“We Can’t Go Back to Romneycare”: How an ACA Repeal Endangers Massachusetts

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With the House Republicans’ Affordable Care Act (ACA) replacement working its way through the federal government, many in Massachusetts are jumping to the same conclusion: Here in the state of Romneycare, things will just go back to the way they were.

If the bill passes, however, experts say the transition won’t be that easy.

The replacement bill, dubbed the American Health Care Act (AHCA), is best known for killing the mandate that requires each individual to have health insurance, replacing it with a penalty for lapsed coverage. In this respect, Massachusetts, which leads the country in coverage rates, may have a smoother ride than its neighbors. But the AHCA also rolls back Medicaid expansion—and that could put Massachusetts on a very bumpy road.

The Commonwealth is one of 31 states, plus Washington, DC, that expanded Medicaid under the ACA. Last year, the state also received a multi-billion-dollar Medicaid waiver, which strengthens and restructures the MassHealth system, and provides additional support for substance abuse and behavioral healthcare. With Medicaid now in jeopardy, so too is Massachusetts’ healthcare ecosystem.

“Medicaid covers a significant portion of our low-income populations,” explains Dr. Stuart Altman, chairman of the state’s Health Policy Commission. “If all of a sudden Medicaid is constrained, the question is, what would the state do?”

As Altman sees it, there are two options, both bleak. Massachusetts could attempt to make up the money internally, straining the state budget and taxpayers. Or, it could spend less, potentially limiting Medicaid eligibility, services offered, and payouts to hospitals.

“The state Medicaid officials are going to be faced with this awful choice,” agrees Brian Rosman, director of policy and government relations at Health Care for All, a local healthcare advocacy group. “Do we cut benefits, restrict eligibility, or do we start paying hospitals less?”

As it is, many hospitals argue that Medicaid reimbursements do not fully cover the costs of care given to MassHealth patients. And to top it all off, Rosman says, “We have a lot of medical innovation, we have a lot of top-class hospitals that are more expensive than average, so the cuts would disproportionately affect Massachusetts.”

The Bay State would likely also be in a unique situation when it comes to the abolition of the insurance requirement—but on the opposite end of the spectrum.

In addition to an individual mandate dating back to then-Governor Mitt Romney’s 2006 healthcare law, “we have had, traditionally, a much better insurance market for our workers and our population,” Altman says. “By pulling it back, it won’t pull Massachusetts back nearly as far as it would pull other states back.”

That said, returning to Romneycare isn’t really an option. The law was never meant—or able—to function in a vacuum.

“The original Romneycare law was, in effect, a Medicaid expansion financed by federal Medicaid money,” Rosman explains. “If that federal money is not there and we have to pay for it with all state money, then something else in the state budget’s got to give.”

Back in 2005, Romney negotiated his way into receiving three years’ worth of extra Medicaid funding, totaling $1.05 billion, from the Bush administration. Without that money, the program wouldn’t have worked—just as it couldn’t work under the AHCA’s proposed conditions, Altman says.

“Romneycare itself was very heavily tied into the federal government,” he says. “It wasn’t like we were totally independent. We can’t go back to Romneycare.”

Still, Gary Young, director of Northeastern University’s Center for Health Policy and Healthcare Research, says it’s safe to assume the ideology behind Romneycare could still apply in a post-ACA world.

“Not only do I think Massachusetts will retain the individual health insurance mandate, I suspect some other states will as well,” he says. “[But] the financial support may be more modest, and that could create certainly a lot of controversy and debate over the fact that people in Massachusetts have less now, and yet we’re still requiring a mandate.”

One group that wouldn’t have less under the AHCA? The wealthy, Altman says—but the benefits largely stop there.

“There are going to be a number of people in Massachusetts who are going to get a big tax windfall,” he says, referring to tax policy restructuring in the bill. “Particularly for the wealthy and the upper-middle class and some small businesses, they’ll view this positively. But the majority of people in Massachusetts will either not see any change or it will be negative. And for the state, it will definitely be negative.”

It may be too soon to worry about that negative impact, though. Rosman, Altman, and Young each expressed doubt that the bill could pass without significant revisions, citing widespread consumer, industry, and political opposition.

“There’s lots of reasons to think they may not be able to get the ‘yes’ on this, and they may punt and say, ‘We’ll regroup and try later,”’ Rosman says. “The later might never come.”

Even if it does, Young suspects that the long-term effects of the AHCA—think rising healthcare costs and reduced benefits—could spur restorative action, at least at the state level.

“If healthcare costs continue to increase, then people start doing a lot of soul searching,” he says. “That’s when what we have in Massachusetts will come under greater scrutiny.”