Romneycare’s 98% Success Rate Defies Gripes on Obama Law

The success of the Massachusetts health-care system is spurring President Barack Obama to extol the virtues of a law Mitt Romney signed as a governor.

Romney, running for the Republican presidential nomination, says it shouldn’t be the model for every state.

About 98 percent of state residents are insured under the legislation Romney signed in 2006, a 10 percent rise from the previous three-year average. Government costs haven’t ballooned, officials say, and 63 percent of residents support the law. Yet Romney is promising to repeal the 2010 U.S. law Obama and his fellow Democrats fashioned on the Massachusetts program.

“It’s a crazy awkward situation,” said Stuart Altman, a professor of national health policy at Brandeis University in Waltham, Massachusetts, by telephone. Romney “can’t take credit. I wish he could; it’s one of his real accomplishments.”

Barack Obama on March 22 told National Public Radio the state law’s success was a model that will make other Americans say: “Why aren’t we trying it as well?” A day later, Romney wrote a USA Today opinion piece saying the state law’s provisions shouldn’t be foisted on others.

While Romney’s primary foes attack both health plans, and the Supreme Court (1000L) begins debate today on the U.S. mandate’s legality, Massachusetts has brought the idea of health-coverage- for-all to life, the state law’s designers and operators say.

‘Guy in a Bar’

“It’s funny,” Altman said. “I was talking to a guy in a bar who said he supported the Massachusetts law, and then he was very critical of the national law. I said, ‘what’s up with that?’ He didn’t want to go there, but I think it shows the situation Mitt Romney is in.

“What you have are people who are Republicans who are accepting the party line nationally, but locally find the law has worked out just fine for them,” he said.

About 16 percent of Americans, or 50 million people, were uninsured in 2010, according to the Kaiser Family Foundation, of Menlo Park, California. Under the U.S. health-care overhaul, most people would be covered under a process that begins in 2014. First, though, the need for everyone to have insurance faces a Supreme Court challenge by 26 states that say it is unconstitutional. The legal debate will begin today.

The Obama administration argues the mandate is needed because patients who aren’t insured have their care paid for indirectly by people who are, in the form of higher prices that can bleed across state boundaries. Opponents counter that the U.S. Constitution doesn’t give Congress the authority to regulate what people don’t want to buy.

‘Genius of Federalism’

Romney offers a different view. He supports “giving each of the 50 states the resources and the responsibility to craft the health-care solutions that suit their citizens best,” he wrote in his USA Today opinion piece.

The Massachusetts law “got our citizens insured without raising taxes,” the article says. “Other states will choose to go in different directions. It is the genius of federalism that it encourages experimentation, with each state pursuing what works best for them.”

The commentary doesn’t address how Romney views the state law’s individual provisions. A campaign spokesman, Ryan Williams, wouldn’t comment further, instead pointing to the former governor’s comments in a Jan. 27 primary debate.

The Massachusetts system “has a lot of flaws, a lot of things I’d do differently,” Romney said then. “It has a lot of benefits. The people of the state like it by about three to one. We consider it very different than Obama Care.”

Others disagree about the differences.

‘More Ambitious Version’

“The federal reform is simply a more ambitious version of the Massachusetts reform,” said Jon Gruber, a professor of economics at the Massachusetts Institute of Technology in Cambridge who helped policy makers write both laws.

“Within three years, we should see that the federal reform has covered the uninsured and stabilized the non-group market” covering individuals who now face much higher premiums, Gruber said in a telephone interview.

A 2011 poll by the Boston Globe and the Harvard School of Public Health showed that 63 percent of Massachusetts residents supported the state law. The U.S. law has an approval rate of 41 percent, and an unfavorable view by 41 percent of those surveyed, according to a monthly tracking poll by Kaiser.

The Massachusetts law has “turned out to be a success,” said David Cutler, an economics professor at Harvard University in Cambridge who helped policy makers draw up the law, in a telephone interview “People have gotten coverage. They got coverage at the rate we thought, and at the cost we thought.”

Obama Prediction

Obama, in the NPR interview, predicted the U.S. overhaul would gain public support as its benefits kick in. “When people see that in fact it works, it makes sense -- as it is, by the way, working in Massachusetts,” he said.

Ben LaBolt, a spokesman for the Obama campaign, criticized Romney’s stand on the Massachusetts law, saying in a statement, “It’s amazing how far Mitt Romney has come in his beliefs.”

