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Public Statements

Romney Launches Healthcare Reform in Massachusetts

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ROMNEY LAUNCHES HEALTHCARE REFORM IN MASSACHUSETTS

Files legislation to create affordable insurance plans for individuals, small business

Governor Mitt Romney today kicked off the healthcare reform debate at the State House by filing a bill that will extend health coverage to more people by creating affordable insurance products. The legislation represents the next step in the Governor's Commonwealth Care plan to provide health insurance to all citizens.

"With the small percentage of uninsured in Massachusetts, we are in a unique position to give all of our citizens quality health insurance," said Romney. "This will not be a government-mandated universal coverage program or a plan that requires new taxes. It will be a market-based reform focused on the creation of affordable insurance plans."

Approximately seven percent, or 460,000, of Bay State residents currently do not have health insurance. Of those, 168,000 have household incomes greater than 300 percent of the federal poverty level and should be able to purchase some form of health insurance. Many of these individuals are employed by small businesses that either do not offer health insurance, or they are part-time or contract workers not eligible for benefits through their job.

Romney's legislation will enable private insurers to offer a comprehensive health insurance product costing approximately $200 a month, compared to the current $350 average cost for small group products and over $500 average for non-group products. This will provide small businesses and individuals without insurance expanded choice at a lower cost.

"Small business owners want to be able to offer their employees health insurance, but the rising cost of healthcare has made that impossible for many of our entrepreneurs," said Lieutenant Governor Kerry Healey. "Our new plan will make it easier for small businesses to offer their workers a comprehensive benefits package at an affordable rate."

The new insurance plans, developed by the private insurance companies, will be high quality and offer the following categories of coverage:

* Preventive and primary care;
* Emergency services;
* Surgical benefits;
* Hospitalization benefits;
* Ambulatory patient care;
* Mental health benefits; and
* Prescription drug coverage.

Romney's bill establishes a new entity, the Commonwealth Care Exchange, to facilitate the pre-tax payment of premiums by working individuals, resulting in a 15 to 30 percent savings off their insurance bill depending on income. Using pre-tax dollars will enable working individuals to purchase the new plans for an effective cost of between $134 and $160 a month.

The new exchange will also enable, but not require, a participant's company to make a financial contribution toward their healthcare costs.

To encourage participation in the exchange, Romney's plan offers incentive payments to companies for registering. In addition, the state will provide decals to companies that offer health insurance to their employees so they can publicize their good corporate citizenship.

A nine-member board will govern the Commonwealth Care Exchange. Membership includes the following:

Ex-Officio Members:

· Economic Development Secretary
· Healthcare Finance and Policy Commissioner
· Group Insurance Commission Executive Director
· Administration and Finance Secretary

Gubernatorial Appointees:

· An actuary
· A healthcare benefits specialist
· An employee benefits attorney
· A small business representative
· A labor representative

Bill Vernon, Massachusetts State Director of the National Federation of Independent Businesses, praised Romney's plan, saying it will greatly benefit small business owners and their employees. Vernon said, "Small business owners want access to affordable healthcare for themselves, their families and their employees, but cost is a barrier for far too many. Allowing lower cost products to enter the market will allow small business owners who cannot afford Cadillac coverage to provide health insurance coverage for themselves and their employees."

Another 36,000 unemployed individuals are also expected to take advantage of the new low-cost insurance products. Currently, the state's Medical Security Trust contributes towards their insurance for 30 weeks. Romney said he anticipates that when these health insurance products become available, the trust will purchase them for these individuals while they look for a job. New employees will also be eligible to purchase low-cost insurance during their waiting period before coverage from their employer kicks in.

Romney pointed out that his Administration has made significant progress in signing up individuals who are eligible for insurance through the Medicaid program, the first phase of his health care reform efforts. Of the state's 460,000 uninsured, 106,000 were estimated to be Medicaid-eligible but not receiving benefits, according to a state survey conducted last year. By the end of this fiscal year, an additional 60,000 individuals will have been enrolled in the Medicaid program since the beginning of Fiscal Year 2004 and new efforts are underway to sign up more people in Fiscal Year 2006 through an aggressive outreach effort.

Romney said the next phase of Commonwealth Care will create Safety Net Care, which will convert the uncompensated care pool into an insurance plan for the 150,000 working poor and long-term unemployed, directing them to a specified network of clinics, community health centers and hospitals. Currently, the state spends more than $1 billion annually on healthcare for the uninsured, but it does so inefficiently with limited controls on usage.

http://www.mass.gov/portal/govPR.jsp?gov_pr=gov_pr_050406_healthcare_roll_out.xml

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