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Healthcare plan targets businesses

Romney eyes penalties for nonproviders

Governor Mitt Romney said yesterday that he envisions a range of penalties for businesses that fail to provide health insurance, such as forcing them to pay a higher minimum wage, banning them from doing business with state agencies, or slapping a decal on their window to publicize their refusal.

The Republican governor, disclosing details of his new healthcare proposal for the first time, said a system of ''carrots and sticks" would persuade businesses that don't provide health insurance to their workers to do so. Most of the employers he is targeting are small businesses with fewer than 50 workers.

''It could actually be a lot cheaper for businesses to provide insurance than to have to conform to the higher minimum wage for those that don't provide insurance," Romney told reporters in a briefing in his State House office.

Romney suggested the Legislature could impose the higher minimum wage for employers that refuse to provide coverage the next time lawmakers consider a minimum wage increase. He emphasized that he is not specifically committed to the minimum wage idea or any of the other penalties he suggested yesterday. He also argued that the biggest incentive for companies is that insurers would offer stripped-down insurance coverage that is ''half as expensive as it's been in the past."

Business associations reacted favorably yesterday to Romney's proposal, in large part because the threatened penalties fall far short of a requirement that businesses provide coverage.

Healthcare advocacy groups, however, were far more critical, saying they doubted that Romney's approach would significantly reduce the number of uninsured workers in the state.

Also yesterday, Romney said he wants the state to target fraud in the healthcare system, and he cited the case of students who are obtaining government-subsidized insurance intended for the poor. He said he has spoken to university officials and learned that ''a number of students have signed up for MassHealth Basic and were receiving their care at our expense, even though their parents were paying very healthy tuitions for them to be in our state." He refused to identify the university.

''Clearly that is not playing by the rules, and we need to substantially increase our resources in looking at cases of fraud in the system," Romney said. ''We believe that there is substantial misapplication of state resources for people who don't truly qualify for our health system safety net."

The details that emerged yesterday follow Romney's article Sunday in the Globe's opinion pages, in which he said he wants to change state regulations to allow insurers to offer stripped-down health plans to small businesses and individuals; redouble efforts to enroll eligible people in Medicaid; and hold down medical costs by advocating ''aggressively managed treatment" in a network of clinics, community health centers, and hospitals. Romney wrote that those steps ''can lead to every citizen in Massachusetts having health coverage" without an infusion of additional state dollars.

''We believe within the billions upon billions that we spend that we can find a way to provide healthcare to all who need it in a more efficient and effective way," the governor said yesterday.

Romney unveiled his plan in the Globe just days after Senate President Robert E. Travaglini, a Democrat, vowed to make healthcare the focus of next year's legislative session. Travaglini, who set a goal of covering half of the state's uninsured by 2006, has declined to comment on Romney's plan.

Estimates of the number of uninsured people in Massachusetts range from the state's calculation of 450,000 to the 650,000 counted by the US census.

The governor has invited business representatives to meet with him in his office today to discuss the plan. Business leaders, who fear an ironclad requirement that they provide coverage, said yesterday they were generally receptive to Romney's ideas.

''Any time we move toward a more market-based solution to the problem, that's a good step," said Bill Vernon, state director of the National Federation of Independent Business, whose 11,000 Massachusetts members have an average of five employees. Smaller firms are less likely to offer health insurance to their workers. ''We in this state have always tended to look more at government mandates and more taxpayer money as the solution," Vernon said.

Rick Lord of Associated Industries of Massachusetts, which represents 7,600 businesses of all sizes, said the state should see how many businesses will purchase the lower-cost insurance Romney is advocating before implementing punitive measures. Nevertheless, Lord praised the governor's opposition to a requirement that employers cover their workers.

But healthcare advocates and legislative critics said Romney will not be able to achieve his stated goals without an employer mandate or additional state spending.

John McDonough of Health Care for All derided the Romney plan as ''smoke and mirrors."

''This is their soft shoe away from the real choices necessary to expand coverage," said McDonough, who as a state representative helped spearhead a healthcare initiative in the mid-1990s to extend coverage to uninsured children. ''The notion that you can do this for free is absurd. If it were cheaper to cover everybody with the existing dollars, we would have done it a long time ago."

McDonough said Romney's advisers realize the state can't come close to covering everyone without requiring employers to cover their workers. McDonough's group filed a public records request yesterday seeking a 28-page document written by Romney's health and human services chief, Ronald Preston, and his department, to shed light on Romney's deliberations.

Senator Mark C. Montigny, a New Bedford Democrat who is a former chairman of the Health Care Committee and who worked with McDonough on the issue when the two served together in the Legislature, agreed that Romney's plan avoids the hard choices necessary to significantly reduce the ranks of the uninsured.

Romney says that he is open to discussions with leading legislators, and that he hopes to forge a consensus with them and craft a joint plan, rather than file a bill of his own. But he insisted yesterday that it is possible to insure nearly everybody without additional spending, even if Massachusetts loses $600 million in federal Medicaid dollars, which appears increasingly likely.

The administration has so far declined to attach price tags to any of its proposals, but the governor said the roughly $40 billion spent on healthcare each year is enough to cover everyone.

Globe correspondent Elise Castelli contributed to this report. Scott Greenberger can be reached at

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