Massachusetts' health care plan: 6 years later

Romney signs into law a health care reform bill during a ceremony at Faneuil Hall on April 12, 2006 in Boston, Massachusetts. U.S. Sen. Edward Kennedy (D-MA) and others joined the then-governor for the signing of the bill, which made Massachusetts the first state in the country to require all residents to have health insurance. Romney has in recent months taken heat by Republicans for the legislation, which has been likened to President Obama's health care reform law.
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Updated 11:15 a.m. ET

(CBS News) BOSTON - Six years ago, when Mitt Romney was still governor of Massachusetts, he called his health care reform promising health insurance to all residents of his state "a giant leap forward."

His goal, articulated at the bill signing ceremony at Faneuil Hall on April 12, 2006, was "every citizen with affordable, comprehensive health insurance."

The trigger to achieving that was imposing an individual mandate that requires every citizen of Massachusetts to obtain coverage or face fines.

As a result, the state went from 90 percent of its residents insured to 98 percent, the highest rate in the nation.

While two percent of Massachusetts residents are still not covered, that compares favorably to the national average of 16 percent uninsured.

The Obama administration cited Massachusetts as a model for the 2010 Affordable Care Act, which had an individual mandate at the heart of its Supreme Court review.

Though Romney opposes the Obama health reform, Romney defended the mandate as a personal responsibility during his first campaign for the Republican presidential nomination.

"We said, look, if people can afford to buy it, either buy the insurance or pay your own way. Don't be free riders and pass on the cost of your health care to everybody else," Romney said in a televised debate before the 2008 New Hampshire primary.

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MIT economist Jonathan Gruber, who advised both Romney and Obama on their plans, says insurance companies supported the reforms in both instances, because they were guaranteed more customers, particularly young and healthy people who were among the most likely to be uninsured.

"The idea of the mandate was to bring those healthy people into the pool, thereby bringing those prices down, and making health insurance affordable for everyone," Gruber said. "If you want to tell insurers, 'You can't charge the sick more than the healthy,' you have to tell insurers, 'Don't worry, the healthy will still buy insurance.' Those two have to go hand in hand."

Gruber likes to describe Massachusetts reform as a three-legged stool. The first leg was ending discrimination in insurance premiums, fulfilled by the second leg -- the mandate. The third leg was government subsidies to make a mandate feasible.

"The key thing about the mandate is to remember no one is mandated to buy something they can't afford," Gruber said.

At left, watch part one of two part series on Massachusetts' health care program on the "CBS Evening News." Watch part two above.

Of the 439,000 previously uninsured Massachusetts residents who obtained insurance after the reform became law, 83 percent did through publicly-funded programs, such as Commonwealth Care and MassHealth. Federal Medicaid funds underwrite about half the state's cost. Residents may choose plans from eight providers.

Andrew Herlihy, 29, a school program director in Malden who works as an independent contractor for the city's public schools, did not have health insurance in his early 20's and didn't think he needed it.

"I was always that guy who could dunk and was invincible, never got hurt in my life," Herlihy said. Then he blew out his knee playing basketball. After one hospital bill and the mandate lurking, he decided to enroll in a subsidized plan that now costs him $272 a month.

"Worth its weight in gold, worth every penny, to me," Herlihy said.

A few knee mishaps later, the operation he eventually needed cost $30,000, a cost he was spared because of insurance.