Governor likely to veto health fee

Governor Mitt Romney is expected to veto a fee of $295 per employee on some firms that is a key part of the new healthcare bill, angering Democrats he invited to appear with him this morning for a highly choreographed signing ceremony at Faneuil Hall.

In an op-ed column published in yesterday's Wall Street Journal, Romney blamed ''my Democratic counterparts" for including what he called an ''unnecessary and probably counterproductive" fee in the healthcare bill. He warned that he would take ''corrective action" to reject the fee and raised a subtle objection to the legislation's expansion of Medicaid.

The column surprised and angered top Democrats around the state, who said publicly and privately yesterday that Romney had sprung his objections on them after inviting them to today's signing ceremony. Beacon Hill officials said Romney is likely to issue his veto after the ceremony, probably in a letter to lawmakers.

A veto would be easily overridden by the Legislature, because of the large majority of Democrats. But Democratic leaders were nonetheless upset that Romney and his staff would not detail his objections fully, leaving them in the position of joining the celebration without knowing what was coming next.

''The signing should be a celebration, but I find it a little discomforting that we're not in the dialogue about what the governor's concerns are," said state Representative Peter J. Koutoujian, a Waltham Democrat and cochairman of the Joint Committee on Public Health.

Another lawmaker pointed out that Romney had not raised objections to the fee when the healthcare compromise became public last week. ''What Romney is really trying to say is that he was for it before he was against it," said state Senator Mark C. Montigny, recalling GOP criticism of Democratic presidential candidate John F. Kerry's clumsy remark about the Iraq war.

Romney has invited leaders of the business community, the Democratic legislative leadership, and Senator Edward M. Kennedy, all of whom were key players in crafting the landmark legislation. Tickets distributed by Romney's staff label the event: ''Making History in Health Care."

The Republican governor, relishing a major legislative accomplishment as he prepares for a possible 2008 presidential campaign, has enjoyed more than a week of national publicity after passage of the healthcare bill, the first in the nation to offer near-universal coverage to the uninsured.

But Romney has also come under fire from national conservative leaders, who are sharply critical of the $295 fee that would be imposed on companies that do not provide health coverage to their employees. It would apply to firms with 11 or more employees.

Jeffrey M. Berry, professor of political science at Tufts University, said Romney has scored a major victory and now holds the political advantage over Democrats in the state because he no longer needs them.

''Romney has gotten what he wants from the Democratic legislative leaders," Berry said. ''Now he can address another constituency, which is now more important to his future, the conservative wing of his party. "

The op-ed piece raising Romney's objection to the $295 fee set off a flurry of speculation on Beacon Hill that he would veto other portions of the bill, including its expansion of Medicaid services and a reduction in current funding for the Boston Medical Center and Cambridge Hospital, which serve a large populations of poor residents. Romney's staff refused to provide details yesterday.

The $295-per-employee assessment is widely considered a centerpiece of the legislation, because it would raise about $45 million a year and encourage some businesses to provide coverage. The bill was written in such a way that Romney can veto specific provisions while approving the rest of the legislation.

Though lawmakers expressed frustration with Romney's apparent veto threat, the governor raised objections to proposals to impose fees or taxes throughout the months-long negotiations.

The lawmakers crafted the bill to allow him to veto a part of the legislation, knowing that the Legislature would override his objection.

But taxes are a politically volatile subject for Romney as he readies a potential run for the White House.

He pledged to veto tax increases when he ran for governor. When the healthcare compromise was unveiled last week, Romney was asked whether the assessment really amounted to a tax. ''It's not a tax hike," Romney said. ''It is a fee; it's an assessment."

At the time, Romney said it makes sense to levy a charge on businesses that don't offer insurance when all other businesses already pay an assessment. He downplayed the importance of the fee to the overall package, saying, ''The financial amount is small enough not to be significant relative to the entire package, but we'll look at the provision and see who it applies to."

Eric Fehrnstrom, Romney's spokesman, said yesterday that the governor's op-ed piece in the Wall Street Journal restated what Romney had said before, mainly that because he had not asked for the $295 fee ''and since it is not essential to getting everyone insured, he would probably make adjustments in this area."

The bill also envisions $125-million in state spending and about $790 million in federal money next year.

Montigny, former Senate chairman of the Joint Committee on Healthcare, said the op-ed piece shows that now that he has a health bill, Romney is joining the conservative forces in this country to run against the state's Democratic liberal establishment.

''Now he wants to join them against us," the New Bedford Democrat said. ''He is running away from Massachusetts, and he is now representing the rest of the nation against Massachusetts."

Another legislative leader who was a key player in the legislation added: ''He is making the Democrats the scapegoats for his national ambitions. And not to let us know what he is going to veto in advance of the event is egregious. His staff is going to issue a press release afterwards, but we can't respond at the signing event."

The legislation's goal is to increase coverage in phases over three years to include 90 to 95 percent of the currently uninsured. That will be accomplished by the individual mandates, using the assessment to push employers to provide health coverage, and by creation of private, subsidized health plans for people who cannot afford them on their own.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, a policy research and fiscal watchdog agency, said that despite Romney's objections, business leaders are sticking by the assessment that was created as part of a bargain to break the deadlocked negotiations over the bill.

''There is a broad understanding in the business community that the assessment is tied to equalizing the burden of state's providing free healthcare to workers not covered by insurance, and that it was critical to achieving this major reform," Widmer said.

At a press conference April 3, Romney ticked off several aspects of the bill he would study closely when deciding what to sign and what to veto, including a provision that would give higher Medicaid rates to healthcare providers.

Also included in the bill is a proposed requirement that one member each from the House and Senate be part of any negotiations with the federal government over $385 million in annual Medicaid funding the state is slated to get.