Has Mitt Romney’s Massachusetts Health Care Law Worked?

May 12, 2011 12:35pm

ABC News' Huma Khan reports: Potential 2012 presidential candidate Mitt Romney will deliver a speech today explaining why, as governor, he signed into law the controversial Massachusetts health care plan that many say is the model for the national law passed last year.

Romney has attempted to stave off criticism from his Republican colleagues on supporting a plan that has all the elements loathed by conservatives, especially the requirement that all state residents must carry insurance. But his message has yet to appease the base.

The Massachusetts health care plan, which celebrated its fifth anniversary on April 12, has met with mixed successes.

Probably the biggest achievement its supporters can tout is the number of people that are now insured. More than 98 percent of Massachusetts’ residents now have insurance, including 99.8 percent of all children, making Massachusetts’ rate of uninsured the lowest in the United States. About 94 percent of state residents were insured before the law took effect in 2006.

Under the law, health insurance for adults earning up to 150 percent of the federal poverty level, and children of parents earning up to 300 percent of that level, is fully subsidized.

About 77 percent of private companies are providing health insurance to their employees, compared to 70 percent before the law was passed, according to the office of Gov. Deval Patrick. The law requires that all employers with more than 11 full-time employees make a “fair and reasonable” contribution toward their workers’ health plans or face penalties.

The mandate that requires all state residents to carry health insurance has also proved to be effective. About 97 percent of taxpayers are complying with that requirement.

The law, however, has failed to curb rising costs. While implementation of the law itself didn’t put a major dent in the state’s budget – according to an analysis by independent group Massachusetts Taxpayer Foundation, the increase in net spending for the law was just 1 percent in fiscal year 2010 – it hasn’t reduced overall costs for policy holders. 

Private spending per member grew by 15.5 percent on average between 2006 and 2008. Meanwhile, average premiums for full insurance increased 12.2 percent from 2006 to 2008, according to the Massachusetts Division of Health Care Finance and Policy.

Proponents of the law argue that it was mainly designed to expand coverage, not tackle health care costs. Much of the growth in premiums, per the DHCFP, was caused by an increase in medical expenses. More than 88 percent of premiums in Massachusetts are spent on medical expenses.

But opponents point to the shift in cost burden from employers to individuals as a sign of the law’s weakness. The median health insurance premium for a policy holder in Massachusetts was $442 in 2009, a 21 percent jump from 2005. Meanwhile, employers’ share of premiums fell in the same time period.   

Bankruptcy filings due to medical costs have also jumped, increasing by more than one-third between 2007 and 2009, according to analysis published in The American Journal of Medicine in March.

Rising costs continue to pose a challenge for the state. A survey published by Blue Cross Blue Shield Massachusetts Foundation in April found that per capita health care spending in Massachusetts is projected to nearly double by 2020.

Small businesses also have yet to see the full benefits of the law. Like the national law, the state insurance exchanges were meant to give small businesses a choice of finding cheaper health alternatives, but that hasn’t happened yet. Premiums charged to small businesses since 2006 have risen faster than average, growing by 5.8 percent from 2006 to 2008, compared to a 4.8 percent growth for mid-size companies.

Though the Massachusetts health care law has been panned by Republicans nationwide, local support for it remains steady.

Two out of three adults in the state support the law, while 88 percent of doctors say it improved, or did not affect, the quality of care, per the BCBS survey.

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