DC think tanks have unpredictable reactions to the Massachusetts health care plan

when edward kennedy ascended the State House steps in April to praise the Legislature’s passage of a bill that aims to ensure that every Massachusetts resident has health care coverage, the state’s senior senator appeared to be playing to type. Kennedy spoke in grandiose terms, praising Gov. Mitt Romney and State House leaders for setting Massachusetts on a course to “the impossible dream of health care for all.” Thanks to their bipartisan efforts, he said, “quality care will truly be available and affordable for each and every man, woman, and child in our state.”

To many conservative ears it might have sounded like yet another Kennedy paean to big-government spending, if not a replay of the 1992 Clinton health care initiative they helped derail. So it comes as some surprise to find Washington’s liberal intelligentsia—which far more regularly sings in chorus with Kennedy—vociferously berating the plan.

“This is being sold as achieving universal coverage,” says Nathan Newman, policy director for the Progressive Legislative Action Network, a liberal policy organization. “But when people talk about insurance access and health care for all, no one thought that would mean telling people to go get it, and fining them if they don’t.”

Meanwhile, some of the biggest cheers came from the Heritage Foundation, Washington’s most well known conservative think tank, which advised Romney on aspects of the plan, and which remains largely supportive of the end product, even after the Legislature’s Democrats had their way with it.

If, given the well known political predilections of most DC–based think tanks, reactions to the ambitious health reform law have not always been predictable, it’s probably because the measure does not fit neatly into a particular ideological box. With its mix of subsidized coverage for poorer residents and a market-based approach to drawing higher-earning residents under the coverage umbrella, the measure offers something for everyone to like or loathe. That makes reaction to it a twist on the tale of the blind men and the elephant: The various brain trusts grab on to whichever part of it makes their point.

The 145-page bill aims to ensure coverage for nearly all of the 500,000 to 600,000 Massachusetts residents who now lack health insurance. It does so by adding to the state’s Medicaid rolls low-income residents who will pay nothing for their coverage, providing subsidies to bring down the cost of premiums for those earning between 100 and 300 percent of the federal poverty level, and encouraging private insurers to craft new, affordable insurance plans for those with earnings above this level.

For Newman and other dissatisfied liberals, one red flag is the bill’s individual mandate, which requires all residents with incomes above 300 percent of the federal poverty level ($29,400 for an individual; $60,000 for a family of four) to obtain —and pay for—health coverage, with fines as high as $1,200 a year for those who don’t. By contrast, liberal critics note, employers who fail to provide coverage to their workers will be hit with only an annual $295-per-worker assessment. (Romney used his line-item veto to eliminate even that modest charge, but state legislators overrode him.)

“What we are concerned about is whether it really struck the appropriate balance in what employers are required to do versus the penalties individuals might face,” says Karen Davenport, director of health policy at the Center for American Progress, the organization founded by former Clinton White House chief of staff John Podesta as a liberal counterweight to the conservative Heritage Foundation.

The libertarian Cato Institute is also critical of the individual mandate, though hardly because they want to see more required of employers. The insurance-buying requirement represents “an unprecedented expansion of government power,” says Michael Tanner, Cato’s director of health and welfare studies.

But the new law also has plenty of fans, and, like its critics, they sometimes find themselves in league but on very different grounds.

Stuart Butler, the Heritage policy analyst who advised Romney on the law, says the new Massachusetts system is at its core a conservative one, since it relies on the principles of federalism (states should lead the way in policy innovation), personal responsibility, and market-based insurance competition. He says that it will eliminate billions in costs now borne by taxpayers by forcing individuals to take responsibility for their own health coverage rather than receiving free care in emergency rooms, where costs are paid by the state, in part through assessments on hospitals and employers that are eventually passed on to those with insurance coverage. “It focuses the responsibility for insurance on the person who is getting care, rather than the rest of us,” he says.

Butler expects the plan will also shift health care costs away from the traditional employer-sponsored model and toward “consumer-driven” plans, which carry much higher deductibles and put patients more in charge of their own health care spending. Such schemes are anathema to liberals, who charge that they only shift costs onto the backs of consumers.

That, in turn, may explain why leaders of the Progressive Policy Institute make the case for the Bay State plan by focusing on its bold promise of coverage for all. “Regardless of what you think of the details of the plan, the fact that the state has done this is the most remarkable part of it,” says David Kendall, senior fellow for health policy at the institute, which is the think tank arm of the Democratic Leadership Council, the group that helped bring Bill Clinton to power. “It eliminates the excuses that people often give that it can’t be done, or it’s too expensive, or that there won’t be bipartisan support for it.”

But Kendall agrees with critics that the Massachusetts system will be a success only if state leaders are able to convince insurers to offer affordable plans. “If the costs get out of control, this would penalize the middle class, but that’s the risk we have to take,” he says.

That penalty would come not only in the form of higher-priced health plans, but also potentially from more people remaining without insurance altogether. A state panel charged with overseeing the new law must decide whether the health plans that Massachusetts insurers come up with represent affordable, quality coverage for those who must buy insurance on their own without subsidy. If the board finds there are no reasonable options available, it can lift the mandate that they buy coverage—and the penalties for not doing so.

The degree to which the plan can serve as a model for other states is itself a matter of some disagreement. Leif Wellington Haase, health care fellow at the liberal-leaning Century Foundation, says other states may find the road to coverage-for-all much tougher than will Massachusetts, which starts out with a much lower percentage of uninsured residents (11 percent) than most states.

Nonetheless, The Wall Street Journal, whose editorial page took a dim view of the plan (derisively dubbing it “Romney Care”), reported in May that several states were taking cues from the bipartisan Bay State prescription.

A month after the April signing of the Massachusetts law, Vermont’s Republican governor and its Democratic Legislature agreed on a plan to subsidize coverage for lower-income residents, funded in part by an increase in the tobacco tax and assessments on employers not providing health coverage. A spokesman for Gov. James Douglas told the Journal, “If Ted Kennedy and the overwhelmingly Democrat legislature in Massachusetts can come to an agreement with a Republican governor around the idea of private insurance plans, then Vermont should be able to do it, too.”

For Kennedy, the harsh words from some of his usual liberal allies are something he has become accustomed to, at least occasionally, during his more than 40 years in Washington. He faced similar brickbats when he signed on to President Bush’s No Child Left Behind Act (though Kennedy has since become critical of the funding—or lack thereof—to support it) and for working with the administration to push through prescription drug coverage for Medicare recipients. Despite his reputation for unyielding liberalism, Kennedy has often shown himself to be a pragmatist at heart, more than willing to take half a loaf over none.

“What the senator has said is that with any major reform there comes some compromise,” says Kennedy spokesman Melissa Wagoner. “What Massachusetts has done is take a huge step forward.”