$100K Earners Get State Health Care in Massachusetts

By Fred Lucas | July 7, 2008 | 8:23 PM EDT

(CNSNews.com) - A Massachusetts family earning up to $103,000 a year is eligible for state-subsidized health insurance. However, Massachusetts officials won't disclose how many families making that much are also getting state insurance.

The state's health care plan, passed by the legislature and signed by then-Gov. Mitt Romney in 2006, is now expected to exceed state budget estimates by $400 million in 2009, or about 85 percent than projected.

Though the Commonwealth Health Insurance Connector Authority, which administers the program, says a family of eight earning up to $103,716 is eligible for government health care, such information cannot be made public under federal privacy rules, said Joan Fallon, spokeswoman for the agency. She cited the Health Insurance Portability and Accountability Act (HIPAA) that shields health records.

"We don't have info on how many families of eight making up to $103,000 are enrolled in Commonwealth Care," Fallon told Cybercast News Service. "I checked with our staff and it would take weeks to get that. Also, I am told that this subset would be so small that we would not be allowed to release it under HIPAA."Then-Massachusetts Gov. Mitt Romney signs a sweeping health care reform legislation in 2006

The program that Romney - a Republican presidential candidate - recently called a "conservative plan" was sold largely as a free market solution to provide health care for all citizens of Massachusetts.

On the campaign trail, Romney has praised the plan, which requires every Massachusetts resident to buy a private plan, get on a state-subsidized plan or face strict tax penalties.

State officials anticipated about 140,000 people would join the new plan. But more than twice as many did so, the bulk of them signing up for state-subsidized health insurance, which has boosted the estimated costs of the program.

For instance, since the plan began, 293,000 more people are insured in Massachusetts: 160,000 enrolled in the state-subsidized program; 70,000 more enrolled in Medicaid; and another 63,000 enrolled in private plans, according to Commonwealth Connector.

A household of seven with an annual income of up to $93,276 is eligible for the plan, as is a household of six with an income of up to $82,836. The sliding scale rounds down to a family of four earning up to $61,956 and a single person with an income of up to $30,630.

While Romney praises his plan, he has said that if elected president he would not seek to mandate the Massachusetts model for the country.

"A lot of people talk about health care. I'm the only one that got the job done. I got health insurance for all our citizens," Romney said during the California debate on CNN last week. "We had 460,000 people without insurance. We got 300 of them - 300,000 of them signed up for insurance now. I'm proud of what we accomplished."

When campaigning in New Hampshire this year, Romney said, "We put in place a plan that gets every citizen in our state health insurance and it didn't cost us new money. And it didn't require us to raise taxes."

But the plan's fiscal problems could likely lead to a tax hike or some significant adjustments, analysts said.

"Were the promises greater than what could be delivered? Yes," Tom Miller, a senior fellow at the conservative American Enterprise Institute, said in an interview.

"Is this a model for many other states across the nation? Clearly not. Bottom line, if this doesn't work in Massachusetts, it can't work anywhere else. And we're finding out it doesn't work as designed and promised in Massachusetts," Miller added.

Nonetheless, Sen. Hillary Clinton (N.Y.) and to a lesser extent Sen. Barack Obama (Ill.), both Democratic presidential contenders, are using the Massachusetts plan as a national model.

Other states are being cautious. Last week, the California state Senate, controlled by Democrats, stopped a universal health care bill supported by Republican Gov. Arnold Schwarzenegger, mostly because of its high budget estimates.

While the Massachusetts plan "falls far short of a market-based system," Miller said it differs from that which was offered by then-first lady Hillary Clinton in the early 1990s. That plan had far more rules and more government control, said Miller.

Published reports about the Massachusetts plan's fiscal problems are exaggerated, said Dick Powers, also a spokesman for the Commonwealth Connector. He said the fact that 300,000 people who didn't have insurance before do now should be received as good news.

"This has been an extremely successful program," Powers told Cybercast News Service. "The people criticizing this are the same ones who wanted the plan to fail from the start, so they will grab onto anything."

'A mixed bag' or the 'Big Dig'

During last week's GOP debate in California, Romney said that the plan he submitted "didn't cost $1 more than what we were already spending." Then he blamed his successor, Gov. Duvall Patrick, and the state legislature for adding "bells and whistles" to the program and expanding the cost.

But problems were definitely built into the system from the beginning, said Gracie Marie Turner, president of the Galen Institute, a think tank that focuses on free market solutions to health care.

For one, the state did not change its regulatory policies, which is what drove costs up to start with, said Turner, who is also a board member of the Business & Media Institute, a sister-division of Cybercast News Service under the parent company Media Research Center.

"They're not likely to roll back the plan to get themselves out of the hole, they'll probably just increase the responsibility of the employers," Turner told Cybercast News Service. "This could gravitate toward price controls. ... It's not driven by market dynamics. It's driven by politics."

While one of the plan's architects, Robert Moffit, director of the conservative Heritage Foundation's Center for Health Policy Studies, agrees that Massachusetts should have deregulated the market more, he thinks the plan is showing signs of success.

"It was always a mixed bag," Moffit told Cybercast News Service. "The two big policies are that it provided portable health insurance, which is offered nowhere else in the nation, and instead of subsidizing hospitals, it uses that money for individuals and families to get their own health care coverage."

Ultimately, he asked, "300,000 more people are insured. Is that a good thing or a bad thing?"

Cybercast News Service
previously reported that some conservatives were upset that the Romney health care plan provided state funding for abortions.

Anecdotally, one of the bigger problems since the plan became law in July 2006 is that people are having trouble finding a primary care physician, Turner said. With more people insured and making appointments, many of the doctors aren't taking new patients.

If anything good comes out of the Massachusetts plan, said Turner, it would be that once the health care reform debate re-emerges at the federal level, politicians will know what doesn't work. That's an example they did not have during the 1993-1994 debate on universal health care.

"This has all the elements of a gigantic infrastructure project with a lot more costs and programs than anticipated," Turner said. "Massachusetts has a history of big projects with cost overruns. Time will tell if this health coverage plan fits into the same category as the Big Dig."

The "Big Dig" was the nickname of a major highway construction project in Boston that became a symbol of a government boondoggle: the project started in 1991, faced numerous delays, and eventually cost $15 billion - almost three times more than was estimated.

After the project was completed in 2005, it was discovered the tunnel was leaking and that some contractors had used sub-standard material. Later, a ceiling panel collapsed and killed a woman who was driving in the tunnel.

Miller thought such a metaphorical comparison was not off-base because the health care system "does have architectural flaws and it is easier to dig holes than to fill them up."

Romney's chief rival for the Republican presidential nomination, Arizona Sen. John McCain, criticized the health care plan in a campaign ad that said, "Mitt Romney's state health care plan is a big government mandate. It's not very good. ... In fact, Romney's plan is a big government solution that costs taxpayers. It's failing. Hundreds of thousands of people are uninsured - $400 million over budget. Now taxes will be raised in the future to pay for it."

The organization FactCheck.org criticized McCain for the ad, accusing him of presenting opinion, such as "not very good," as fact and saying that it is unknown at this point whether taxes will increase in Massachusetts to pay for the plan.

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