Mitt Romney’s support for mandatory health insurance as the governor of Massachusetts continues to hang like an albatross around his neck during his bid to become president. It made him the butt of many attacks during Republican primary debates, and this week, it’s forcing him into muddy explanations about whether the fine for failure to have health insurance is a penalty or a tax. As governor, did Romney realize that supporting the individual mandate was a risky political move? If so, why did he do it? Let's take a look back.
Gov. Romney ultimately became convinced that requiring health insurance was the best way to persuade everyone, or nearly everyone, to sign up. But in the early years of his administration, Romney looked at a number of ways to cover the roughly 500,000 Massachusetts residents who were uninsured.
MIT economist Jon Gruber helped make the case for the individual mandate to Gov. Romney and a group of advisers in the spring of 2004. Gruber explained to the group what would happen with and without the individual insurance mandate.
"The [governor's] plan without the mandate covered about one third as many people but cost two thirds as much," Gruber explains. "And that was because the healthy free riders that he was so worried about [would] stay out without the mandate."
Gruber says that, at the time, Romney was enthusiastic.
"It seemed to fit with his basic sort of management consulting view of the world," Gruber says. "Here’s a problem, we can fix it, and the numbers all work."
But as Gruber looked around the room that day, it was clear not everyone there shared Romney’s enthusiasm.
"His political advisers did not seem very excited," Gruber recalls. "His political advisers seemed to think that this was not a great move for him, that this was too radical a step."
Romney wasn't the first moderate Republican to take the leap. In 1993, U.S. Sen. John Chafee of Rhode Island filed a high profile bill that included an individual mandate. It was roundly rejected by more conservative Republicans and most Democrats.
Christy Ferguson, who went through that battle as an aide to Chafee, was Romney’s first public health commissioner.
Ferguson warned Romney about the political risks of proposing an individual mandate. It wouldn’t work in many states, she told him. But Ferguson said it might be safe in Massachusetts, where about 93 percent of residents already had health insurance and the state was spending roughly $1 billion reimbursing hospitals and clinics that cared for the uninsured.
"In Massachusetts, given the fact that most people had access to that hospital based, emergency based care, the idea of an individual mandate made sense," Ferguson remembers telling Romney.
While the governor was weighing his options, the administration of President George W. Bush threw up an unexpected hurdle. The administration decided it would no longer send large Medicaid grants directly to hospitals in Massachusetts that cared for uninsured patients. Romney would have to move that money — at least $385 million — into an insurance program or lose it. Ferguson says Romney couldn't let the state give up that much money.
"It’s very ironic," Ferguson says. "I think that a lot of what happened in [Massachusetts] was driven by the Bush administration."
So did pressure from the Bush administration push Romney towards the individual mandate? Or could Romney have found a way to get to near-universal coverage without requiring health insurance?
"Maybe," Ferguson says, "but nothing that really would have made as much sense. And so I think he’s getting a bum rap from that perspective because I think there were a lot of other people involved at the national level."
Even with the looming threat of losing hundreds of millions of federal dollars, Romney spent seven months talking about his plan without mentioning an individual mandate. Then, Romney had what his aides call an opportunity. He would be the keynote speaker in June 2005 when the Blue Cross Blue Shield of Massachusetts Foundation released a report titled “Building the Roadmap to Coverage.”
The report would recommend that the state require employers to provide coverage and make health insurance mandatory for all individuals. It would be an ideal time for Romney to weigh in on both. Everyone expected him to reject an employer mandate, but what about the individual mandate?
Andrew Dreyfus, then-president of the Blue Cross Foundation, went to the State House to brief Romney's health care aides ahead of the event.
"At that meeting, the governor's top aides said that he had not yet committed to supporting a mandate," Dreyfus recalls. "My sense that day was that they had yet to make the political and policy decision to support it."
The individual mandate would also be a tough sell for many health care officials and Democratic leaders in Massachusetts who had traditionally opposed forcing individuals to be responsible for their own health insurance.
Alan Weil, one of the report’s authors, held several briefings in advance of releasing the report.
"No one likes the sound of the mandate," Weil admits. "The mandate is intended to be a backstop, but there’s no way to get to universal [coverage] without the mandate."
Leading Democrats agreed to consider the individual mandate if there would be increased responsibility for employers as well. But what about Romney?
Dreyfus kept a chart that showed the position of each State House leader on main health care issues. But there was a blank space in the intersecting box for Romney and the individual mandate. The day before the big event, Dreyfus called Romney’s aide.
"And I asked him then, 'Would the Governor support the mandate?' And he said 'Yes, put a check in that box,' " Dreyfus recalls. "I couldn't possibly have known how significant that would be, but it did feel like a defining moment."
The next day, before top hospital, insurance and legislative executives, Romney talked about the individual mandate as a matter of individual responsibility. After the speech, Romney told reporters the mandate was the "ultimate conservative idea."
"I think it’s a growing recognition," Romney said, "particularly among conservative think tanks, that the idea of having large numbers of individuals who can afford health care, but chose instead to make the taxpayers pay, that that doesn’t work, that people have to have personal responsibility."
Romney suggested a less rigorous mandate than what Massachusetts has in place today. The bill he filed in July 2005 would have required either coverage for hospital stays or proof that residents had $10,000 to cover their health care costs.
The individual mandate, introduced in a bipartisan spirit in Massachusetts, never faced significant opposition here. It became law in April 2006. Nationally, there was some pushback, but not much.
"It was very much a middle-of-the-road approach at that time," Ferguson says. "The politics have changed significantly, the substance really has not."
The substance of the mandate eventually became a cornerstone of President Obama's national health care law. Democrats embraced the insurance requirement after seeing how it worked in Massachusetts. Republicans fled from the mandate, leaving Romney in the lurch.
Ironically, that day back in 2005 when Romney first proposed the individual mandate was the same day he first acknowledged he was considering a run for president. Now, the health care law that was supposed to be Romney's crowning achievement has become a liability.
This article was originally published on July 06, 2012.
This program aired on July 6, 2012.