When Massachusetts Gov. Mitt Romney (R) signed into law a bill creating near-universal health coverage for all state residents April 12, he encountered near-universal opposition from free-market organizations and think tanks, which predicted the plan would be a dismal failure and a bad precedent whose ripples could spread nationwide. The law requires every individual in the state to purchase health insurance by July 1.
Romney–a Republican widely considered to be a front-runner for the White House in the 2008 elections–endorsed the plan in glowing terms in an April 11 Wall Street Journal editorial.
Early in his gubernatorial tenure, Romney had set out to find why 550,000 Massachusetts residents didn’t have health insurance. He found 20 percent of them qualified for Medicaid but never signed up, 40 percent could afford health insurance but considered it too expensive, and the remainder were caught in the middle: They earned too much to qualify for Medicaid, but not enough to buy private coverage.
The solution, Romney wrote, was to make private health insurance more affordable through changes in state law to permit higher deductibles, higher co-payments, and fewer mandated benefits … and then require every state resident to purchase a private plan, sign up for Medicaid, or pay a penalty to the state.
“Some of my libertarian friends balk at what looks like an individual mandate,” Romney wrote. “But remember, someone has to pay for the health care that must, by law, be provided: Either the individual pays or the taxpayers pay. A free ride on the government is not libertarian.”
But the new plan poses an enormous loss of privacy for all patients, critics say, and that is not democratic.
In an April 10 news release urging Romney not to sign the bill, the Council for Affordable Health Insurance (CAHI)–a 14-year-old nonprofit research group based in Alexandria, Virginia–outlined the case against it.
Residents must sign “Health Insurance Responsibility Disclosure” forms under oath, which the insurance commissioner can investigate. Information-gathering organizations can request any information on a business and its employees. Critics also noted the plan will add many new persons to the small group insurance market–driving up costs that will ultimately make insurance more expensive, not less, because more people with poor health will be forced to buy coverage.
“This program is being sold by the governor as a ‘free market’ proposal,” J.P. Wieske, CAHI’s state affairs director, said in the statement. “But this plan is a roadmap for a single-payer system that will be a disaster for Massachusetts taxpayers and residents.”
John R. Graham, director of health care studies at the Pacific Research Institute in San Francisco, agreed.
“Forcing people to buy health insurance does nothing to reduce the cost of health care,” Graham explained. “Indeed, it relieves pressure on both insurers and providers, such as hospitals, to innovate and bring patients higher quality services at lower cost.
“One of the challenges the providers face is that of ‘uncompensated care,'” Graham continued, “but uncompensated care is an unintended consequence of laws which force hospitals that admit Medicare patients to give emergency care to everyone without asking them if they can or intend to pay for their care, either by themselves or with insurance.
“The Massachusetts bill perpetuates what we’ve seen for decades in America–laying down bad laws to turn back the effects of previous bad laws, so that we can barely tell where the whole twisted ball of yarn begins,” said Graham. “In this case, the state becomes the bill collector for the health provider, and the patient loses the due process that is his right with respect to any other debt.”
Political strategists and state legislators applauded the plan, and some considered it a stroke of election-campaign genius. The Massachusetts Legislature–composed of 85 percent Democrats–passed the bill April 3 on a 155-2 vote, giving Romney “95 percent” of what he wanted in the plan he’d spent two years crafting, he told the New York Times on April 5.
“This is probably about as close as you can get to universal,” Paul B. Ginsburg, president of the Center for Studying Health System Change in Washington, DC, told the Times. “It’s definitely going to be inspiring to other states about how there was this compromise. They found a way to get to a major expansion of coverage that people could agree on. For a conservative Republican, this is individual responsibility. For a Democrat, this is government helping those that need help.”
The bill itself is not all bad, said Devon Herrick, Ph.D., a senior fellow at the National Center for Policy Analysis in Dallas. It allows some additional groups of workers to buy insurance with pre-tax dollars, and it creates a mechanism for portability, allowing workers to carry their insurance with them from job to job.
According to the Associated Press, several states, including Illinois and New York, are already keeping watch on how Massachusetts’ plan will play out, with an eye toward emulating it if the results are good.
But Greg Scandlen, founder of Consumers for Health Care Choices–an advocacy group based in Maryland–predicted they would not be.
“This thing will be a massive failure,” Scandlen said. “The benefits are too rich, the incentives too small, the bureaucracy too huge and intrusive, and the penalties are small enough to keep people from participating, but large enough to infuriate them. It does nothing to fix Massachusetts’ underlying problems, like community rating (when the same rate is charged to everyone in the group, regardless of age, gender, or health status), mandated benefits, and outrageously high health care costs.
“Having it fail wouldn’t bother me,” Scandlen said, “except many people would conclude, ‘Well, we tried individual responsibility and it failed, so the only thing left is single payer.'”
Karla Dial ([email protected]) is managing editor of Health Care News.
For more information …
The House version of House Bill 4479, which Gov. Mitt Romney signed with some amendments not reflected here, is available online at http://www.mass.gov/legis/bills/house/ht04pdf/ht04479.pdf.