NCPA - National Center for Policy Analysis


May 23, 2008

In the wake of former Massachusetts governor Mitt Romney's "universal" health-care reform, about 350,000 more people are now insured in the Bay State since the reform passed, says the Wall Street Journal.

But that decrease was not secured through the market reforms that Gov. Romney promised.  Instead, Massachusetts created a new state entitlement that is already trembling on the verge of bankruptcy inside of a year, says the Journal:

  • Some two-thirds of the growth in coverage owes to a low- or no-cost public insurance option.
  • Called Commonwealth Care, it uses a sliding income scale to subsidize coverage for everyone under 300 percent of the federal poverty level, or about $63,000 for a family of four.
  • Commonwealth Care also accounts for 60 percent of statewide growth in individual insurance over the last year, and the trend is expected to accelerate, perhaps double.

One lesson here is that while pledging "universal" coverage is easy, the harder problem is paying for it:

  • This year's appropriation for Commonwealth Care was $472 million, but officials have asked for an add-on that will bring it to $625 million.
  • For 2009, Governor Deval Patrick requested $869 million but has already conceded that even that huge figure is too low.
  • In addition, over the coming decade, the expected overruns float in as much as $4 billion over budget.

Hailed at first as a new national model, the Massachusetts nonmiracle ought to be a warning to Washington, says the Journal.  Barack Obama and Hillary Clinton are both proposing versions of RomneyCare on a national scale, with similar promises that covering everyone under a government plan will reduce costs.  Obama at least argues that more people would be covered were insurance more affordable.  But his solution is Massachusetts on steroids -- make insurance less expensive for policyholders by transferring the extra costs onto the government.  Clinton likes that but also wants the individual mandate, despite the mediocre results so far.

Source: Editorial, "The New Big Dig," Wall Street Journal, May 21, 2008.

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