Cover Story

The many Mitts

"The many Mitts" Continued...

Issue: "Focus on Mitt Romney," July 16, 2011

But the praise isn't unalloyed. National groups like the anti-tax Club for Growth and the libertarian Cato Institute note that Romney increased a slew of fees for permits, licenses, and government services. The 45 percent increase in fees captured some $330 million. The governor also closed what he called tax "loopholes" for corporations, costing large companies nearly $300 million during the first three years.

Gilmore called the loophole closures "tax increases" for businesses required to pay more money to the state. Tuerck said the policy was unhelpful to business, but he doesn't think it represents a major failure by Romney.

For Tuerck, a much bigger worry looms when assessing the governor's legacy and his presidential prospects: "The big alarm bell that keeps everyone awake at night is Romneycare."

Bells weren't ringing when Romney signed his famous healthcare legislation at Boston's historic Faneuil Hall in April 2006, but the atmosphere was festive: A fife and drum corps entertained 300 ticketed guests, and the crowd greeted a beaming Romney with a 30-second standing ovation.

On stage, the supporters surrounding the governor were as striking as the elaborate ceremony: Conservative Robert Moffit of the Heritage Foundation and liberal Democratic Sen. Ted Kennedy looked on as the governor signed the bill.

It was an unusual combination for an unusual bill. Romney hadn't pushed universal healthcare coverage during his run for governor, but the issue quickly surfaced: The state faced losing nearly $385 million in annual federal funds that Kennedy had secured for Massachusetts healthcare costs. The Bush administration warned Romney in 2004 that it would cut the money in 2005.

Romney and Kennedy-bitter rivals in the 1994 race for Massachusetts senator-convinced the administration to allow Massachusetts to keep the funds in exchange for a lofty plan: The state would achieve universal health coverage-something Kennedy longed to accomplish-while using the market-based solutions Romney supported.

Romney's plan was multi-layered: He took a large chunk of money the state gave hospitals to cover healthcare costs for the uninsured and created subsidies for low-income citizens to purchase healthcare for themselves. (The final legislation created the Commonwealth Care system that expanded subsidies to lower-income families ineligible for Medicaid.)

He also created a state health insurance exchange that would help individuals shop for healthcare coverage from a slate of private insurers. Another key piece of the plan: allowing individuals to purchase insurance using pre-tax dollars.

By January 2006, Romney was promoting his plan at a Heritage Foundation event in Washington, D.C. The group advised Romney's administration on the bill, especially encouraging the health insurance exchange and allowing individuals to use pre-tax dollars to purchase coverage. But the complex bill carried a major provision that's now an Achilles' heel in Romney's run for the presidency: a mandate to buy insurance.

The idea wasn't new or exclusively liberal: Romney followed some conservatives in arguing that taxpayers shouldn't have to cover emergency room costs for patients without insurance. Requiring individuals to purchase insurance was requiring them to be responsible, he argued.

A bigger sticking point was a different mandate: requiring employers to offer insurance to employees. Romney opposed the idea and vetoed the item before signing the bill. But the legislature, not surprisingly, overturned the veto, imposing fines on businesses with 11 or more full-time (or equivalent) employees.

Shortly after signing the legislation, Romney told The Boston Globe that the law would be a major part of his legacy as governor, but added: "I have no way of telling if it's going to be a help or a hindrance down the road."

Five years after Romney signed the bill, one reality is indisputable: Most Massachusetts citizens have insurance. But there's another indisputable reality: Massachusetts has the highest healthcare costs in the country.

Analysts say the reasons for high rates are complex, but most agree that the healthcare bill didn't include a substantial plan for containing costs. The legislation's focus on making healthcare accessible did little to make it affordable to families not receiving subsidies. Other problems: The legislature added requirements that weren't in the original bill, including higher standards for the minimum plan citizens must carry.

One of groups hit hardest by the legislation is the coalition that Romney had otherwise helped: small businesses. Hurst of the Retailers Association of Massachusetts says that the group's members have seen insurance premiums rise at least 15 percent each year.

That's a substantial cost to employers struggling in a weak economy. Some employers are opting to drop coverage and pay the relatively modest $295 fine per employee. That's particularly true of employers with workers earning up to 300 percent of the federal poverty level, since those workers are now eligible for state subsidies to help cover costs. (An individual making up to $32,508 is eligible for subsidies.)


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