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Could a VP Romney Be Health-Care Tsar?

A Commentary by Froma Harrop

Thursday, July 31, 2008

We who obsess over universal health coverage may soon confront a startling development: The only candidate on a major-party presidential ticket to have proposed and implemented a universal plan could well be a Republican. I speak of former Massachusetts Gov. Mitt Romney, now high on the list of John McCain's possible running mates.

McCain's own health proposal merely tinkers around an expensive, inefficient wreck. It relies mainly on tax credits to help people buy private coverage -- and neglects to say where the money will come from. Letting Romney take over this issue could appeal to moderates who regard Republicans as the guardians of a crazy status quo.

In the year since Romney helped launch the Massachusetts health plan, the following has happened: The number of uninsured has fallen by 340,000 people, half the total; out-of-pocket costs have dropped significantly; and the benefits are better. With 93 percent of Massachusetts residents now insured, the plan approaches universal nirvana.

There have been glitches, the main one being that the plan will cost $129 million more than projected. That sounds like a lot of money, but bingo, the state could save $160 million simply by enrolling all its Medicaid members in managed care plans. Shortfall averted with $30 million left over.

Do the experts consider the Massachusetts plan a success? "Absolutely, to have these kinds of accomplishments the first year," Rachel Nuzom, senior policy director at the Commonwealth Fund, a health-care think tank, tells me. She notes that despite the unforeseen costs, Massachusetts residents favor the plan by three to one, with support widespread among the old and young, rich and poor.

The right wing has been beating up Romney over the reforms, which he designed in cooperation with a Democratic legislature. The achievement threatens the conservative myth that government can't organize a health-care system that the public will like. Mindful of the attacks, Romney emphasizes his plan's reliance on private insurers.

And so far, there's been no evidence of "crowding out" -- that is, employers dropping coverage and sending their workers to the state program. Romney notes that Massachusetts is the only state where the number of people buying insurance through their employer actually rose last year.

How does the Massachusetts plan work? Families with low or modest incomes can find subsidized coverage through the Commonwealth Care program. Others go to the "Connector" to buy private insurance at lower rates and with pretax dollars. The plan is funded by hospitals, insurers, employers, federal and state taxpayers, and the consumers themselves.

The guts in the Massachusetts plan is the mandate: Everyone must get coverage. Those who don't, pay a penalty. The uninsured holdouts tend to be young, male and in good to excellent health. They figure that if something goes wrong, they can report to the emergency room where they'll get free care. Such people are called "free riders."

Obama proposes subsidies to help businesses and individuals buy public or private coverage, and he responsibly specifies a source for funding -- higher taxes on the upper incomes. But he ignores the free-rider problem.

"A lot of the pieces (in the Obama plan) are encouraging," Nuzom says. "But to get to a high-performance health care system, you need universal coverage. It's pretty difficult to get there without a mandate."

Massachusetts Sen. Edward Kennedy is now coordinating a bipartisan push for universal coverage in the next administration -- perhaps his last hurrah. His advisers believe that the Massachusetts reforms could provide a basis for a national program.

As a vice presidential candidate, Romney could help deliver Michigan to McCain, but even better, he could help deliver a rational health-care policy. McCain needs that just as much.

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