The Real Romney

by Kranish, Michael

  Despite some aides’ skittishness, no one in Romney’s inner circle was expressly opposed to a mandate when they gathered for the late-spring meeting. Romney himself was disposed to favor it but not ready to commit to it. Among other things, he was looking for a suitably spotlit setting in which to make his case, and one was coming up. He was to deliver a major speech on June 21, 2005, to a health care summit at the John F. Kennedy Presidential Library. As with most of his decisions, his final verdict on whether to include an individual mandate remained a closely held piece of information until the time was ripe.

  Twelve days before the event, Andrew Dreyfus, who was then president of the Blue Cross Blue Shield of Massachusetts Foundation, was busy taking the temperature of those whose support any reform plan would need. He visited Murphy’s office and told him he was assembling a chart, putting a mark next to each component of health care reform supported by the various players, including Romney and the legislature. Murphy balked when the individual mandate came up. The day before the summit, Dreyfus telephoned Murphy, again looking to fill in the blank. “What about the individual requirement?” Dreyfus asked. “There was some good silence on the phone,” Murphy said. “I mean, it was supposed to be embargoed until the governor spoke.” Murphy told him to put it in.

  Romney delivered his speech, publicly backing an individual mandate for the first time. He told reporters afterward, “No more free riding, if you will, where an individual says, ‘I’m not going to pay, even though I can afford it.’ ” He called it “the ultimate conservative idea,” saying that people “don’t look to government to take care of them if they can afford to take care of themselves.” The reaction, in a harbinger of what would unfold over the coming years, was mixed, with many cheering the governor’s chutzpah while voicing skepticism about requiring individuals to buy health care insurance. It was a huge step, even bigger than Romney understood at the time. And it was a bold one, the first in a furious debate that would consume state government and industry for months. Doctors, hospitals, insurers, researchers, business groups, advocates—just about every player in the vast medical-industrial complex in Massachusetts would be affected. Romney had stirred the pot, and stirred it with force. Everybody, from family doctors in rural towns to Republican opinion leaders in Washington, D.C., was anxious to see how the experiment would turn out.

  The individual mandate was the biggest headline grabber, but there were other novel elements Romney and his team baked into their plan. They proposed using the state’s threatened Medicaid money and much of the funding allocated to “free care” at hospitals to create a new subsidized insurance program for the working poor. Tim Murphy had a “eureka moment” after a meeting with officials of the Heritage Foundation, embracing their concept of a so-called exchange to provide one-stop shopping for small businesses and individuals seeking health coverage from commercial insurers. The goal was to create a health care marketplace driven by consumer choice, which had long been a bedrock principle of conservative thought on health care. That, too, would prove to be a forerunner to Obama’s national plan.

  If any state was going to figure out universal health care, Massachusetts had perhaps the best chance. As Romney’s own review of the data had made clear, the state’s percentage of uninsured residents was already among the lowest in the nation, because a higher percentage of employers offered coverage to workers than the national average. Massachusetts, too, was one of the few states in the country that had a pool of funds to pay for treatment of the uninsured at hospitals and health care centers. It was also one of only a small number of states that barred insurers from denying coverage or jacking up premiums based on people’s health histories. And there was a long and deep institutional memory. Many local health care players had been down a similar road before and understood the possibilities and the pitfalls. The executive ranks of insurers, major health care providers, and business associations were marbled with veterans of past efforts to expand coverage, efforts that had fizzled in a hostile environment. But by the time Romney took office in 2003, the climate had changed, thanks in part to the foundation laid by a prior Republican administration, which had pushed hard to rein in Medicaid costs.

  As Romney’s team was assembling its plan, business leaders were mobilizing on another track. Leading the way were top officials of the state’s largest insurer, Blue Cross Blue Shield of Massachusetts, and Partners HealthCare, a powerhouse provider network with nine hospitals—including two of the world’s best regarded—and about 5,500 physicians, or roughly one-fifth of all doctors practicing in the state. The chief executive officer of Blue Cross, William C. Van Faasen, joined forces with John “Jack” Connors, Jr., the chairman of Partners. They supported expanded coverage, but their motives were not entirely altruistic. In exchange for their support, they wanted the state to increase substantially the long-lagging rate at which it reimbursed providers for treating Medicaid recipients, a major source of hospital revenue.

