Critics say law doesn’t fit in California

The San Diego Union-Tribune

Lawmakers in California and other states who are grappling with health insurance reform should model their efforts after a new Massachusetts law that requires everyone in the state to obtain medical insurance by July 2007, Massachusetts Gov. Mitt Romney said yesterday in San Diego.

“People always ask me, ‘How much of this can be applied in our state?’ Well, I don’t have a precise answer to that, but a good portion can,” Romney told a gathering of health insurance managers at the San Diego Convention Center.

Measures containing portions of the Massachusetts law have been proposed in California but have either failed to become law or were rejected by voters. In recent days, however, Gov. Arnold Schwarzenegger has suggested that the Massachusetts law could serve as a road map for insurance reform in California.

“Other states are going to learn from us,” Romney said during the opening session of America’s Health Insurance Plans’ annual conference and trade show. “Some will find that the things we have done don’t apply to them. Others will find that they are pretty helpful.

“States will take what we have done and do one better,” he predicted.

Romney, a Republican and a likely contender for his party’s presidential nomination in 2008, spearheaded the bipartisan effort in Massachusetts to insure about 500,000 residents who didn’t have health coverage.

The plan, which became law in April, provides so-called universal health care coverage in several ways:

* It requires Massachusetts health care providers to sign up the 106,000 uninsured poor people who are eligible for Medicaid — the federal health
insurance program known as Medi-Cal in California.

* It provides up to $1.2 billion a year in subsidies to low-income people who can’t afford to buy insurance on their own.

* And it requires insurance companies to create more attractive products for those who earn enough to buy insurance but haven’t done so.

Romney said his state likely will spend no more than $1 billion to extend health insurance coverage to people who can’t afford it on their own.

Adopting a similar plan in California would be much more costly to state taxpayers — perhaps as much $9.4 billion a year — because California has a much larger number of uninsured poor, said Marian Mulkey, senior health insurance program officer with the California Health Care Foundation.

“We have more recent immigrants, both documented and undocumented, and more small companies that are less likely to offer coverage to workers,” Mulkey said.

Poor people make up 20.7 percent of the uninsured population in California, compared with 13.1 percent in Massachusetts, according to a recent study by the foundation.

Perhaps the most controversial element of the Massachusetts law is a mandate requiring all residents to obtain health insurance or face up to $1,000 in fines a year. The requirement is similar to state laws forcing motorists to carry automotive insurance.

Some critics of the law say it creates a new pool of customers for insurance companies without protecting consumers from potentially discriminatory premium increases based on past medical conditions, place of residency or gender.

“This model would be a disaster for California because (the state) is dominated by for-profit insurance companies,” said Jerry Flanagan, a health care advocate with the Foundation for Taxpayer and Consumer Rights.

The insurance industry has largely endorsed the Massachusetts plan. “The legislation is a path-breaking attempt to apportion responsibility for expanding access among all stakeholders,” said Karen Ignagni, president and chief executive officer of America’s Health Insurance Plans, shortly after Massachusetts lawmakers adopted the law.

Romney received a warm response from the crowd attending his keynote address at the industry group’s conference yesterday.

Despite the governor’s optimism, Romney and others will not know whether the Massachusetts law is successful — much less how well it would work in other states — until after the universal coverage mandates go into effect in mid-2007, Mulkey said.

“It’s hard to tell if this is going to be a good plan for Massachusetts yet,” she said. “There are always big implementation challenges, and there are always big trade-offs.”