CLT
UPDATE
Friday, April 7, 2006
"Big Dig" comes to Mass.
healthcare
When Governor Mitt Romney dramatically proposed a
universal health insurance plan a year ago, a key element was providing
low-cost, pared-down coverage for about $200 a month.
But in the end, legislators were unwilling to adopt some of the measures
that the governor and insurers had counted on to lower premiums, and
lawmakers and an insurance executive said in interviews yesterday that
they expect average premiums under the bill passed this week will be
about $325 a month for individuals and as much as twice that for
families....
But the amount of those subsidies has not been determined, and the
higher the premiums of health plans, the more the state will have to
chip in to keep plans affordable....
The individual mandate to buy health insurance only applies if the
Commonwealth Health Insurance Connector determines the proposed plans
are affordable. Over the next year, this group will define what level of
premiums are affordable for the uninsured.
"We have no idea what affordable means right now," said Jonathan Gruber,
an MIT economist who advised the governor and the House of
Representatives on health reform.
The Boston Globe
Thursday, April 6, 2006
Health bill premiums may exceed predictions
Ability of some to pay at issue
Romney, as he has sought to raise his national profile, has
chided GOP leaders in Washington for veering from the bedrock party principle of
limited government. Critics say Romney's signature contribution to the
healthcare plan -- a provision requiring all residents to carry health insurance
or face financial penalties from the state -- will only cast him as one of those
big-government Republicans....
Romney, who considers the healthcare initiative one of his major accomplishments
as governor, is sensitive to such criticism and has been careful to couch the
bill in Republican-friendly terms. He made sure at a Monday press conference to
say the plan was "market-based" and endorsed "personal responsibility." ...
Herzlinger said Romney will also have difficulty defending the requirement that
individuals have health insurance and a proposed $295-per-employee charge on
businesses that don't provide health insurance to employees.
Romney said this week he didn't see the charge as a tax.
Others do. Norquist and antitax crusader Barbara Anderson have both
criticized the plan....
Norquist said yesterday he could accept the new $295 assessment if the state
repealed an existing $62-per-employee fee that companies that offer insurance
pay into the state's pool for the uninsured.
The Boston Globe
Thursday, April 6, 2006
On national stage,
potential gains and pitfalls for Romney
Chip Ford's CLT Commentary
Okay, first we've got to get past why government must
provide health care as "an entitlement" in the first place. Gaining
that, we move on to how best to pay for what we as taxpayers are
providing.
This vague 145-page or so legislation leaves much up
to regulatory agencies, at least one newly created, to enforce.
Wonderful.
What do we know?
Well, in just 48 hours the cost for individual
insurance has increased from an intended "$200" to $325. (Remember
when I recently said, "The devil, after all, is always in
the details.")
The state will still penalize those employers who
do provide healthcare insurance to their employees, $62-each for
doing so.
And as we in greater-Boston certainly should have
learned, the
Robert Moses philosophy of government spending again confronts us:
First dig the hole; then worry about filling it in someday.
"To Moses' critics, however, he will always be
remembered for believing that . . . 'if the ends don't justify the
means, what does?'"
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Chip Ford |
The Boston Globe
Thursday, April 6, 2006
Health bill premiums may exceed predictions
Ability of some to pay at issue
By Liz Kowalczyk, Globe Staff
When Governor Mitt Romney dramatically proposed a universal health
insurance plan a year ago, a key element was providing low-cost,
pared-down coverage for about $200 a month.
But in the end, legislators were unwilling to adopt some of the measures
that the governor and insurers had counted on to lower premiums, and
lawmakers and an insurance executive said in interviews yesterday that
they expect average premiums under the bill passed this week will be
about $325 a month for individuals and as much as twice that for
families.
The landmark healthcare legislation, which is the first of its kind in
the country, requires individuals who don't qualify for the state
Medicaid program or for insurance through their jobs to buy low-cost
private plans.
The state will pay the entire premium for individuals and families who
earn less than 100 percent of the poverty level and will subsidize
premiums for those who earn between 100 and 300 percent of the federal
poverty level; 300 percent is about $30,000 for a single person and
$50,000 for a family of three.
But the amount of those subsidies has not been determined, and the
higher the premiums of health plans, the more the state will have to
chip in to keep plans affordable.
Uninsured residents with incomes over 300 percent of the poverty level,
about 200,000 people, will be on their own to pay the full cost.
