Former Massachusetts governor and likely 2012 presidential aspirant Mitt Romney has been on the wrong side of the defining political battle of our time.
Mr. Romney claimed earlier this month on "Fox News Sunday" that the Massachusetts health reform plan he signed into law in 2006 is "the ultimate conservative plan." But there are many similarities between it and the ObamaCare loathed by conservative voters.
Both have an individual mandate requiring most residents to have health insurance or pay a penalty. Most businesses are required to participate or pay a fine. Both rely on government-designed purchasing exchanges that also provide a platform to control private health insurance. Many of the uninsured are covered through Medicaid expansion and others receive subsidies for highly-prescriptive policies. And the apparatus requires a plethora of new government boards and agencies.
While it's true that the liberal Massachusetts legislature did turn Mr. Romney's plan to the left, his claims that his plan is "entirely different" will not stand up to the intense scrutiny of a presidential campaign, especially a primary challenge. Mr. Romney needs to be more honest about his Massachusetts experiment and its failings.
Mr. Romney insisted in a recent interview on "Fox News Sunday" that "our plan is working well," and he defended his state's right to create its own plan. He also said in his book "No Apology" that because of the plan everyone in Massachusetts now has access to "portable, affordable health insurance." Not exactly.
While Massachusetts' uninsured rate has dropped to around 3%, 68% of the newly insured since 2006 receive coverage that is heavily or completely subsidized by taxpayers. While Mr. Romney insisted that everyone should pay something for coverage, that is not the way his plan has turned out. More than half of the 408,000 newly insured residents pay nothing, according to a February 2010 report by the Massachusetts Health Connector, the state's insurance exchange.
Another 140,000 remained uninsured in 2008 and were either assessed a penalty or exempted from the individual mandate because the state deemed they couldn't afford the premiums.
Mr. Romney's promise that getting everyone covered would force costs down also is far from being realized. One third of state residents polled by Harvard researchers in a study published in "Health Affairs" in 2008 said that their health costs had gone up as a result of the 2006 reforms. A typical family of four today faces total annual health costs of nearly $13,788, the highest in the country. Per capita spending is 27% higher than the national average.
The state's stubbornly high health costs are partly the result of intrusive government regulations that stifle competition in the insurance market and strict mandates on what services insurance must cover. A 2008 study by the Massachusetts Division of Health Care Finance and Policy found that the state's most expensive insurance mandates cost patients more than $1 billion between July 2004 and July 2005. The Massachusetts health reform law left all of them in place.
Further, insurance companies are required to sell "just-in-time" policies even if people wait until they are sick to buy coverage. That's just like the Obama plan. There is growing evidence that many people are gaming the system by purchasing health insurance when they need surgery or other expensive medical care, then dropping it a few months later.
Some Massachusetts safety-net hospitals that treat a disproportionate number of lower-income and uninsured patients are threatening bankruptcy. They still are treating a large number of people without health insurance, but the payments they receive for uncompensated care have been cut under the reform deal.
The Bay State is also suffering from what the Massachusetts Medical Society calls a "critical shortage" of primary-care physicians. As one would expect, expanded insurance has caused an increase in demand for medical services. But there hasn't been a corresponding increase in the number of doctors. As a result, many patients are insured in name only: They have health coverage but can't find a doctor.
Fifty-six percent of Massachusetts internal medicine physicians no longer are accepting new patients, according to a 2009 physician work-force study conducted by the Massachusetts Medical Society. For new patients who do get an appointment with a primary-care doctor, the average waiting time is 44 days, the Medical Society found.
As Dr. Sandra Schneider, the vice president of the American College of Emergency Physicians, told the Boston Globe last April, "Just because you have insurance doesn't mean there's a [primary care] physician who can see you."
The difficulties in getting primary care have led to an increasing number of patients who rely on emergency rooms for basic medical services. Emergency room visits jumped 7% between 2005 and 2007. Officials have determined that half of those added ER visits didn't actually require immediate treatment and could have been dealt with at a doctor's office—if patients could have found one.
Mr. Romney insists that in Massachusetts, "We didn't do what President Obama's doing, which is putting controls on our system of premiums for private insurance companies."
But that is what's happening now: Faced with soaring medical expenses, Gov. Deval Patrick, Mr. Romney's successor, wants to cap insurance rate increases at 4.8%, not the 8% to 32% increases the companies have requested for April 1. Three of the four major health insurers in Massachusetts showed operating losses for 2009. If their rates are capped, they say they'll be forced to cut payments to health providers, putting further pressure on doctors and fragile hospitals.
One of the challengers Mr. Romney could face in 2012 is Gov. Mitch Daniels of Indiana. Mr. Daniels went in a very different direction in tackling the problem of the uninsured. He created a program targeted to lower-income uninsured people who weren't eligible for Medicaid or employer insurance. Mr. Daniels's Healthy Indiana program has a fixed budget and relies on shared responsibility between the newly insured and the government in managing health spending.
The nation may well be eager to have a leader in three years with Mr. Romney's experience in tackling and fixing complex systems and who has a record as a successful businessman. But health care is likely to be the defining issue of the 2010 and 2012 elections. Unless Mr. Romney is more honest about the system he set in motion in Massachusetts, he will have a hard time convincing Republican primary voters that he has learned his health-care lesson.
Published in The Wall Street Journal, March 17, 2010.