ObamaCare, son of RomneyCare

What is RomneyCare?

On April 12, 2006, then–Massachusetts Gov. Mitt Romney signed into law the Act Providing Access to Affordable, Quality, Accountable Health Care. That name was too unwieldy, so the bill was nicknamed "RomneyCare." The law aimed to fix a big problem: Health-care coverage in the state was becoming increasingly unaffordable, in part because of past botched government reforms. In 1996, the state ordered insurance companies to accept all customers with pre-existing conditions. That allowed individuals to stay uninsured until they were ill, depriving insurance companies of the healthy customers they need to subsidize the sick. Premiums spiked, people dropped their costly policies, and Massachusetts's uninsured rate — which was around 7 percent in the early 1990s — climbed into double digits. To stop the rapid rise of premiums, Democrats and Republicans came together to develop RomneyCare, which would eventually serve as the model for President Obama's Affordable Care Act. "What's happened in Massachusetts is a good reflection of what's ahead nationally," said Kosali Simon, a health economist at Indiana University.

How are the plans alike?

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Both laws force insurers to accept customers with pre-existing conditions, offer government subsidies to low earners who buy insurance, and extend Medicaid coverage to poor people who can't afford subsidized insurance. Each law also uses an "individual mandate" that requires all adults to have coverage or pay a fine — now up to $1,272 in Massachusetts — to prevent "free riders" on the health-care system and ensure there are enough healthy people in the insurance pool. "Folks, if you can afford health care, then, gosh, you'd better go get it," Romney said in 2006.

How was RomneyCare's rollout?

It was a mess. The Massachusetts Health Connector, a prototype of the troubled federal insurance exchange, HealthCare.gov, was initially overwhelmed by the flood of people who tried to register, and consumers faced months of delays in everything from submitting an application to getting coverage. But the kinks were ironed out, and shortly after the July 1, 2007, deadline for getting coverage, 105,000 people had signed up for insurance — 21,000 more than projected. "One of the clear lessons of the Massachusetts experience is that people want affordable health insurance," said Glen Shor, the Connector's former director and now the state's finance secretary. Today about 98 percent of Bay Staters have coverage, the highest rate in the U.S. A 2012 poll found that 62 percent support the law, while 33 disapprove of it.

How has it affected costs?

The record there is mixed. The price of a nongroup plan rose about 14 percent nationwide between 2006 and 2009, but on Massachusetts's insurance marketplace, it fell 40 percent. The cost of an employer-sponsored plan has continued to rise in the Bay State, but at a slower rate than the national average. But critics argue that those figures don't tell the whole story, and that taxpayers are footing the bill for the 439,000 people who've acquired insurance since 2006. The Wall Street Journal noted in a recent editorial that health care accounted for 41 percent of Massachusetts's 2013 budget, up from 25 percent in 2006. Those costs have forced the state to seek new revenues, and in 2009 it raised the cigarette tax by $1 a pack. "The lesson for voters is that universal health care is going to have universally large costs," said the Journal. "The middle class will pay the bill, as they are starting to do in Massachusetts."

Is RomneyCare a burden for the state?

"There's a lot of wild accusations that the law is breaking the bank," said Michael Widmer, president of the fiscally conservative Massachusetts Taxpayers Foundation, "and that is simply not the case." A study by his organization found that additional spending attributable to the reform accounted for only 1.4 percent of the commonwealth's $32 billion budget in 2011. Obama's law also raises some taxes, but unlike RomneyCare, aims to pay for the additional insured by cutting health costs in several ways. The way hospitals and doctors are paid is being changed, for example, so that they'll receive a set payment for, say, removing an appendix. That fixed payment removes incentives for ordering unnecessary tests or treatments, and encourages providers to make sure patients aren't readmitted because of poor care or infections.

Will ObamaCare's experience be the same?

Not necessarily. The Massachusetts experiment does suggest that the uninsured will eventually sign up in large numbers. But since all major government programs create unforeseen consequences, Massachusetts's Democrat-dominated state legislature has approved three technical corrections to RomneyCare since the law passed. ObamaCare will also need fixing, especially since a nationwide health-care system is far more complicated than a single state's. Rick Lord, president of Associated Industries of Massachusetts, a business group, is pretty sure no tweaks to ObamaCare will get through Congress, where many Republicans want ObamaCare to fail. "I'm feeling a little pessimistic about how it's going to play out in Washington," Lord said.

Getting preventive care

It's too early to tell if RomneyCare has made Massachusetts a healthier place. There are no studies showing, for instance, whether residents are now living longer. But supporters of the law note that as coverage expanded, more people sought out preventive care — such as diabetes tests, cancer scans, and smoking-cessation programs, which have helped 150,000 residents quit since 2006. "I have seen a ton of new patients, all of whom were pretty sick or were going to be sick," said Richard Dupee, an internist at Boston's Tufts Medical Center. "And now it's all controlled." By tackling health problems early, rather than waiting until patients turn up at emergency rooms with serious and costly illnesses that they can't pay for, the state could already be saving money. One Yale University study found that between 2004 and 2008 there was a 2.7 percent decrease in the number of hospital patients admitted for preventable conditions, such as advanced diabetes that leads to foot and leg amputations.