Lessons from Massachusetts Health Care Reform (Romneycare)

Last month marked the first anniversary of the federal healthcare law; this week the fifth anniversary of Massachusetts’ own health reform. President Obama likes to tout the federal effort as paralleling the Massachusetts’ reform, but the fact is that Obamacare has created a lot of uncertainty for states across the country, including Massachusetts.

For example, will Massachusetts now have two individual mandate penalties? Will we shift close to 100,000 individuals from the new healthcare exchange to Medicaid? What are the implications of the federal law for the cost picture in already expensive Massachusetts?

Obamacare is of little benefit to Massachusetts beyond pouring billions more dollars into the Massachusetts healthcare industry, which is likely to push the cost of care even higher. Already, as Massachusetts and the federal government have poured hundreds of millions of additional dollars (including almost half a billion beyond initial projections) to address exploding Medicaid enrollment, the cost of care has continued to climb at an alarming rate.

Moreover, the federal law intrudes on the kind of flexibility that was to be the hallmark of the Massachusetts reform. The Massachusetts reform was an experiment, and it still is in its infancy. We do not have clear data on the impact on emergency room usage, on costs, or on the quality of care. We do not know if the structure is sustainable, or whether it will ever be capable of adding real value for small businesses.

These are all important questions, and, as Americans, we need Massachusetts and other states to experiment with all kinds of reforms, not just the foray Massachusetts made in good faith.

As other states think about government-sanctioned exchanges or ways to expedite non-profit private exchanges, interstate compacts, or HSAs for the poor, we will need to have the flexibility to learn from each other–both what to do and what not to do.

In Massachusetts’ case, that is, in the case of the creation of a government-sanctioned exchange, we believe the following lessons have to be learned:

• The governing board must represent customers and not government agencies and specific union interests;
• Specific attention should be given to the needs of small employers and their employees;
• Innovative product designs need to be encouraged instead of limiting choice and over-standardization of products; and
• Portability and continuity of coverage should be carefully considered when individuals change from public or subsidized to unsubsidized coverage.

There’s more, but you get the picture. We are still learning. And that is the American federal system at its best.

It’s the kind of state experimentation that took two-plus decades to give the federal government the base of knowledge necessary to adopt the successful welfare reform of the 1990s. That base of knowledge came from dozens of waivers provided by the Reagan Administration.

That’s the type of federal leadership we need. Instead, these past two years, the health care debate has been held hostage by the American political system at its worst: The desire to do “anything” because we have a problem.

We have a federalist system for a very good reason: It is where the policy innovation comes from. We alter that balance of power at our nation’s peril.

Cross-posted on Newt Gingrich’s Health Reform Report.