May 19, 2007

Romney's Health Plan

Could Mitt Romney's successful health care initiative in Massachusetts serve as a blueprint for a national program? Edmund F. Haislmaier of the Heritage Foundation helped develop that initiative, and he thinks so.

His [Romney's] administration found that the reason some 100,000 Medicaid eligible residents were not enrolled wasn't because they "simply hadn't made the effort." Rather, it was because hospitals often got paid better rates by the state's uncompensated care pool than by Medicaid for treating those patients. Thus they had an incentive not to enroll those individuals in Medicaid when they showed up in emergency rooms. Of course, the total cost to taxpayers would actually be much less if they were enrolled in Medicaid, and thus getting most of their care in clinics and doctors offices instead of hospitals.

The Romney administration fixed that by putting Medicaid eligibility determinations back in the hands of the state Medicaid program. Then they seized on the opportunity presented by the impending (June 2006) expiration of the state's Medicaid waiver, to tackle covering uninsured individuals who are ineligible for Medicaid. That waiver currently pumps $385 million a year in Federal Medicaid money into the state's uncompensated care pool, which in turn pays it out to hospitals treating the uninsured. But the Feds told the state that they wouldn't approve a waiver extension absent a state plan to achieve better results with the money.

Romney's solution was to propose converting what is really a "hospital safety net" into premium assistance for the low-income (but not Medicaid eligible) uninsured. Of course, if you're going to now subsidize thousands of people, instead of just a handful of hospitals, having a one-stop-shop health-insurance exchange sure makes for an administratively simpler and cheaper way to match up all the various combinations of people, plans and payments. It also means that as those folks work their way up the income ladder and lose the subsidies, they still have portable health insurance coverage. Federal Medicaid officials liked the approach.

Government assistance with private health care insurance premiums....or Hillarycare? Let the debate begin.

Posted by dan at May 19, 2007 10:02 PM