  Mindful of the errors of the Dukakis reform drive of the 1980s, the Partners–Blue Cross alliance was determined to create a united front within the state’s business community. Van Faasen and Connors, an advertising executive and one of Boston’s business and civic leaders, approached John Sasso, a longtime Democratic political operative, to quarterback that effort at the statehouse. Sasso, who had been Dukakis’s chief political strategist, had deep Democratic connections and a track record of getting big, complicated things done. He came with a national reputation, trusted by many Democratic heavyweights. He was also unfailingly discreet. But he faced an obstacle: he didn’t know Romney and had no lines into his inner circle. Connors suggested Joseph J. O’Donnell, the region’s undisputed king of local sports and entertainment venue concessions, who, like Connors, knew just about everyone but was also a great admirer of Romney, a friend and neighbor in Belmont.

  O’Donnell warned Sasso that Romney harbored a grievance against him: Sasso had played a role in the negative attacks on Romney in the 1994 Senate campaign against Ted Kennedy. In a Globe op-ed piece after the 1994 election, Romney had written, “I’ve got to admit it was first-class work. Ted’s top campaign strategist, John Sasso, had learned his lesson well from his 1988 Dukakis campaign drubbing by Lee Atwater.” O’Donnell set up the meeting. When the three sat down, he told Romney he trusted Sasso. It was awkward and a little tense at first, but they soon put past unpleasantness aside. “This was talking about policy, not politics,” Romney said. “[Sasso] said, ‘Look, my clients . . . think we can work together on this.’ ”

  If Sasso was one unlikely Romney ally, Kennedy was another. The two former rivals had fought over health care in their 1994 Senate campaign, but they had since proven they could work together, with Kennedy supporting the Mormons’ bid to build a temple spire in Belmont and the two leaders working together to stave off military base closures in the state. Now it fell to Romney and Kennedy to win federal approval to save the endangered $385 million in annual Medicaid funding, a linchpin of any broader plan for health care reform. Romney and Kennedy went to Tommy G. Thompson, then the U.S. secretary of health and human services, seeking the federal government’s blessing. On January 14, 2005, one of Thompson’s last days in George W. Bush’s administration, Romney, Kennedy, and their aides met with him and his staff for about two hours at the Hubert H. Humphrey Building in Washington, finally reaching an agreement. “I was never absolutely sure whether at the very end [Thompson] was going to sign it,” Kennedy said later. As they worked out the details, they could hear the sound from Thompson’s retirement party a floor above. “People kept coming down, saying, ‘Everyone’s at your party, waiting for you,’ ” said Stacey B. Sachs, Kennedy’s top health care aide. “The next thing I knew, we were all heading up to the party.” Romney and Kennedy were “kind of a riot on the stage, going on about being the odd couple,” Sachs said. It was the first time they had shared a stage since debating in their 1994 campaign.

  Kennedy’s support of the Massachusetts he
alth care law would later provide fodder for Romney’s conservative political opponents, and Romney, under the glare of such scrutiny, would wrestle with how to discuss Kennedy’s involvement. But most of Romney’s critics exaggerate Kennedy’s role. Some have even suggested that the legislation’s success was the product of “a deal” between the pair. There was no deal. Neither Kennedy nor his staff was directly involved in writing the bill. Kennedy did, though, play a consequential role in providing cover for Democrats wary of cutting a deal with a Republican governor. He also helped move Robert Travaglini, the Senate president, and Salvatore DiMasi, the House speaker, to resolve a stalemate over competing versions of the bill. Kennedy made a “strategic decision” to support Romney once he became convinced that the governor was serious about extending coverage, Sachs said. “Everyone expected Kennedy to come out screaming, but he said, ‘This looks pretty good, and if he’s willing to work for this, let’s work with him.’ People wanted to be against it because it was Romney’s, but because Kennedy came out in favor, they had to bite their tongues.”

