Beacon Hill’s Magical Mystery Medicaid Savings

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As the Senate and House work to reconcile their respective versions of the 2012 budget, I wanted to take one last opportunity to highlight the unrealistic assumptions that are being used for the MassHealth (Medicaid) program. If the state is unable to achieve these “savings” and instead follows historic spending trends, it could be looking at a $900 million gap. See graph here.

A recently released report from The National Governors Association and the National Association of State Budget Officers “The Fiscal Survey of States” contrasts Massachusetts’s projections to the 49 other states and Puerto Rico.

Annual Percentage Medicaid Growth Rate (p52)

Gov Medicaid table top

Gov Medicaid table

The average percentage Medicaid growth rate is 18.6 across the nation, Massachusetts will be 0.5%?

First introduced in the Governor’s budget, both chambers followed his lead to include close to $1 billion in “savings” to decrease spending on the program. The most certain of the cuts–reductions in reimbursements rate to providers– may be in jeopardy given recent comments from the Obama Administration.(See my blog on the issue here) However, reducing reimbursements rates only exacerbates the access problem Medicaid patients face to find a doctor that will take their insurance.

Locally, press accounts have documented individuals calling up to 20 doctors from a MassHealth list before they can schedule an appointment. Fifty-six percent of Massachusetts physicians are no longer taking new patients, pushing more people into emergency rooms. In Massachusetts, 55 percent of ER visits covered by Medicaid were considered preventable.

We are slowing moving towards a two-tiered health care system, with Medicaid participants trapped in a medical ghetto. I have outlined more issues with the program in a recent op-ed.

The financial issues with the MassHealth program will lead the Legislature to falsely claim a balanced budget, and forced them to return mid-year to fund a likely MassHealth gap. Last year they did to the tune of almost $700 million.

Simple put, it is time to be honest about the cost of the program and discuss meaningful reform.