Governor Mitt Romney has taken credit for the new Massachusetts approach to universal health coverage, even as he tries to gut its boldest feature, making free-riding businesses with no health coverage pay a modest fee. If Romney is replaced this November by a Democrat, will his successor do better?
How to make the system work should be a major issue in the gubernatorial campaign. Many key details have been left to regulations to be written by the next governor. A new institution, the Connector, was created to streamline insurance markets and make insurance more affordable to small employers. But this concept remains to be tested.
A key question is whether the roughly $1.3 billion cobbled together from Medicaid, the free care pool, and new state revenues will be sufficient to meet promises. The new law is supposed to provide good insurance to everyone in poverty, and offer the same coverage to everyone with incomes up to three times the poverty level if they pay a modest premium to buy in.
But if the money isn't adequate, the risk is that costs will be shifted to individuals through higher out-of-pocket payments and unaffordable premiums. More people will nominally get insurance, but not necessarily good care. Others won't be able to afford insurance at all.
John McDonough, the former legislator who heads Health Care for All, figures that an affordable premium for moderate-income citizens is about $100 to $200 a month. But what if the public funds are insufficient to permit that?
The three declared Democratic candidates for governor are placing great hopes on a black box called ''cost containment." Two of the three, Deval Patrick and Chris Gabrieli, might accept higher charges on business as a last resort. Attorney General Tom Reilly would resist higher business taxes in all circumstances.
Patrick began by staking out the boldest position. Last fall, he supported the original bill proposed by the ACT (Affordable Healthcare Today) coalition and Health Care for All. That bill would have spent more public money and extended subsidized coverage further up the income ladder to four times the poverty line (about $63,000 for a family of three). It would have taxed businesses that failed to provide coverage at 5 to 7 percent of payroll, less than the actual cost of good insurance, but far more than the $295 per worker, per year in the final health bill.
Today, Patrick hedges. ''The ACT bill was a good starting point," he says. ''But I don't want to look at raising more revenue until we see how this works and what costs we can take out."
Gabrieli, a late entrant to the Democratic field, says he likes the concept of having individuals, government, and businesses share costs. Of these three groups, he says, businesses that provide no insurance are getting off too lightly with just $295 per employee, per year.
''Decent insurance," he says, ''costs $325 or $350 a month. A fee of just $295 a year is less than one-12th of that. Most businesses, especially large businesses, can afford to do more." On the other hand, Gabrieli expresses concern that payroll taxes could cause some employers to drop their existing insurance plans. He, too, places great hopes in ''containing costs."
Reilly told a Greater Boston Chamber of Commerce meeting in January that he would flatly oppose any business charges higher than the $295 per worker, per year in the new law. According to his campaign office, Reilly hopes that the plan will economize on health insurance by -- guess what? -- ''containing costs."
Here's the rub. Containing costs paid by insurers or employers often turns out to mean limiting coverage or raising out-of-pocket charges. That's not containing costs, only shifting them.
Universal coverage saves costs by stressing preventive care and getting people out of expensive emergency rooms and into doctors' clinics with scheduled appointments. The plan, if adequately funded, will achieve that. But the biggest inefficiency is having private insurers as middlemen. Dare we say that out loud?
Democrats, even liberal ones, are gun-shy about being labeled tax-and-spend, even when public solutions are far more efficient and fair than private ones. And even in ''blue" Massachusetts, business has disproportionate leverage over what a Democrat can prudently say in a campaign, much less legislate.
We are still waiting for an outbreak of Democratic leadership in Washington. Let's see if it happens in Massachusetts.
Robert Kuttner is co-editor of The American Prospect.