  DiMasi and Travaglini were both barrier breakers, becoming the first Italian Americans to rise to the leadership of their respective chambers. They had both spent their lives in tight-knit Boston neighborhoods, separated by the city’s inner harbor. And they were both savvy Democratic lawmakers who had devoted years to learning the mysteries, rites, and mores of the statehouse. But despite their close relationship, the speaker and the Senate president had developed colliding visions of what health care reform should look like. And as their dispute rumbled on, it threatened to derail the whole thing. Romney, fearing that his big push would amount to nothing, grew nervous.

  For even though Romney was driving the health care debate, he knew well that he could do nothing on his own. He needed the House and Senate. And he knew that each would want to put its own stamp on such a watershed bill. The House and Senate versions shared some elements, but there were fundamental disagreements about how far the state should go toward universal coverage and how it would get there. DiMasi, for example, was adamant that any plan include a payroll tax on employers that did not offer insurance, a position shared by many liberal activists but not by Travaglini. And Travaglini initially favored a bill more narrow in scope. “It didn’t go as smooth as silk,” Romney said. “There were some real tough times.”

  Romney knew he wasn’t the guy to be walking the hallways twisting the arms of lawmakers or trying to broker deals. Unlike his Republican predecessors, he had never enjoyed chummy relations with the Democratic legislature. So with the stakes so high, he wisely left most of the grubby horse trading to others. “Romney knew his best chance to get it passed was to be not too visible in the process,” said Alan G. Macdonald, one of the business leaders active in the negotiations. But as negotiations wore on and the legislature remained deadlocked, Romney grew more fearful the effort would collapse. In early December 2005, Kennedy weighed in publicly, endorsing none of the competing versions but making clear that he supported the individual mandate Romney had proposed if it was part of a broad agreement. “I’ve never been one for individual mandates in the past, but I do think that the way this has been proposed, in that everybody will do their part, that’s a compromise,” Kennedy said. “I can buy into that.” Still, the Travaglini-DiMasi standoff continued. The state missed a January 15, 2006, deadline to get a plan to Washington. Twelve days later, a Friday, talks broke down. The next day, Tim Murphy was out shopping when his BlackBerry buzzed with an e-mail from Romney’s personal account. The governor had a personal letter he wanted to deliver to DiMasi and Travaglini, to get the bill back on track. “The plane is circling,” Murphy quoted Romney as saying. “And we have to land it.”

  On Sunday, Romney, who had never pushed this hard for a bill, tried an unusual tack: he showed up at the legislative leaders’ homes. DiMasi wasn’t there, so Romney taped the letter on his door. Travaglini, in a sweatsuit and slippers, was. He invited Romney in. Romney made his pitch, warning of the impending loss of the precious federal funds if they did not resolve the matter soon. They talked for about five minutes. “How often does the governor ring your bell on a Sunday morning?” Travaglini recalled with a laugh. About two weeks later, Romney invited DiMasi to his office for a rare one-on-one meeting, according to DiMasi. Romney, always unflappable, was agitated, DiMasi said. “He did everything he could to put pressure on me to change my position on the business assessment. I tried to walk out, and he wouldn’t let me go out the door. I actually opened the door, and he said, ‘No, no, no. Get back in here. I have to talk to you.’ ” This was a side of Romney that was new to DiMasi. “He was very animated,” DiMasi said. “It was the first time I’d seen it.” When he left, the matter remained unresolved.

  The group of business leaders, meanwhile, was ready to yield on a penalty for employers that did not offer coverage. On March 1, 2006, at his office in the John Hancock Tower above Boston’s Copley Square, Jack Connors convened a high-powered group of executives from the four big business associations, Partners HealthCare, and Blue Cross Blue Shield. They discussed a proposed compromise, which called for an annual “fair share contribution” of $295 per employee from businesses with eleven or more employees that did not offer coverage.

