Do Mitt Romney's Health Care Claims Line up With the Facts?

May 12, 2011— -- Potential 2012 presidential candidate Mitt Romney today defended the controversial Massachusetts health care plan that he signed as governor, and that many say is the model for the Affordable Care Act championed by President Obama last year. But an analysis by ABC News shows that not all Romney's claims are supported by the facts.

Arguing that "President Obama's plan, in my view, doesn't work properly, and it should be repealed," Romney today said his plan worked because it was tailored for one particular state instead of imposing a top-down approach for the entire country.

"People could tailor their programs and needs based upon the needs of the people and the system," Romney said at a speech at the University of Michigan Cardiovascular Center today. "Our plan was a state solution to a state problem. His is a power grab by the federal government to put in a place a one-size-fits-all plan."

But not all of the claims Romney made today line up with the facts.

For one, the former Massachusetts governor claimed that the health care plan he signed in 2006, five years ago, did not raise health care costs.

While implementation of the law itself didn't put a major dent in the state's budget -- the independent Massachusetts Taxpayer Foundation says the increase in net spending under the law was just 1 percent in fiscal year 2010 -- it has failed to curb overall costs for policyholders, which in fact have grown in recent years.

The median health insurance premium for a policyholder in Massachusetts was $442 in 2009, a 21 percent jump from 2005. Employers' share of premiums fell in the same period.

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 or DHCFP.

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

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

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

Romney's claim that the law helped insure nearly half a million residents, though, is true.

The law's biggest effect is the number of people in the state who 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.

About 77 percent of private companies in Massachusetts 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.

Romney also argued that unlike so-called "Obamacare," the Massachusetts health care plan did not raise taxes. While that claim is true, the law does impose tax penalties on those who don't have health coverage.

The individual mandate in the state to have health insurance has thus far proven to be effective. About 97 percent of taxpayers are complying with it.

Romney also argued that his plan did not create a government insurance program. While that is true, it did, like the Affordable Care Act, set up a system of exchanges where individuals and small businesses can shop for coverage.

As in the case of 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 4.8 percent growth for midsize companies.

Romney said today as president he would issue an executive order to provide a waiver from the Affordable Care Act for all 50 states, and then work with Congress to repeal the law.

Mitt Romney Faces Backlash on Massachusetts Health Care Law

Offering a sketch of what his own plan would look like, Romney argued that he would give states the lead in crafting their own health care laws, focus on a market-run system and eliminate federal constraints, reform medical liability, and lower health care costs, though he did not offer specifics.

The former governor praised Rep. Paul Ryan's controversial budget plan that would significantly reshape Medicare, but said that while his plan is "not going to be identical to the Ryan plan but it shares many of the same objectives."

Romney has constantly tried to stave off criticism from his Republican colleagues for supporting a plan that has elements conservatives loathe, especially the requirement that all state residents carry insurance.

In a 2007 NBC interview, Romney called the individual mandate a "terrific idea," predicting that other states would likely follow in Massachusetts' footsteps "and we'll end up with a nation that's taken a mandate approach."

Democrats have seized on his past remarks touting the Massachusetts plan as a "model for the nation," and an "experiment the other 49 states can look at."

But since he emerged on the national stage again this year, Romney has attempted to clarify his position, arguing that his plan is different than Obama's because it didn't rely on higher taxes and Medicare cuts for funding.

"I in fact did what I believe was right for the people of my state," he said today.