Healthcare reform efforts win praise

Hospitals, insurers, and business groups are rallying behind Beacon Hill leaders' efforts to expand healthcare coverage, praising Governor Mitt Romney and Senate President Robert E. Travaglini for unveiling plans yesterday that would achieve that goal in large part by allowing insurance companies to offer less expensive policies with scaled-back benefits.

Peter Meade, executive vice president of Blue Cross/Blue Shield, described the day as ''a great beginning," and Bill Vernon of the National Federation of Independent Business said, ''Trusting the market to provide flexibility and choice of products is critical to solving the healthcare crisis in our state."

Eileen McAnneny of Associated Industries of Massachusetts called the approach to use markets ''absolutely a good one."

''Giving employers and consumers more choices to determine the products that best meet their healthcare needs and fit within their financial means, as both approaches do, will go a long way towards reducing the number of uninsured in the Commonwealth," said Dr. Marylou Buyse, president of the Massachusetts Association of Health Plans.

Neither Romney nor Travaglini would require businesses to provide coverage to their workers, a step that many healthcare advocates and specialists believe is necessary to cover the roughly 460,000 to 530,000 people without coverage in Massachusetts. And neither leader is proposing a tax increase or another new source of revenue to pay for expanding coverage.

The momentum building behind the strategy backed by Romney and Travaglini suggests that those who support a so-called employer mandate may have a hard time getting traction in the healthcare debate.

But John McDonough of Health Care for All, which helped craft a competing bill that would raise cigarette taxes by 50 cents and require Bay State employers to provide coverage, said, ''You can't solve this problem without new revenues on the table, and without some requirement."

''While we respect the ideas that are being put forward, the notion that this is going to lead to everyone getting covered by January 2009 is not realistic," McDonough said, referring to Romney's prediction that his plan would do just that.

Romney filed his bill yesterday, while Travaglini discussed the broad outlines of his plan yesterday in a speech to the Greater Boston Chamber of Commerce. Later in the day, the Senate president briefed about two dozen insurance and hospital executives in his State House office. He is expected to provide additional details today.

The governor insists that about 168,000 of the half-million or so uninsured Bay State residents could afford private insurance if premiums were lowered. His plan would alter state rules to allow insurers to offer policies for individuals with monthly premiums of about $200, compared with the current average of between $350 and $500. In addition, the administration has received permission from the Department of Labor to allow people to pay their premiums pre-tax, which means the effective cost would be between $134 and $160.

Romney says the new plans, though not as comprehensive as what insurance companies typically offer now, would include preventive and primary care; emergency services; surgical benefits; hospitalization benefits; ambulatory care; mental health benefits; and prescription drug coverage. A new state entity, ''the Commonwealth Care Exchange," would oversee the pre-tax payments of premiums.

Individuals who work for companies that don't offer insurance, part-time workers and contractors who don't qualify for insurance, sole proprietors, and the unemployed would be eligible to purchase the discounted plans. Small companies employing 50 or fewer people would be able to purchase the plans for their workers.

The bill Romney filed yesterday deals specifically with the discounted insurance policies. More broadly, he wants the state to redouble its efforts to enroll eligible people in Medicaid, and hold down medical costs by advocating ''aggressively managed treatment" in a network of clinics, community health centers, and hospitals.

Romney says that enrolling more people in Medicaid would cost the state about $150 million, but that some or most of the money could be generated by running the program more efficiently. Otherwise, he argues, his plan won't cost the state any additional money because he would wring savings out of the current system.

Travaglini, in contrast, is promoting his plan as a way to cut the number of uninsured in half in two years. Like Romney, he wants to allow insurance companies to offer less expensive, scaled-back plans. But he also wants the state to spend an extra $45 million annually -- matched by $45 million from the federal government -- to raise Medicaid reimbursement rates. Because healthcare providers in Massachusetts are reimbursed for about 80 percent of the cost of the services they provide to Medicaid patients, they pass their losses onto insurers, which then raise premiums.

Travaglini also would allocate an undisclosed amount of money to outreach programs to persuade people to get medical care in the most appropriate settings.

According to several people who attended the afternoon briefing in the Senate president's office, Travaglini also wants the state to pick up the tab for insuring those doctors whose malpractice premiums are extraordinarily high, and to force companies that don't provide coverage to their workers to help defray the costs when their employees seek treatment from the public ''free care pool."

Globe correspondent Janette Neuwahl contributed to this report.