  The next night, DiMasi and Travaglini made peace, dining with their wives in Boston’s Italian neighborhood, DiMasi’s own North End. DiMasi’s wife, Debbie, and Travaglini’s wife, Kelly, also friends, had arranged the meeting to clear the air. “When communication broke down between the two of us, our wives may have overheard us describing each other in vulgar ways,” Travaglini said. “Maybe around the third bottle of wine,” he added with a chuckle, “things got a little clearer.” On March 3, the day after their makeup dinner, DiMasi and Travaglini met with the business leaders at a closed-door session at the State House. They emerged with a resolution on the final sticking point: The bill would impose the $295-per-worker assessment. With that, the legislation was ready.

  More than three years had elapsed since Tom Stemberg nudged Mitt Romney to tackle universal health care. Many more years had passed since the state’s last attempt at it. But now Massachusetts was finally on the precipice. And Romney, who had invested whatever political capital he had left, was a big reason why. He was jubilant. “Today, Massachusetts has set itself apart from every other state in the country,” he said, beaming, after lawmakers publicly unveiled the bill. “An achievement like this comes once in a generation.” Romney stopped by DiMasi’s and Travaglini’s offices before his press conference to thank and congratulate them.

  Given Romney’s reticence about penalizing employers, his rhetoric on that issue caught the press corps by surprise. Asked if there were any parts of the bill he would veto, he said he still needed to review it all but, “We are where we’d hoped we’d be.” Didn’t he consider the penalty on employers a tax, as antitax activists did? And hadn’t he pledged to veto any taxes? “It’s not a tax hike,” Romney responded. “It’s a fee. It’s an assessment.” Businesses and workers who purchased health insurance already paid an assessment to help fund the “free care” pool, he noted, and “it makes sense to expand this assessment.” As the press conference wore on, Romney reserved his right to review closely the employer assessment and other elements that had been added by the Democratic legislature. But his tone throughout signaled that he had no major objections. Toward the end, he was asked again: was he really okay with the new employer penalty? Romney said he was relieved that what he had feared most—a new, broad-based payroll tax on employers—was not in the plan. That was something, he said, that he “definitely would have been unable to sign.” “This,” he continued, “is of a different nature.”

  The next day, April 4, the bill sailed through the House and Senate with virtually no opposition. They called it “An Act Providing Access to Affordable, Quality, Accountable Health Care.” A signing ceremony was set for April 12, 2006, at Boston’s historic Faneuil Hall. Romney and state lawmakers k
new they had done something big. The bipartisan bonhomie did not last long, however. The day before the ceremony, Romney published an op-ed in The Wall Street Journal whose cheery title—“Health Care for Everyone? We Found a Way”—masked a last-minute shift. His “Democratic counterparts,” he wrote, had added a $295-per-person fee on employers that refused to help cover their workers. The same fee he had seemed comfortable with just a week earlier he was now labeling “unnecessary and probably counterproductive.” He promised to “take corrective action,” which meant a veto. Democrats felt sandbagged. This was a compromise that had been carefully worked out among many parties, including the business community. It would not raise a huge amount of revenue—$45 million was the estimate, and even that has proven to be overblown. But the principle was important to many involved in crafting the bill: employers had to put some skin into the game, too.

  Right before the April 12 signing ceremony began, Romney aides announced in a press release that he was vetoing 8 of the 147 sections, including the employer mandate. There was little risk to Romney, who knew that the legislature would easily override him, as it did three weeks later. He could thus claim a large share of credit for the new law while washing his hands of something resembling a tax, which was problematic with the national Republican audience he was now courting heavily. But his eleventh-hour rejection of the employer mandate tainted the celebratory mood. DiMasi was outraged. Travaglini, however, said he wasn’t surprised and didn’t particularly care, because he knew the legislature would override Romney anyway. “It didn’t bother me,” he said, “because I had the votes.”