Mary Flynn, 60, who has gained from the Massachusetts law said of Romney, “I’m glad that he did what he did for the people of Massachusetts.” His stand now that he’s running for president, she added, is “politics. He’s going for what he thinks is going to be appropriate for him now.”

Flynn, a public relations executive in Boston, left her job in February 2011 to start her own company. She signed up for COBRA health insurance from her former employer, whom she declined to name, as she was leaving. In August, she got a “very terse letter” from the company telling her it had dropped her coverage in May, after an address error on her June invoice caused her to inadvertently miss a payment.

Inhaler Costs

Flynn has asthma and uses a drug inhaler, Advair (GSK), that costs $210 a month retail through drugstore.com. She paid $60 a month for it through her COBRA plan, before it was canceled. She then turned to the Massachusetts Health Connector, the state’s insurance exchange created in 2006 under Romney.

“I felt like they threw me a lifeline,” she said, adding that her inhaler now costs her just $3.50 a month. “It’s the best insurance I’ve ever had.”

The Massachusetts law, like the U.S. overhaul, mandates that most residents be covered by health insurance, and fines those who aren’t. It offers subsidies to low-income people to help them gain insurance and has broadened Medicaid to help out.

Massachusetts Against the Individual Mandate, which started a petition drive last year to remove the insurance requirement, gave up after deciding other priorities were more important, said Anne Fox, an organizer.

Small-Business Effect

When it comes to opposition to the Massachusetts legislation, “there isn’t as much as you would expect,” said Fox, president of Massachusetts Citizens for Life.

The group may try again in 2014, partly depending on the Supreme Court (1000L) ruling, she said. One concern Fox’s organization has is that the state mandate may hurt small business, keeping them from hiring workers full-time to avoid a threshold that requires they supply a health plan or be fined, she said.

Lora Pellegrini, president of the Massachusetts Association of Health Plans, a Boston-based nonprofit group, said supporters of the state law are concerned about the local impact should the Supreme Court eliminate the national mandate.

“We’ve always been nervous here that there could be a state court challenge,” she said in a telephone interview. “There’ve been rumblings, but nothing’s ever materialized. We’re watching what the feds do because they give people ideas locally.”

No Budget Buster

One reason the law hasn’t been successfully attacked is because it hasn’t had the budget-busting effects opponents had predicted, said Glen Shor, executive director of the Commonwealth Health Insurance Connector Authority, in a telephone interview.

“There were concerns that there would be spiraling spending and out-of-control cost overruns,” said Shor, whose authority was set up by the law to offer state-subsidized coverage to those below a certain income level. “That has just eminently not been the case at all.”

The rate the state pays insurers to offer subsidized coverage has grown at no more than 3 percent, and more businesses are offering health coverage instead of dropping it to let workers sign up with the state, he said.

While the Massachusetts law drew bipartisan support within the state when it was passed, it’s been targeted by opponents of Romney’s quest to gain the Republican presidential nomination.

‘Romney Care’

Romney is “the same man who gave us Romney care and advocated for Obamacare,” said Rick Santorum, the former senator from Pennsylvania who is also seeking the nomination at a March 18 rally in Illinois.

He called Romney “uniquely disqualified” to run against Obama and the federal health law for that reason.

There is still work to do in Massachusetts, according to people who support the law. While the price for health plans has been kept relatively steady, treatment costs are rising as the number of insured people seeking care has increased.

Per capita health-care spending in Massachusetts has been the highest in the nation since at least 1998, according to a 2011 study in the journal Medicare & Medicaid Research Review, published by the U.S. Centers for Medicare and Medicaid Services.

Dealing with those costs is a doable next step, according to Harvard’s Cutler. “Unlike poisonous Washington debates, at the state level you’ve got to get stuff done,” he said. “You can’t just score cheap shots all day.”

Handcuff Spending

State lawmakers are considering a proposal to handcuff health spending to the state’s gross product, with the goal of having health costs grow no faster than Massachusetts business and government can support, said Pellegrini, of the Massachusetts Association of Health Plans.

“It makes a lot of sense,” Pellegrini said by telephone. “Health care needs to reflect what’s going on in our economy. There’s going to be a lot of debate about what the right number is. We don’t want to cut too deep, but we want to do something that’s meaningful to get spending under control.”

To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net;

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.