Massachusetts Opens Healthcare Umbrella

The nation’s most comprehensive healthcare reform effort became law Wednesday as Gov. Mitt Romney signed a bill that would assure near-universal health insurance for Massachusetts residents.

The measure followed a year of negotiations between the Republican governor and the overwhelmingly Democratic state Legislature, and was swiftly heralded as a national model. Insurance providers and health experts also took part in deliberations that will require all state residents to purchase health insurance by July 2007.

“An achievement like this comes around once in a generation, and it proves that government can work when people of both parties reach across the aisle for the common good,” Romney said Wednesday as he signed the bill in a ceremony at historic Faneuil Hall.

“Today,” the governor said, “Massachusetts is leading the way with health insurance for everyone, without a government takeover and without raising taxes.”

But Romney exercised his line-item veto power to overturn eight portions of the bill, including a $295-per-worker assessment on businesses that was seen as essential to the bill.

Some critics described the fee as a tax on business, and in call-in radio shows over the weekend many small-business owners told the governor that the assessment was a burden. In vetoing the provision, Romney said the fee was “not necessary to implement or finance healthcare reform.”

The governor also vetoed a section of the bill that would have extended dental benefits to adult Medicaid recipients, at an annual cost of $75 million.

Legislative leaders have vowed to override Romney’s vetoes.

The law targets more than a half-million state residents who have no health insurance. Using a sliding scale, low-income residents will be able to obtain health insurance at greatly reduced costs -- and in some cases, at no cost.

State residents who can afford private insurance will face tax penalties if they do not obtain coverage.

The law spreads costs and administrative responsibilities among citizens, employers and the government. But one incentive for drafting the legislation was a brief window in federal funding that would provide $385 million in annual subsidies if the state could reduce its uninsured population.

Private insurance companies will be eligible for government subsidies to increase coverage for children and the working poor.

The measure also creates a health insurance “connector” to link businesses and individuals with insurance providers.

The bill is expected to cost $316 million the first year, rising to more than $1 billion by the third year. Much of the money will come from federal reimbursements and existing state spending.

The near-universal health insurance bill is considered a coup for Romney, who is not seeking reelection, but who is likely to seek the Republican presidential nomination in 2008. States across the country are closely watching the Massachusetts model to see if the bold attempt at reform will work.

Sen. Edward M. Kennedy, a frequent Romney critic, stood beside the governor Wednesday to praise his state for devising the country’s most inclusive health insurance program.

“With the signing of this landmark health reform bill, after so many years of false starts, our actions have finally matched our words and we have lived up to our ideals,” Kennedy said. “You have given Massachusetts just what the doctor ordered.”

It was the first time the two men had shared a stage at Faneuil Hall since Romney unsuccessfully tried to unseat Kennedy in 1994. The governor, for his part, used the occasion to quip: “Having Sen. Kennedy and me together on the same stage and behind the same piece of landmark legislation will help slow global warming -- because hell has frozen over.”