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Massachusetts Governor Signs
Health Bill but a Battle Looms

http://online.wsj.com/article/SB114488368034324535.html

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By WILLIAM M. BULKELEY
April 13, 2006

Gov. Mitt Romney signed Massachusetts' first-in-the-nation bill designed to force all residents to get health insurance, but uncertain support from insurers raised questions about whether everyone would be covered at affordable rates.

The governor used his line-item veto to cancel a provision that would have required employers with 10 or more employees who don't provide insurance to start offering it or pay fees of $295 per employee. Mr. Romney has said that provision is unnecessary to fund the bill.

Democrats who control the state legislature said they expect to override the veto and restore the provision. They said it was a key part of the legislative compromise that led to the bill's overwhelming passage last week.

The Massachusetts bill is being watched widely as a possible pattern for other states and as a prime element in Mr. Romney's expected bid for the Republican presidential nomination in 2008. It reallocates existing federal and state funds and requires uninsured residents to buy health insurance, which the state would subsidize for poor people.

The state's Division of Insurance will now begin crafting regulations for health-insurance plans, and a new state entity called the Commonwealth Health Insurance Connector will begin reviewing and approving policies submitted by health insurers.

While doctors, health-care advocates and hospitals have generally been supportive of the Massachusetts plan, most health insurers have been cautious. Yesterday, the state's largest insurers, Blue Cross Blue Shield of Massachusetts and Harvard Pilgrim Health Care, declined to comment about their plans because they want to see the regulations.

Marylou Buyse, president of Massachusetts Association of Health Plans, a health insurers' trade group, said “it's going to be challenging to develop” affordable policies since the legislature said the new plans couldn't deny any benefits the state has mandated for other health-insurance programs. “The bill didn't give the insurers a lot of flexibility to come out with different products,” Ms. Buyse said.

However, Aetna Inc., a large insurer based in Hartford, Conn., hailed the plan as "a common-sense approach to addressing the single-greatest strain on the health-care system -- the uninsured." The company praised Massachusetts' effort to require health insurance for people 19 to 26 years old, whom Aetna refers to as "the invincibles" because so many skip insurance in the belief they won't need health care. Massachusetts made a special provision for $150-a-month health insurance for that group that is expected to offer limited benefits.

Stephen Weiner, a lawyer in the Boston firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo who represents hospitals, said that insurers "aren't sure yet" whether they can produce affordable policies -- and may end up trying to cut medical costs. "I see problems for hospitals, because insurers will want to negotiate lower rates overall," he said.
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