Governor Patrick’s Budget on Health Care: Playing Around the Edges

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Budget Review

Medicaid (MassHealth)

The Administration is feeling the heat with the increase in Medicaid (MassHealth) spending. Without a doubt something needs to be done—as spending now accounts for almost 40% of the overall budget. That’s less money for schools, for cops, and for roads.

I, among others, think the Administration is being too optimistic on how much they can save by tweaking things on the edges. Will they really get almost $10 billion from rebidding Medicaid contracts?

The budget grants the MA Secretary of HHS authority to change benefits and eligibility in MassHealth when possible— however her actions are restricted by the many constraints placed on the state by the federal government in the stimulus and Obamacare. 33 Governors sent a letter to the federal HHS asking for greater flexibility on Medicaid because it is killing their budgets. Keep in mind that MA is currently much higher as a % of our budget spent on Medicaid compared to these other states. The national average is closer to 21%.

The Administration mentions undertaking “several other steps such as constraining provider and capitation rates” to contain costs– in other words $150 million in rate cuts for hospitals and other providers . This will only decrease access for patients as fewer doctors accept Medicaid patients, provides an incentive for doctors to run more tests to make up for the lower rates of reimbursement OR for hospitals to charge more to make up the difference from those coming in with commercial insurance.  

It is time the Governor and his staff seriously consider a global waiver application for Medicaid, following in Rhode Island’s footsteps.

Other items that drew my eye were:

Commonwealth Care Bridge Program Reauthorization

To cover health insurance for legal immigrants. The cost for 5-months this year was $20 million. Now the Administration has set aside $50 million for a year, and if that is not enough money, they will drop that money into the Health Safety Net Trust Fund (also known as the uncompensated care pool)–a fund that was supposed to be shrinking under the landmark health reform law. The Trust fund remains  over $400 million a year, and the budget includes a $30 million transfer from the General Fund. This is heading in the wrong direction.

Allow the Medical Security Trust Fund to Run a Deficit

The trust pays for health insurance coverage for individuals with incomes less than 400% of the federal poverty line on unemployment. Funding for the Trust has never kept pace with inflation, and money has been taken out for other purposes.  Because the duration of time individuals can collect unemployment benefits has been extended, and employer contributions are insufficient to meet this demand and persistent unemployment high, this portion of the state’s health care safety net is on the brink.