to regulate ERISA plans.