BOSTON, April 12 EIn a ceremony full of pomp and political backpatting, Gov. Mitt Romney signed Massachusetts' landmark health care legislation Wednesday, setting the stage for the state to be the first to provide health coverage to virtually all of its citizens.
But the celebratory atmosphere was accompanied by some friction because Mr. Romney, a Republican, vetoed a provision some Democrats and health care advocates adamantly support: a requirement that employers who do not provide health insurance to their employees pay the state up to $295 per worker each year.
Leaders of the overwhelmingly Democratic legislature, which passed the bill last week, said they expected to override that veto in the next few weeks and were examining Mr. Romney's vetoes of seven other less controversial provisions.
The signing ceremony, complete with fife and drum corps, was held in the historic Faneuil Hall before 300 ticketed guests. Speakers included Senator Edward M. Kennedy, Democrat of Massachusetts, who last shared the Faneuil Hall stage with Mr. Romney in 1994 at a debate in Mr. Romney's unsuccessful campaign for Mr. Kennedy's Senate seat. Now, Mr. Romney is considering running for president in 2008, and the success of the bipartisan health care plan could become a major selling point of his candidacy.
The event reflected only a shade of the political distance between Mr. Romney and the state's Democratic lawmakers. Representative Salvatore F. DiMasi, the speaker of the House, chided Mr. Romney for his line-item vetoes, saying: "Governor Romney, if you change anything, you will disturb the delicate balance that made this law possible. Every element is critical to accomplishing this law's goals."
Mostly, however, the tone was congratulatory.
"This isn't 100 percent of what anyone in this room wanted," Mr. Romney said. "But the differences between us are small."
Mr. Kennedy said, "You may well have fired the shot heard round the world on health care in America. I hope so."
The law is projected to provide coverage for about 515,000 of the state's 550,000 uninsured people and leave less than 1 percent of the population uncovered. It goes further than those of any other state.
It requires residents to obtain health insurance by July 1, 2007. People who can afford insurance and do not buy it will be penalized on their state income taxes.
The law takes the $1 billion in the state's free-care pool, which paid for medical care for patients without insurance, and uses it to subsidize insurance for people who cannot afford it. The legislation also makes it possible for more individuals and businesses to buy insurance with pre-tax dollars, saving them money. And it includes a system to encourage insurance companies to provide more affordable plans with fewer benefits or higher deductibles.
Several details have yet to be worked out, and questions remain about whether enough affordable plans can be created to allow everyone to afford coverage.
The law also expands some Medicaid coverage, including coverage for children. Mr. Romney vetoed a provision that reinstated dental coverage for adults, saying it would cost $75 million a year and was a benefit not provided by most employers.
The legislation, months in the making, almost fell apart over disagreements about whether businesses should be charged and how much if they were. Mr. Romney wanted no business fee. Mr. DiMasi wanted a much higher business assessment of 5 percent of a company's payroll, but Senator Robert E. Travaglini, a Democrat who is president of Senate, was against any business contribution because he worried that it would adversely affect the economy.
Mr. Romney said in an interview last week that the bill's charge of $295 per worker, which would yield about $48 million a year, was "not necessary for funding" the law. He also said that $295 was "such a small figure," much less than the cost of insurance, "that it doesn't have any significant incentive value" to encourage companies to insure their workers.
On Wednesday, Mr. Romney told reporters, "There were many businesses that have been flooding my office with calls as well as business associations that were very concerned about it," adding, "There's no reason to put an extra charge on certain employers."
But several health care advocates and some hospital and business leaders said Wednesday that the fee was fair and reasonable. Mr. DiMasi, in an interview last week, said: "I see a significant commitment of businesses to contribute in some way to the insurance costs of the uninsured. I see this as a significant principle, whatever the dollar figure is."
Mr. Romney said the law would be "a big part of the legacy I will have personally for my four years of service as governor."
"But," he added, "I have no way of telling if it's going to be a help or a hindrance down the road."