My plan for Massachusetts health insurance reform

OVER THE PAST two years, Massachusetts state government has made enormous progress. Together with the Legislature, we've tamed out-of-control budgets, revamped housing policy, accelerated the building of new schools, opened higher education scholarships to working families, and streamlined excessive bureaucracies -- all without raising taxes.

Now, in the same bipartisan fashion, let's tackle the issue of healthcare. Next year I am committed to working with the Legislature to pass a comprehensive, market-based reform program for healthcare. It will not be a government-mandated universal coverage "pay or play" scheme nor a single payer system. It will not require new taxes. What it will do is restrain the growth in healthcare costs and change how we provide healthcare for those who receive it at taxpayer expense. And, it can lead to every citizen in Massachusetts having health coverage. I call it Commonwealth Care.

Insuring the uninsured. A total of 460,000 people in Massachusetts are uninsured. The problem of the uninsured is everyone's problem, costing government, providers and ultimately you more than a billion dollars every year. Let's look at who makes up the uninsured:

People who can afford insurance, but don't buy it. More than 100,000 of the uninsured have household incomes of over $75,000 a year; 168,000 are over $56,550 a year. I've spoken with numerous people who say that they don't buy health insurance because it's expensive, they bet they won't get sick, if they do get sick they won't be refused healthcare or their employer doesn't offer insurance. Today our laws prevent insurers from offering policies with only basic benefits. Bells, whistles, and costly options are mandated.

Insurers tell us they can develop plans costing less than half of today's standard rate of $500 for an individual. These plans still provide primary, preventative, specialty, and catastrophic care. The cost could be lower with higher deductibles and more restrictions. New York introduced a program in which private insurers offer rates as low as $140 a month. We can have a similarly affordable program in Massachusetts: Commonwealth Care Basic.

This policy would be available for small employers, sole proprietors, and individuals. We would apply "carrots and sticks" to encourage everyone to purchase.

The unemployed and newly employed: 36,000 of our uninsured are unemployed or have recently started a new job. For the unemployed, our Medical Security Trust contributes towards insurance for 30 weeks. If we use this trust to purchase Commonwealth Care Basic, we can provide insurance for a longer period of time with no new employer costs. New employees will be eligible to purchase Commonwealth Care Basic during their waiting period.

The Medicaid eligible. 106,000 of our uninsured actually qualify for Medicaid insurance already. We've begun screening all uninsured patients who show up at hospitals and other providers and signing up those who are eligible.

The last one-third: The actions proposed above can provide insurance coverage for two-thirds of our uninsured population. The 150,000 who remain include the working poor and long-term unemployed. I will work with the Legislature and the providers to develop Safety Net Care to replace the Uncompensated Care Pool. Safety Net Care will provide aggressively managed treatment through a specified network of clinics, community health centers and hospitals. We will continue requiring those who receive Safety Net Care to pay according to their means.

Appropriate care in the appropriate setting: One way our insurers and our state health programs will be able to provide care at a lower cost is by directing patients towards the most effective and efficient care. A sore throat can be diagnosed and treated by a physician or at an emergency room, but the cost varies dramatically. Our Basic and Safety Net plans will direct patients to providers so they receive high quality care at the lowest cost. By directing patients this way, we will encourage the development of these providers.

Reforming "healthfare." President Clinton and others recognized that the welfare system was rife with counter-incentives and abuse. I believe that the same is true of Medicaid. I've heard working families lament that they pay more and get less healthcare than people who don't work at all.

We should boost fraud detection and penalties. We should redefine "household income" to include the income of a child's parent who is not living in the home. Just because a parent has moved out shouldn't free them from responsibility for the family. We should also look at a limited work requirement, where appropriate. Asset transfers made to meet poverty criteria must be more strictly limited.

Reducing unnecessary system costs. Some of the largest costs in our system are hidden, unnecessary, or excessively large. They include administrative, medical error, malpractice, and defensive medicine costs. Commonwealth Care will include malpractice reform, first-in-the-nation electronic health records, medical quality and cost reporting, and a program to increase the supply of nurses.

Will Commonwealth Care cost the taxpayers more? No! Neither the state nor the taxpayers can afford to pay more. In fact, a key objective is to lower the cost of health insurance for all our citizens and allow our citizens to buy the insurance plan that fits their needs.

Commonwealth Care is still a work in progress. Senate President Robert Travaglini and Speaker Salvatore DiMasi have expressed their commitment to action. Together, I know we can forge a final product that will truly serve the people of the Commonwealth.

Mitt Romney is governor of Massachusetts.