RomneyCare Is a Mess. But It Might Still Represent the Best Case Scenario for ObamaCare.


Here's what we know about RomneyCare, the 2006 Massachusetts health policy overhaul signed by Mitt Romney that served as the model for President Obama's 2010 reform law: Insurance coverage in the Bay State were already high relative to the rest of the states, but since the law passed, coverage rates have gone up further, to somewhere between 94 and 98 percent, depending on how it's measured. Following the coverage expansion, utilization of various health care services has gone up, and so, in turn, has the cost of health care and the price insurance. At this point, many, perhaps most, experts agree that the current cost trajectory for the state is unsustainable.

A new study on the Massachusetts overhaul by health policy researchers at Harvard and the University of Minnesota confirms all of this, and puts it into worrying perspective: This may be the best possible outcome for a RomneyCare/ObamaCare-style health policy overhaul.

The study, which was published in the journal Health Affairs, used evidence from annual phone surveys of Massachusetts residents. It found that following the passage of RomneyCare, utilization of many health services increased: Adults under the age of 65 were more likely to have made multiple doctor visits, seen a doctor for preventive care, or found time to see a dentist or health care specialist. Costs, accordingly, have gone up. "Massachusetts continues to struggle with escalating health care costs," the authors write, "reflecting the decision to defer addressing costs in the 2006 legislation so as not to hold up the expansion in coverage."

Given the similarities between RomneyCare and ObamaCare, it's worth noting that while it's true that the legislation did little to control costs, that wasn't what was promised when it was passed. Then-Gov. Romney's public pitch promised that the law would provide "affordable health insurance" and that "the costs of health care will be reduced." But as the study reports, health care costs in the state continue to grow faster than inflation, and there is "reason to be concerned about employer-sponsored insurance premiums"—employer sponsored insurance being the state's main vehicle for coverage—"because health care costs in the state continue to rise."

Yet despite all this spending, the study reports only weak evidence to suggest that anyone is getting healthier:

The survey used for this study had a single question about health status: "In general, would you say that your health is excellent, very good, good, fair, or poor?" … We found strong and sustained gains in the share of nonelderly adults in Massachusetts who reported their health as very good or excellent, with an increase from 59.7 percent in 2006 to 64.9 percent in 2010.

This doesn't tell us much of anything. Increases in self-reported health are not the same as increases in objective health measures. As we know from an ongoing study of Medicaid in Oregon, the newly covered are likely to immediately report feeling healthier, even if they've received no medical benefit from the coverage at all. This suggests that much of the increase in self-reported health comes from the psychic benefits of coverage rather than from significant objective improvements in health.

And unlike the Oregon Medicaid study, there's no evidence to suggest that the law is reducing the amount of people who are having trouble paying medical bills. The authors report that "in 2010 the share of adults who reported problems paying medical bills was not significantly different from 2006, at nearly one in five adults." While there were minor fluctuations over the years, "there was no sustained improvement in problems paying medical bills."

Meanwhile, the program is on the road to fiscal ruin. Failure to deal with the larger cost problem means that the system simply doesn't work as is:

Going forward, the success of health reform under the Affordable Care Act in Massachusetts, and in other states, will depend on the ability of policy makers and stakeholders to come together to take on the considerable challenge of reining in health care costs. Massachusetts has the opportunity to lead the way here, as the state did in the push toward universal coverage. The pre-2010 status quo is not a sustainable option for Massachusetts or the nation. [bold added]

Here's the kicker: RomneyCare was enacted in a favorable political environment with some measure of bipartisan support. Most polls still show that a majority of the state's residents support the law. And yet year after year, the state has struggled to pass the sort of reforms that various health wonks and RomneyCare boosters think could save the system. And year after year, those efforts have failed. (This leaves aside the growing evidence that such reforms may not work at all.)

The contrast between the Bay State's amenable reform environment and the negative national reaction to the law is important. "Massachusetts's 2006 reform effort was built on many years of incremental reforms, with bipartisan political support, strong commitment to reform across stakeholders, and a strong economic environment," the study says. That should serve as a warning for those who an easy road ahead for President Obama's federal version of the law. As the authors note, "Few—if any—states, including Massachusetts, are starting to implement the Affordable Care Act in such favorable conditions."

In other words, RomneyCare isn't sustainable without substantial reform. But even in the most favorable plausible political environment, those reforms have yet to prove viable. Despite its many failures, RomneyCare may represent the best case scenario for ObamaCare. And it still isn't working.