Massachusetts health reform a double-edged sword for Romney

Massachusetts Gov. Mitt Romney was all smiles in 2006 as he marched into historic Faneuil Hall behind a fife and drum corps and ascended a giant stage festooned with a banner that proclaimed “Making History in Healthcare.”

Romney was about to sign a law making his state the first in the nation to effectively guarantee universal health coverage, a landmark the governor would then call “an achievement” that “comes once in a generation.”

Five years later, that achievement is still being celebrated here by doctors, hospitals, business leaders and community advocates who credit the law with ensuring that fewer than 2% of the state’s residents are uninsured, compared with more than 15% nationally.

Yet the Massachusetts milestone has emerged as perhaps Romney’s biggest obstacle to securing the Republican nomination for president in 2012.

With Republican voters still enraged at the new national healthcare law, conservatives regularly criticize the former governor for designing a measure that became a template for the overhaul President Obama signed last year. On Thursday, Romney is to deliver a major speech in Michigan that his campaign said would outline a program to “repeal and replace” Obama’s plan, the latest in Romney’s efforts to distance himself from the federal law.

“It is quite an irony,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation, one of the state’s leading business advocates. “You will find nearly universal pride in the state about these reforms and a salute to Romney for his contribution.... He had a pivotal role in health reform, but he is clearly taking less credit than he deserves.”

Romney is instead laboring to explain that he never intended the federal government to do what Massachusetts did.

“States are where healthcare programs for the uninsured should be crafted,” he told New Hampshire Republicans recently.

He has also embraced traditional GOP prescriptions such as limits to medical malpractice suits, loosening regulations on private insurance companies and expanding tax benefits for privately purchased insurance.

Though Romney calls the Obama program “a major departure from what we had crafted,” health policy experts, including many who worked on either the Massachusetts plan or the national law, see far more similarities than differences.

“Massachusetts was the model for the federal Affordable Care Act.... It is the cornerstone of the healthcare overhaul,” said John McDonough, a former Democratic state lawmaker and consumer advocate who worked on the state law and subsequently helped write the federal law for the Senate health committee in Washington.

Even some of Romney’s critics credit the former governor with developing the basic framework for guaranteeing everyone health coverage.

Like the national law, the foundation of the Massachusetts overhaul is the requirement that nearly every state resident obtain health insurance, a mandate that Romney championed as a “personal responsibility principle.”

“We cannot expect some citizens to pay for others,” Romney wrote in an op-ed piece in the Boston Herald in June 2005.

That endorsement was crucial, according to people at the center of the state healthcare debate. “He became the first public official to publicly bless the mandate,” said the state’s Blue Cross Blue Shield Foundation president, Sarah Iselin, who worked on the healthcare overhaul.

At the same time, Romney backed the creation of a new regulated insurance marketplace in which state residents who did not receive health benefits from employers could shop for commercial health plans. Government subsidies were made available for those who could not afford insurance on their own.

This type of insurance exchange is also an integral part of the federal healthcare overhaul.

Romney’s team even used some of the same financing mechanisms on which the Obama administration and its congressional allies would later rely to expand coverage nationally.

With the blessing of the George W. Bush administration, Romney took federal aid that Massachusetts hospitals received to care for the uninsured and redirected the money to help poor state residents buy health insurance.

“It was Romney’s contribution to expand coverage using a private insurance framework, not a welfare framework,” said Thomas Glynn, former chief operating officer at Partners HealthCare, the state’s most influential hospital system. “He took a conservative idea and sold it to a liberal state.”

The law that Romney signed April 12, 2006, did not resolve all of the state’s healthcare issues. Emergency rooms have remained full. There are not enough primary care doctors. And hospitals that care for the poor are under strain.

There is still a debate about how comprehensive health plans should be. And small businesses, in particular, have seen little relief from rising premiums. Most critically, the state’s healthcare costs remain among the highest in the country.

Those shortcomings have fueled steady criticism from national conservatives, who derisively label the Massachusetts overhaul “RomneyCare” to parallel the “ObamaCare” epithet Republicans use for the federal law.

In his latest book, former Arkansas Gov. Mike Huckabee, a potential 2012 GOP presidential contender, said the people of Massachusetts had “participated in an experiment that blew up in their faces.”

Former Minnesota Gov. Tim Pawlenty, the first Republican to formally enter the race, last year said Massachusetts was not a model “I would want for the country to follow.”

In Massachusetts, that kind of criticism is harder to find. Popular support for the overhaul remains high, as does support among stakeholders like doctors.

“There’s a lot of pride that we did something that no other state has done,” said Dr. Alice Coombs, president of the Massachusetts Medical Society. “And physicians like the fact that they can focus on caring for patients, not worrying about who has insurance.”

And while state healthcare spending has surged as people lost their jobs in recent years, the law has not blown a hole in the state budget, according to a 2009 analysis by the fiscally conservative Massachusetts Taxpayers Foundation. The group concluded that out of a state budget of $30 billion, the coverage expansion added just $88 million a year to state spending over the first four years.

“The distortions are just amazing,” said Widmer of the taxpayers foundation. “It just hasn’t broken the bank. That’s a myth.”

Even business and insurance industry leaders now pushing for more aggressive steps to restrain costs say other factors — such as the economy and the power wielded by hospitals in Massachusetts — are the primary causes for surging insurance premiums.

“Double-digit rate increases have nothing to do with health reform,” said Richard Lord, president of Associated Industries of Massachusetts, the state’s largest business group.

Lord is among a group of state leaders, including Romney’s successor Gov. Deval Patrick, who are now turning to the more difficult task of taming rising healthcare spending.

That wouldn’t have been possible without the 2006 reforms that Romney championed, said Tim Gens, executive vice president of the Massachusetts Hospital Assn.

“People have more access to care now. That’s not just better for individuals.... It laid the groundwork for being able to reform the payment and delivery system,” he said. “Gov. Romney deserves credit for helping to get that ball rolling.”

noam.levey@latimes.com