Study: Romneycare Didn't Increase Hospital Costs

The study says the policy had 'little impact on health care use.'


Then-Massachusetts Gov. Mitt Romney reacts after signing into law his landmark health care bill, which one study finds reduced the number of uninsured without increasing hospital costs.

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According to a new analysis, health care reform in Massachusetts, popularly known as "Romneycare," didn't cause hospital use or costs to increase, even as it drove down the number of people without health insurance.

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Implemented by the state in 2006, and signed by then-Gov. Mitt Romney, the reform is looked at as a model for the Affordable Care Act, also known as "Obamacare," the sweeping and controversial health care law that Republican lawmakers in the House tried to repeal for the 37th time Thursday.

Amresh Hanchate, an economist with the Veterans Affairs Boston Healthcare System and lead author of the study, which he presented Thursday at an American Heart Association conference, says that the results of the study were surprising.

"In light of the [Affordable Care Act], we wanted to validate concerns that insurance reform would lead to dramatic increases in health care use and costs," he says. "We were surprised to find little impact on health care use. Changes we saw in Massachusetts are very similar to those we saw in New Jersey, New York and Pennsylvania – states without reform."

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When it was implemented, about 8.4 percent of Massachusetts citizens were uninsured; by 2010, just 3 percent were uninsured. Uninsured rates fell most among minorities: In 2006, 15 percent of African-Americans were uninsured, in 2010, that rate was at 3.4 percent. Uninsured rates for Hispanics in the state fell from 20 percent to 9.2 percent during the same period.

While Romneycare appears to be a success in Massachusetts, Hanchate says that it's difficult to say whether health care costs would rise nationwide once most of Obamacare's provisions, including one that would charge a tax to those who don't purchase health insurance, kick in on Jan. 1, 2014.

"We focused our study on Massachusetts because the reform is very similar to what the Affordable Care Act will be," Hanchate says. "But in terms of what it'll mean, we're just speculating because Massachusetts already had a low percentage of people who were uninsured."

The Centers for Disease Control estimates that about 18.2 percent of Americans under the age of 65 are uninsured.

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Hanchate's study was also only able to look at inpatient hospital costs, not standard outpatient visits to general care providers, an omission which he admits could skew the numbers.

"The big benefit of having an insurance card is that you can see a primary care physician. With inpatient care, you can still walk into an emergency room even if you don't have insurance," he says. "But unfortunately, outpatient data doesn't exist. There are laws that require hospitals to submit information for every hospitalization to the state. There's no such mechanism for outpatient centers, so we're a little bit constrained there."


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