Oct. 28 (Bloomberg) -- Massachusetts Governor Deval Patrick said U.S. government efforts to overhaul health care won’t be able to follow his state’s blueprint for universal coverage unless costs are controlled at the same time.

Unlike the Massachusetts plan, which focused first on getting residents to sign up for insurance and only now is turning to cost containment, federal legislation must include measures to trim medical costs if it wants to garner and keep public support, Patrick said in an interview today in Boston.

The 2006 Massachusetts law, with its combination of public and private insurance programs, has reduced the number of uninsured to 2.6 percent of its population, the lowest rate in the nation, according to the U.S. Census Bureau. At the same time, per capita health spending in Massachusetts is projected to double from 2009 through 2020, according to a June report by the state. The Massachusetts plan has served as a template for President Barack Obama’s federal overhaul effort

“We did access before costs,” Patrick, 53, said. A federal plan “will have to do it at the same time.”

Patrick said he has been in close contact with the White House and the U.S. Department of Health and Human Services during the health-care overhaul push, advising them on how to “engage the private market and get them to play fair,” the governor said.

Because of costs, Massachusetts hasn’t solved the problem of guaranteeing access to health care. Even residents with coverage can’t afford medical treatment because of co-payments and the charges that insurance doesn’t cover, according to a September 2009 report by the Kaiser Family Foundation with headquarters in Menlo Park, California.

Rising Premiums

Private insurance premiums in the state rose more than 12 percent through the end of 2008, according to an Oct. 21 report in the New England Journal of Medicine co-authored by Massachusetts Health and Human Services Secretary JudyAnn Bigby. The cost of buying insurance increased 10 percent so far this year, the report said.

Price increases like these put pressure on the finances of businesses that provide insurance to employees, workers who pay part of that cost and individuals who buy their own coverage.

“President Obama is a visionary and he’s going to use Massachusetts as an example of how his ideas might play out,” said Regina Herzlinger, an economist at Harvard Business School in Cambridge. “But Massachusetts is a wealthy state and it can afford things that other states cannot. And even now Massachusetts is having trouble.”

The state reduced subsidies for coverage of 31,000 legal immigrants to help close the state’s budget deficit, cutting out certain services and increasing co-pays for some.

Can’t Be ‘Scaled Up’

Patrick said he doesn’t know whether the Massachusetts model can simply be “scaled up” as a national plan.

“We had advantages,” he said. “We had a relatively small uninsured population. The impact on the budget is different. They may need something more aggressive.”

Massachusetts is now beginning to tackle cost. In July a commission recommended the state consider moving to a system that would bundle medical costs on a per capita basis rather than have providers charge for each service.

That proposal has already met with criticism from experts such as Herzlinger who point out that California had “disastrous” results with that payment model in the 1990s.

“Payment reform will move gradually -- emphasis on the gradual,” Patrick said. The one exception may be an attempt to mitigate cost problems plaguing small businesses by allowing them to pool risks and perhaps reduce premiums, he said.

Public Option Supported

The governor said he supports a public option similar to what is being discussed by Congress. The public option proposal to create a U.S. plan to compete with private insurers can help lower costs, he said.

To achieve a 97.4 percent coverage rate, Massachusetts required all residents over the age of 19 to purchase insurance, if “affordable” coverage was available, or face a $912 tax penalty.

The state expanded MassHealth, the state’s Medicaid program, to cover children living at 300 percent of the federal poverty level, and started Commonwealth Care, a subsidized insurance plan for low-income adults who individually earned less than $32,508 a year or $66,168 for a family of four in 2009.

The state also created the Commonwealth Health Insurance Connector, an exchange offering individuals and small businesses access to less expensive private insurance options.

The system is complex, and “residents with fluctuating incomes and employment statuses can fall through the cracks,” even though they would still qualify for subsidies to help pay for insurance, the Kaiser Family report said.

“While health reform is very popular in Massachusetts, there’s no doubt cost is on everyone’s mind,” Patrick said.

To contact the reporter on this story: Pat Wechsler in New York at pwechsler@bloomberg.net

Last Updated: October 28, 2009 15:13 EDT