There are distinct similarities between Massachusetts' health care legislation and the Patient Protection and Affordable Care Act (ACA).
The Massachusetts health care legislation, signed into law by then-Governor Mitt Romney in 2006 when he was governor, became a contentious issue in the 2012 presidential election. Conservative critics claim that Romney’s health care law was the blueprint for President Obama’s sweeping health care reform bill, what opponents like to call “Obamacare.” As the Republican candidate for presidential, Romney vowed if elected he would “repeal Obamacare on day one.” His campaign website further articulated his belief that, “President Obama’s costly takeover of the health care system imposes an enormous and unaffordable obligation on the federal government while intervening in a matter that should be left to the states.”
Massachusetts’ health care legislation took a three-pronged approach to reform: first, the law mandated that every individual purchase health insurance coverage; next, the state used the money it saved on payments for the care of the uninsured to subsidize private insurance for uninsured lower-income individuals; last, the state created an online marketplace—the Commonwealth Health Insurance Connector Authority— in which individuals could purchase commercial health insurance coverage in order to meet the mandate requirement. President Obama’s ACA includes all three of these components.
Romney’s critics like to point out these parallels, and many health policy experts involved in the legislation also see myriad similarities. For example, Jonathan Gruber, an economist at MIT who was one of Romney’s key advisors and one of the primary architects of the Massachusetts health plan states, “The basic structure of the insurance-related aspects of this (ACA) legislation follows the reform enacted by the Commonwealth of Massachusetts in April 2006.” John McDonough, a former Democratic state lawmaker who worked on the state law and helped write the federal law for the Senate health committee, also believes that, "Massachusetts was the model for the federal Affordable Care Act.... It is the cornerstone of the healthcare overhaul.”
However, Romney denies claims that the laws are similar and instead emphasizes the differences between the two reforms, namely that President Obama’s legislation raises taxes and is federal law, which he says encroaches on states’ rights and individuals’ freedoms. Romney has stated that he believes that, “States are where healthcare programs for the uninsured should be crafted.” And has described “Obamacare” as, “a government takeover of health care,” while attempting to differentiate and defend his plan as, “a state solution to a state problem.” Nevertheless, given the noticeable similarities between the two plans, it is difficult to decipher how much of the health care debate is about policy and how much is about politics.
The Massachusetts Health Care Reform Plan
To understand both Massachusetts’ health care reform and the ACA, it is useful to look at each policy component, the arguments for and against each element and how these reforms fit together.
As of 2007, all adult citizens in Massachusetts were required to purchase health insurance. Advocates of the insurance mandate argue that, “It is necessary to get everyone in the insurance pool, eliminate risk selection, and relieve providers of uncompensated care costs before delivery system reform will be possible. At the heart of this approach is the notion that covering everyone will eliminate the ‘free rider’ problem and bring down health insurance costs for others who were paying the health care bills of the uninsured.” For example, in Massachusetts, and undoubtedly elsewhere, the uninsured were using the emergency room for primary care, an extremely costly service, and the state was then paying the bill. By requiring all citizens to enroll in health insurance, Romney sought to ensure that those citizens who had purchased insurance were not stuck with the expensive health care bills of those who had not, writing in an op-ed piece in the Boston Herald in 2005 that, “We cannot expect some citizens to pay for others.”
The money saved by the state from implementing the individual healthcare mandate was used to subsidize private insurance for lower-income families (up to 3 times the poverty line in Massachusetts and up to 4 times the poverty line in the ACA). In crafting both the Massachusetts legislation and the ACA, it was argued that the mandate was necessary in order to save money on payments on behalf of the uninsured, so that subsidies could be made available to families to make health insurance affordable. This policy design has largely accepted among politicians, as subsidies are now a pillar in the conversation on Medicare reform and “Premium Support” payments.
As the third component of the health care reform the state of Massachusetts created an easy to understand health insurance exchange, called the Commonwealth Health Insurance Connector Authority where uninsured individuals can purchase non-group coverage. Governor Romney’s intention in creating this insurance exchange was to shift the responsibility for purchasing insurance to individuals, rather than employers. Thus, the insurance exchange was necessary in order to make purchasing an individual insurance plan more straightforward and accessible.
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