Mitt Romney’s plan may undercut Mass. law

Would trim Medicaid funds state relies on; Threatens to undermine his key achievement

‘What he’s proposing is in direct opposition to what he did as governor,’ said Amy Whitcomb Slemmer.

WASHINGTON - A proposal by Mitt Romney to curtail Medicaid spending would dramatically undercut the way the Massachusetts health care overhaul law has achieved near universal coverage.

Although the specifics of Romney’s plan are not public, his overall intent - to rein in how much Medicaid money Washington sends to the states - would probably cripple the Massachusetts health care law, which was made possible by an expansion of Medicaid funding.

If Romney succeeds, the result could have an ironic twist: the governor who ushered in the country’s first universal health plan would, as president, put in place policies that could undermine one of his signature achievements.

“It would have been impossible for Massachusetts to do what it did without increased federal Medicaid support,’’ said John McDonough, a major architect of the state’s health care overhaul law and now director of Harvard University’s Center for Public Health Leadership.

“What he’s proposing is in direct opposition to what he did as governor,’’ said Amy Whitcomb Slemmer, executive director of Health Care for All in Massachusetts, citing the Bay State’s 98 percent coverage rate, the highest in the nation. “That kind of expansion would not have been possible under a block grant program,’’ as Romney has proposed. Block grants give states more flexibility in spending federal money, but restrict funding increases.

As governor, Romney worked closely with the late Democratic Senator Edward M. Kennedy to secure hundreds of millions per year in federal aid to realize their shared goal of access to health care for all. Expanding Medicaid coverage - and the flow of federal money that came with it - was a key underpinning of the state’s 2006 law.

While McDonough said it is possible for block grants to be structured in a way that adjusts for increased enrollment, he said the kind of block grants advanced by many Republicans has been more along the lines of “Here’s your dough. Good luck. Do the best you can. See you later.’’

US Representative Paul Ryan, a Wisconsin Republican and chairman of the House Budget Committee whose budget Romney has enthusiastically endorsed, has proposed a block grant tied to massive cuts in federal Medicaid expenditures.

The federal government, which now pays a fixed share of states’ Medicaid costs that automatically rise in response to a recession, would instead dole out a set dollar amount that would increase each year with inflation and US population growth.

Ryan’s block-grant proposal would cut federal Medicaid funding by a third by 2022 because it would no longer keep pace with health care costs or expected enrollment growth, according to the left-leaning Center on Budget and Policy Priorities.

“If that is the block grant program Romney has in mind, then that does create significant potential risk for the state,’’ McDonough said. “There’s no way to do that kind of a block grant without doing significant harm to current and future Medicaid enrollees.’’

Asked by the Globe whether Romney plans to adjust the block grants if the number of people who become eligible increases, the campaign responded in an e-mail, “There are a number of details that would need to be addressed regarding the exact design of the block grant.’’

His campaign said Romney’s goal is to “provide incentives for states to operate more efficiently and effectively, not to reward them for increasing enrollment or costs.’’

Romney’s backers say it is too early to declare that his plan would undo the Massachusetts health care gains.

Romney has also vowed to repeal President Obama’s health care overhaul law - modeled after the one Romney signed in Massachusetts - citing its costs and calling it a “takeover of the US health care system.’’ Instead, he said, states should be able to decide how to insure their own residents. Block-granting Medicaid is just one piece of guaranteeing that flexibility, he has said.

His proposal would encourage states to find more efficient ways to care for low-income children, seniors, and the disabled “through reforms that might look similar to or completely different from those implemented in Massachusetts,’’ said a Romney campaign spokesperson.

But Romney’s proposal also undermines his oft-repeated assertion that states could easily choose to replicate Massachusetts’ model on their own without federal interference, since much of the cost of Massachusetts’ health law was picked up by federal taxpayers through the Medicaid match.

In the first three years following the health care overhaul, about 430,000 Massachusetts residents gained insurance. Approximately 56 percent of the gain in coverage was related to increased federal Medicaid support, according to a 2009 report by the Kaiser Family Foundation.

Of the newly insured, 18 percent gained coverage through Medicaid, and another 38 percent gained coverage through Commonwealth Care, a program that federal Medicaid dollars pay half of, due to waiver negotiations that Romney and Kennedy had achieved. That program has served as a safety net for the thousands of Massachusetts residents who lost their jobs and associated health insurance amid the recession.

Massachusetts health care advocates worry that block-granting Medicaid would shift the cost burden of insuring the very poor onto already cash-strapped states. The result, they fear, could mean curtailing eligibility or lowering benefits, unraveling the success Massachusetts has had in insuring its residents.

“If there is an economic downturn like the one we just experienced and the size of the Medicaid program needs to expand as people lose their jobs, the state is left holding the bag without any additional support from the federal government,’’ said Dr. Julian Harris, director of the state’s Medicaid program.

Harris said another concern over block grants is that since Medicaid funds much of the long-term care for the elderly, as seniors age and there is increased demand for such care, it will become harder for states to pay for it.

Others, though, say it is too early to know whether block grants would devastate the state’s health insurance gains, given the lack of details about Romney’s plan.

The Pioneer Institute of Public Policy and Research, a conservative think tank in Boston that recently released a book analyzing the Massachusetts plan, supports the idea of block grants philosophically.

“The whole rationale would be so states would have more flexibility in how we spend the money,’’ said Joshua Archambault, director of health care policy at the institute. “In theory, if there is concern about how the money is spent, they should look at who is in state leadership. Until folks get really specific about what it’s going to look like, you can’t really say how it’s going to play out.’’