I leaned more than usual from this better than usual Ezra Klein post. I knew that Romneycare was largely financed by the Federal Government, but I didn’t know how.
The key question for any health-care plan is how are you going to pay for it? The Massachusetts plan used three funding sources.
The first — and, in some ways, the most important — was a $385 million annual payment then-Sen. Ted Kennedy had negotiated for the state’s safety net hospitals. President George W. Bush wanted to end the payment. That set off a panic in Massachusetts, and led to Romney and Kennedy going to the Bush administration and making a deal: Massachusetts could keep the money if they put it towards a universal health-care plan. Oh, and they needed to come up with that plan soon.
This was the threat that forced Romney and the state’s Democrats to pass a plan, as not passing a plan would mean losing billions in free federal money.
The state also found two other funding sources [expand Medicaid and use a fund which compensating hospitals for otherwise uncompensated care of the uninsured].
Wow. Somehow Bush tricked himself into forcing a laboratory of Democracy to show that universal health insurance was feasible. Of course this also reminds me that Sen Kennedy was a brilliant passionate extremely hard working hero, but I already knew that.
So Bush did two good things (the other is PEPFAR).
The key point of the post is not the interesting historiography but the observation that state level reform similar to the Massachusetts reform will be impossible if Romney manages to cut Medicaid (indeed Massachusetts might have to abandon universal coverage if Medicaid were no longer “helping Massachusetts cover kids and adults up to 300 percent of the poverty line”).