ICYMI: "Tommy Thompson's Big-Spending Health Care Plan"

Sep 06, 2012

By JACK CRAVER | The Capital Times

Tommy Thompson and Mitt Romney faced similar challenges in their campaigns to win Republican primaries this year. In particular, both had to explain why they had at one point either backed “Obamacare” or a health care program strikingly similar to it.

And now, in tight general election races, the former governors face similar dilemmas in how to address the health care issue.

Do they stick to the conservative talking points, likening the Obama administration’s Affordable Care Act to a socialist revolt against the American system of free enterprise? Or do they moderate their tone, criticizing the health reform law as poorly executed without condemning many of its popular features, such as the requirement that insurance companies offer individuals coverage regardless of pre-existing conditions?

The result is an at-times puzzling compromise.

The central criticism Romney pursues is that the Affordable Care Act is a threat to another, more important federal entitlement program: Medicare. Paul Ryan, who himself has proposed slashing Medicare spending for future generations by voucherizing the program, has adopted the same criticism.

Romney also avoids addressing the obvious similarities between the health care program he established in Massachusetts and the federal program. His website, for instance, makes no mention of “Romneycare,” which was the signature policy of his governorship.

It’s hardly surprising, given the things his running mate has said of the program.

“(Romneycare) is not that dissimilar to Obamacare,” said Ryan in an interview last year with the American Spectator. “And you probably know that I’m not a big fan of Obamacare … I just don’t think the mandates work. I haven’t studied in depth the status of it, but I think it’s beginning to death spiral; they’re beginning to have to look at rationing decisions. I don’t think this kind of a system works.”

However, when prodded on the issue, Romney says he believes it is the states, not the federal government, that should take the lead on such reforms. Therefore, he is not a hypocrite for supporting one and opposing the other.

Tommy Thompson, who now faces Democrat Tammy Baldwin in his race to represent Wisconsin in the U.S. Senate, has no such outs. In fact, he has a long history of stating his support for exactly the type of federal mandate that underpins the Affordable Care Act.

In a 2006 health care roundtable featuring Thompson and former Clinton administration Health Secretary Donna Shalala, Thompson not only lauded the individual mandate in Massachusetts, but said that a national mandate would be better than a state-by-state approach.

“Well, I think (a national mandate) would be better, but the truth of the matter is I don’t think that’s going to happen,” he told the moderator. “The practicality of politics in Washington right now is that nothing like that is going to pass.”

However, by the time Thompson decided to run for Senate, it was no longer possible to get through the GOP primary while supporting Obama’s program, particularly its individual mandate that, starting in 2014, will require individuals to purchase health care coverage, which the conservative base considers an affront to basic principles of individual liberty.

Democrats have thus far delighted in Thompson’s reversals.

“It is clear that Thompson’s flip-flopping is being driven by his allegiance to the big insurance companies he has been working for and that is why Wisconsin voters understand he is not for them anymore,” says Baldwin spokesman John Kraus, referring to Thompson’s lucrative career as a health industry consultant after his stint as Health and Human Services secretary under President George W. Bush.

Thompson has dropped his support for the mandate but continues to support a health care program that includes much of what the Affordable Care Act already offers.

For instance, Thompson advocates shifting from the current “fee-for-service” structure of health care, in which the federal government reimburses Medicaid and Medicare providers for procedures, to one that pays for outcomes. This is a central tenant of the Affordable Care Act, which created the Center for Medicare and Medicaid Innovation in an attempt to find efficiencies in the delivery of health care to the poor and the elderly.

Thompson also touts his support of tax credits that encourage employers to provide workers with health insurance and argues the government should encourage wellness initiatives. The ACA does both.

However, whereas the ACA will prohibit insurers from denying coverage to individuals based on pre-existing conditions as of 2014, Thompson’s plan seeks to cover otherwise uninsurable individuals by creating federally funded high-risk pools. (The ACA also created such pools, but only as temporary solutions until 2014, when they will no longer be necessary)

Under Thompson’s plan, the federal government would distribute block grants to the states to subsidize the high-risk pools so that those participating “would never pay more than 150 percent of the standard rate for insurance.”

In addition, whereas the ACA requires individuals to buy comprehensive health insurance, Thompson says consumers should be encouraged to buy “catastrophic coverage,” which would only cover some health care expenses, and would appeal primarily to the young and the healthy.

While Thompson will not say so, these two proposals portend a steady increase in government spending on health care, particularly at the state level.

“As healthier persons opt out of the comprehensive coverage market, the segment with greater needs will put actuarial pressure on the rates for comprehensive coverage and quickly exceed the 150 percent threshold,” says professor Donna Friedsman, director of health policy programs at the UW Population Health Institute, of the likely outcome of the Thompson health care proposal.

Whereas the Affordable Care Act forces healthy consumers and insurance companies to help shoulder the costs of covering the chronically ill, Thompson’s plan appears to put the entire burden on state and federal government.

So far, the Thompson campaign does not have an answer for how his plan would be financed.

“Specifically, how such a proposal is funded needs to be part of a broader conversation on developing more efficient means for addressing the rising cost of health care, both privately and publicly, meriting a thorough review,” responded campaign spokesman Brian Nemoir when I asked whether Thompson’s plan would lead to more government spending.