Governor Mitt Romney today proposed a sweeping expansion of private health coverage for the state's 460,000 uninsured people, and extended a hand to Democrats in the Legislature to pass a healthcare program next year.
In an article published in the Globe's opinion pages, Romney said he wants to change insurance laws to encourage insurers to offer stripped down health plans to small businesses and individuals. He would also provide "aggressively managed treatment" to send the working poor to clinics and hospitals for healthcare, redouble efforts to steer eligible people into Medicaid, and target Medicaid fraud.
Romney argued that his "Commonwealth Care" plan can "lead to every citizen in Massachusetts having health coverage." The governor insisted his proposal would not require a tax increase, or force employers to provide coverage to their workers, or make the state responsible for insuring everyone.
"Next year I am committed to working with the Legislature to pass a comprehensive, market-based reform program for healthcare," Romney wrote. "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."
Romney is launching the high-profile bid for bipartisanship just three weeks after his unsuccessful attempt to unseat Democrats in the Legislature. It comes amid continued speculation by Republican strategists that he is aiming for the Republican nomination for president in 2008.
Romney unveiled his plan just days after Senate President Robert E. Travaglini, a Democrat, vowed to make healthcare the focus of next year's legislative session. Together, the two leaders appear to be laying the groundwork for the most significant healthcare debate on Beacon Hill in nearly a decade.
"The cost of healthcare is an enormous challenge for our employers and our citizens, and finding a way to bring down the cost of healthcare is one of our highest priorities," Romney told the Globe last week in New Orleans during a two-day conference of the Republican Governors Association.
Romney has been working on his proposal for more than a year, but he and his aides have been tight-lipped about disclosing details. After listening to Travaglini lay out his healthcare goals last Wednesday in front of a large audience at the John F. Kennedy Library, Romney's health and human services chief, Ronald Preston, said the administration would roll out what he called a "statement of principles" in January.
The governor apparently accelerated that timetable. The administration has already reached out to Democratic leaders in hopes of beginning discussions as early as this week, according to one Democratic aide.
Separately, an aide to Travaglini declined to comment on Romney's outline last night.
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 higher estimate is more than 10 percent of the state's population.
A report by the Washington-based Urban Institute, which the Blue Cross Blue Shield of Massachusetts Foundation released last week, calculated that covering all of them would cost between $374 million and $539 million more than what federal, state and local governments and hospitals and health insurers currently spend on care for the uninsured.
But the study also estimated that providing universal coverage would generate economic and social benefits worth between $1.2 billion and $1.7 billion. People without insurance tend to have more health problems, which leads to absenteeism and reduced efficiency on the job, hurting the state's economy.
Massachusetts does not have a lot of money to spend. The state faces a budget gap of more than $900 million for fiscal year 2006, it may have to increase school spending as a result of a pending court case, and it is at risk of losing nearly $600 million in federal Medicaid money.
Romney's plan, which he says would not cost the taxpayers more money, has four main components.
The first would provide bare-bones coverage to workers in small businesses and the self-employed who decline to purchase coverage themselves because the standard rate of $500 a month is too expensive. State law prevents insurers from offering policies with only basic benefits, and eliminating some of those requirements might allow insurers to charge much lower premiums.
Romney notes that by waiving some rules, New York cleared the way for private insurers to charge as little as $140 a month.
As of December 2003, the program, called Healthy New York, had nearly 40,000 people enrolled, according to a study by the Lewin Group, a well-known healthcare consulting firm. It provides coverage to employees of firms with fewer than 50 workers, and requires the employers to pay up to 50 percent of the coverage. The state budgeted $89 million for the program in 2003, in part to subsidize insurance companies losses on major claims, the Lewin Group reported.
The New York program was started in 2001 under Governor George Pataki, who is also mentioned as a possible GOP presidential candidate in 2008.
Romney did not specify which benefits would be eliminated under his plan, which he called "Commonwealth Care Basic," but last year Colorado approved a law allowing insurers to decline coverage for low-dose mammography, mental illness, hospice care, alcoholism, and prostate cancer screening.
The bare bones plans would be available to small businesses as well as individuals. Romney promised to use "carrots and sticks" to encourage everyone to purchase some insurance, but he declined to offer specifics.
The second component of Romney's plan builds on the first, using the lower-cost option of "Commonwealth Care Basic" to extend the length of the coverage the state currently offers to the unemployed. He also would make the inexpensive plans available to newly hired workers who have a waiting period before they qualify for coverage through their employers.
Romney says as many as 106,000 of the uninsured are eligible for Medicaid but not enrolled. Critics say the administration has contributed to this problem by scaring away applicants with overly rigorous checks on financial assets. Nevertheless, Romney said his third strategy is a redoubling of efforts to sign up everyone who is eligible for coverage through the federal-state Medicaid program.
Romney hopes to cover the remaining uninsured, mostly the working poor and the long-term unemployed, by replacing the Uncompensated Care Pool, state's fund for providers who care for the uninsured, with what he called Safety Net Care.
One factor driving up healthcare costs is that the uninsured typically go to emergency rooms, where care is most expensive, for even basic medical problems. Romney says Safety Net Care would tackle this problem by directing patients toward lower-cost providers. It also would hold down costs through "aggressively managed treatment" in a network of clinics, community health centers and hospitals.
The governor also proposed to cut costs by stiffening the penalties for Medicaid fraud; pushing the use of electronic records; and changing malpractice laws to reduce doctors' liability and dissuade them from practicing so-called defensive medicine.
"Will Commonwealth Care cost the taxpayers more? No! Neither the state nor the taxpayers can afford to pay more," Romney wrote.
In his speech last week, Travaglini set a goal of covering half of the uninsured by 2006. Some healthcare specialists say it will be impossible to reach everyone without forcing employers to cover their workers, and sources close to the Senate president said he set the more modest goal in hopes of postponing that potentially divisive debate.
Even covering half of the uninsured would be difficult without "pretty generous subsidies" and an expansion of Medicaid, said John Holahan of the Urban Institute, one of the authors of the Blue Cross Blue Shield Foundation report released last week.
"You might get half without a mandate. But you won't get half without pretty generous subsidies, MassHealth expansion, and organizing the insurance market so it's much easier for people to enter," Holahan said.
Travaglini has not disclosed the details of his own plan, but he also pledged to pursue a market-based approach, as opposed to a major government expansion.
Romney and Travaglini won't be the only ones pushing healthcare proposals next year. A coalition of healthcare providers, consumer groups, and labor unions is readying a plan that would require small employers to cover their workers and make it less expensive for them to do so by, among other things, changing the way that premiums are calculated for small groups of employees.
Last July, state lawmakers approved a proposed constitutional amendment that would require the Legislature to come up with a plan for universal healthcare coverage. Under the proposal, the Legislature would have to "enact and implement such laws as will ensure that no Massachusetts resident lacks comprehensive, affordable" health insurance.
Legislators will have to approve the measure again in their next constitutional convention, in 2005 or 2006, to put the proposal on the ballot in November 2006.
In 1988, Governor Michael S. Dukakis pushed through a bill creating an "employer mandate" which called for employers with six or more workers to either offer insurance to their employees or contribute to a fund for the uninsured.
But Dukakis's successor, Governor William F. Weld, refused to implement the new law and the Legislature eliminated the requirement during the recession of the early 1990s.
In 1996, Massachusetts launched a program to cover uninsured children that became the model for a federal initiative.