Right now, the governor said, his state faces two important but connected problems:

• The cost of health care is rising dramatically, making it much more expensive for individuals to purchase care on their own—and individuals spend after-tax money while businesses use pre-tax funds
• 460,000 Massachusetts citizens lack any sort of health care, and many more lack adequate coverage

“If you can get everybody insured, that has a very positive effect on the cost of health care,” he said. “Part of your insurance premium is paying for the people who don’t have insurance.”

America should work to solve these problems, Heritage Foundation President Edwin Feulner said. While the establishment of Health Savings Accounts in 2003 was a victory for consumer-driven health care, he explained, “there is much work that needs to be done.”

Gov. Romney’s plan, developed in collaboration with Heritage Foundation health analysts Bob Moffit and Ed Haislmaier, includes a three-pronged solution that goes a long way towards solving the problem:

• Ensuring that all those eligible for Medicaid are covered, which substantially reduces the costs of providing care to the uninsured
• Encouraging those who are uninsured by choice to sign up, by using incentives like lower co-pays and premiums along a sliding scale
• Creating an affordable product, designed by private insurance companies and coordinated by an “insurance exchange” to make insurance available to all workers, who pay for coverage before taxes

Expanding government health care to cover the uninsured wouldn’t work, Gov. Romney said. “Medicaid wasn’t built as a broad-based all-citizen insurance program,” he elaborated. “Growing Medicaid and adding new, optional populations to Medicaid is very expensive.” Instead, the state turned to the private health industry to develop solutions.