A major question is whether this group will be able to afford coverage.
"That is unknown," said John McDonough, executive director of Health
Care for All, an advocacy group based in Boston. "We're still waiting
for someone to show us what a plan would look like. Show us the money."
In the legislation, lawmakers did not allow for very-high-deductible
plans or for plans that drastically limit benefits such as mental health
care and infertility treatments, approaches that would have cut premiums
further.
"We wanted to make sure the insurance policies are of high quality,"
said Representative Patricia A. Walrath, a Stow Democrat and
cochairwoman of the Joint Committee on Health Care Financing. "We didn't
want people to be in health insurance plans that don't really provide
health insurance."
Still, even at the higher cost, premiums will be affordable for the vast
majority of uninsured single people and families and will be below
current market rates, Walrath said.
On its website, Blue Cross and Blue Shield of Massachusetts, for
example, lists two basic plans for a single person in his or her 40s
living in Boston, both of which cost in the $400-a-month range. Neither
includes coverage for prescription drugs, however.
Legislators said they were able to bring premiums below market rates by
combining the small-group and individual insurance markets, which are
now separate, and by allowing individuals to pay for premiums with
pretax dollars.
Timothy Murphy, Romney's secretary of health and human services,
acknowledged that some of the assumptions of the Romney approach had
been dropped in the final bill, but disagreed that premiums will be as
high as $325. He said it is too early to say what they will be, because
insurers have not yet proposed specific plans.
"I believe that the insurance companies within the state can develop
affordable products and that people who earn more than 300 percent of
the poverty level will be able to buy these products," he said.
James Roosevelt Jr., chief executive of Tufts Health Plan, said that
insurers would have been able to push down premiums further if the
Legislature had agreed to pay for reinsurance, essentially a separate
insurance policy that would have covered catastrophic costs for
individuals in the plans, and had allowed insurers to develop plans with
limited benefits.
The legislation does not allow health plans to charge deductibles to
individuals and families who are below 300 percent of the poverty level.
For people with incomes above 300 percent, it does allow plans with
deductibles similar to those currently on the market, a maximum of
$2,100 for individuals and $4,000 for families enrolled in HM0s.
"As it came out there is not a lot of flexibility on benefits in this
bill," Roosevelt said. "There aren't things that leap out at you, where
you say we can do this in a low-cost plan."
But he said Tufts won't know exactly how much the plans will cost until
the insurer has thoroughly reviewed the legislation and developed
insurance models. Blue Cross-Blue Shield and Harvard Pilgrim Health
Care, two other large insurers, would not comment yesterday, saying they
were still reviewing the new legislation. But based on conversations
with insurers, legislators developed the $325 figure.
The reform legislation does allow one major area of flexibility for
insurers: They will be able to propose health plans with more restricted
networks of hospitals and doctors than currently exist, including plans
that include mostly community hospitals or community health centers,
where costs are generally lower than at large teaching hospitals.
And, lawmakers said the legislation will provide extremely inexpensive
plans costing about $150 a month for one group of uninsured residents:
19- to 26-year-olds who cannot buy health insurance through their jobs.
The Division of Insurance will decide what benefits those plans must
include, but legislators expect they will have limited benefits.
A new entity called the Commonwealth Health Insurance Connector, which
will operate as an authority under the Department of Administration and
Finance and will be overseen by a board of private and public members,
will oversee the low-cost plans. Health insurers will propose their
plans to the group, which will decide if they meet quality and
affordability standards.
The individual mandate to buy health insurance only applies if the
Commonwealth Health Insurance Connector determines the proposed plans
are affordable. Over the next year, this group will define what level of
premiums are affordable for the uninsured.
"We have no idea what affordable means right now," said Jonathan Gruber,
an MIT economist who advised the governor and the House of
Representatives on health reform. "This is a great piece of legislation.
I don't want that to get lost. But it does leave some things uncertain."
Michael Bonner, 37, a professional musician from Somerville who said he
earns in the $50,000 to $60,000 range, said he could afford a premium of
$325 a month. He's been uninsured for more than three years, partly
because it's expensive.
He said he probably will qualify for health insurance at his part-time
teaching job at the Longy School of Music in Cambridge next year, which
will cost him close to $300. Under the law, he will be required to
purchase that insurance.
"I sort of put it out of my mind, the worry that comes with not being
insured," he said. "This encourages me to resolve things for myself. I
think it would be a relief."
