Mitt Romney, governor of Massachusetts, unveiled a plan to try to insure the state's 500,000 estimated uninsured. His presentation of the plan can be found in the Boston Herald. Notable within the plan is the set up of two additional state-provided health coverage options, Safety Net Care for those slightly above the Medicaid income limits, and Commonwealth Care for those even further above the limits. Both of these latter two options arrange for the state to subsidize the premiums to a degree for private lower cost insurance, i.e. HMO.
It is laudable that Gov. Romney is a) making an attempt to cover the uninsured, especially with a private-based system, and b) attempting to do so without a job-killing, economy-stifling tax increase. Both the Herald and the Globe found space on their editorial pages today to praise Romney for this, and particularly in the case of the Globe that has me worried.
The Herald editorial:
There is little not to like about Gov. Mitt Romney's newest variation on health care reform. It basically amounts to this: Everyone gets covered by some form of health insurance - Medicaid for the very poor, a subsidized plan for low income residents, and a more reasonably-priced policy for low-middle income people whose employers do not offer coverage. ...
"With Medicaid once you're over a certain income level, you're dropped. With Safety New Care, you get less of a subsidy, but you don't fall off the cliff.'"
In other words, it provides yet another incentive to work.
The Herald quotes the governor in saying that it won't cost any additional money to do this, with the money coming from the state's current uninsured fund. The Globe adds this caveat, however:
The Urban Institute, a respected Washington think tank, came to much the same conclusion in a report commissioned by the foundation. The institute found that the mandate, perhaps in conjunction with some sanctions on employers, offered the most comprehensive approach to coverage.
Unlike Romney, who did not foresee the need for new revenue, the institute figured that it would cost an extra $1.2 billion for a comprehensive approach.
They also see a tax increase coming. This whole debate and approach is interesting, when compared to the failed TennCare, Tennessee's expansion of Medicaid that is undergoing re-organization. I can't add much to this great post by RangelMD on TennCare's financial and structural woes. Please read the whole thing, including the comments which are worth a look in themselves, but here's a snippet.
In the last few years Tenncare has come full circle from an ambitious social health program seeking to try and cover all the state's uninsured to an embattled mess with plans to cut hundreds of thousands from its rolls, sharply cut back on covered services, and impose restrictions and co-pays. In short, Tenncare is starting to look like the old 1994 Medicaid system again...
There are several points to make. First, the current uninsured fund does little to help out the physicians providing the care. Payments go to hospitals where the care is provided, not to the MD's. We have to fend for ourselves.
Second, the saying goes that those who ignore history are doomed to repeat it. Let's hope that Gov. Romney and his team in Boston have done their homework on TennCare and don't fall into the same false assumptions and traps.
Third, the state of Massachusetts ... no, wait, that's too limited ... America needs to understand one fact about the finances of medicine fully and completely. If all insurers paid Medicare or Medicaid rates there would be a lot of physicians going out of business. That's why many doctors don't take Medicare and Medicaid, including some of the most high profile ones in the biggest centers. The state is now making the pool of people with that level of payment even larger.
Well, I hear you say, at least you're getting paid something for providing care for this population. Yes, but that "something" isn't enought to keep the business going, and there's an "opportunity cost" - the lost patient with better coverage who you couldn't see. We usually work out a payment plan with our uninsured that requires a minimal payment, $5 or $10 per month, toward a reduced fee. In the end we at times do better than the government payors, and the patient has received the care and paid in a way that does little to their finances.
That fact, that many doctors in Massachusetts would be going out of business at government payment rates, is something that should be remembered every time the subject of Medicare and Medicaid rate cuts comes up. Our office finds that we can be viable with a certain percentage of Medicare and Medicaid in the payor mix. As that percentage creeps up, our margin drops, and we feel the pinch. Cut those rates more and the percentage that causes a problem is even lower.
HMO's are another problem, and Romney's plan calls for HMO payment levels with the premiums subsidized by the state. HMOs base their payment rates quite often on the government payors. They tend to be a little higher, but not all that much so. But if the government cuts their rates, the HMOs often cut theirs, keeping at their same 15% or 20% above Medicare, whatever their number. The vast majority of patients in Massachusetts who are not under Medicare and Medicaid are under low paying HMOs.
So Gov. Romney has succeeded in getting praise from the Globe for his health care initiative, trying to cover the state's uninsured. I hope he realizes the financial effect this may have on the physician practices in the state. I hope he realizes the problems that TennCare had, and doesn't repeat them, either busting the budget or forcing a huge tax increase. That latter point may be why the Globe is so complimentary. They love tax increases.
UPDATE: Submitted to Wizbang's COTT xvii
Romney has many great plans for health insurance. I sure do like what he has done and hope he can improve for the future.
Posted by: Blue Cross of California | Nov 23, 2005 at 02:20 AM