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The Boston Globe
Thursday, April 6, 2006
On national stage,
potential gains and pitfalls for Romney
By Scott Helman, Globe Staff
The first-of-its-kind healthcare plan passed by the Legislature provides
Governor Mitt Romney valuable political capital, but it is also fraught
with potential perils as he aims to make the top tier of Republican
presidential contenders.
Romney is facing criticism from some conservatives that the bill he
helped engineer would expand government and impose a new financial
burden on businesses. The plan has already come under attack from the
libertarian Cato Institute in Washington, D.C., the op-ed columns of the
Wall Street Journal, antitax activists such as Grover Norquist, and
MSNBC pundit Tucker Carlson.
Romney, as he has sought to raise his national profile, has chided GOP
leaders in Washington for veering from the bedrock party principle of
limited government. Critics say Romney's signature contribution to the
healthcare plan -- a provision requiring all residents to carry health
insurance or face financial penalties from the state -- will only cast
him as one of those big-government Republicans.
"I think that this bill pretty well locks Romney, no matter what else he
does, into that realm," said Michael Tanner, director of health and
welfare studies at the Cato Institute. "I do see him being attacked from
people who see this as being government paternalism or big government."
Romney, who considers the healthcare initiative one of his major
accomplishments as governor, is sensitive to such criticism and has been
careful to couch the bill in Republican-friendly terms. He made sure at
a Monday press conference to say the plan was "market-based" and
endorsed "personal responsibility."
Romney has seized on the issue to tout his ability to work with
Democrats on a solution that has eluded Washington politicians, notably
potential 2008 rival Hillary Clinton, the Democratic senator from New
York.
The governor often refers derisively to Clinton's failed bid for
universal coverage in the 1990s as "Hillarycare," but Clinton praised
Romney's efforts yesterday, telling the Associated Press, "To come up
with a bipartisan plan in this polarized environment is commendable."
Julie Teer, political director for Romney's political action committee,
said in an e-mail: "The governor took a Democrat ideal -- getting
everyone health insurance -- and applied conservative Republican
free-market principles to achieving it."
The state's healthcare plan and his role in crafting it were featured
prominently on the national airwaves yesterday, and the issue was the
top story in yesterday's Wall Street Journal, Washington Post, and New
York Times. It was also the first question reporters asked of White
House press secretary Scott McClellan aboard Air Force One yesterday
morning.
"I think it's another example of how the states are really the
laboratories of democracy in our federalist system," McClellan
responded.
Some observers expect Romney to be able to showcase the healthcare plan
as an example of why governors make better presidential contenders than
senators.
"I think that there's a lot more upside in the bill than there is
downside for him," said Tom Rath, a Republican National Committee member
from New Hampshire.
"Certainly, someone could play it as, this is another big-government
Massachusetts plan," added Dante Scala, associate professor of politics
at Saint Anselm College in Manchester, N.H. "But depending on how well
Romney can defend the plan, I think it could have a good effect."
But as the governor looks to sign the healthcare bill next week and
begin celebrating it on the campaign trail, he will have to answer to
conservative critics on several points, including a component of the
plan that calls for a new state entity to regulate healthcare, said
Regina Herzlinger, a Harvard Business School professor and senior fellow
at the conservative Manhattan Institute.
"Sooner or later that's going to come out, and those red-blooded
free-market people are going to say, 'Who appointed you king of the
world?' " said Herzlinger, who said she applauds Romney for his efforts.
Herzlinger said Romney will also have difficulty defending the
requirement that individuals have health insurance and a proposed
$295-per-employee charge on businesses that don't provide health
insurance to employees.
Romney said this week he didn't see the charge as a tax.
Others do. Norquist and antitax crusader Barbara Anderson have
both criticized the plan.
Romney has the power to veto or suggest changes to any portion of the
bill, and he met with business leaders yesterday to hear their views on
the legislation. A spokesman said the governor was likely to seek
modifications on the business assessment.
Norquist said yesterday he could accept the new $295 assessment if the
state repealed an existing $62-per-employee fee that companies that
offer insurance pay into the state's pool for the uninsured.
Other conservative groups and commentators have come out in support of
the plan. The Heritage Foundation in Washington D.C. helped write part
of the bill, and syndicated radio talk show host Hugh Hewitt, who is
close to Romney, said on his website: "The Romney campaign just took a
big jump forward."
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