Getting to yes on MassHealth

State leaders need to work together to tackle Medicaid challenge

MASSACHUSETTS HAS A unique culture when it comes to health care.  Over the last quarter century, we have seen the business, provider, payer, consumer, and academic sectors come together to advance reforms aimed at expanding coverage and containing the cost of care.

Whether it was repeal of hospital rate-setting and passing insurance reforms in the 1990s, or the 2006 the passage of Romneycare, or major cost control legislation enacted in 2010 and 2012, stakeholders across the board have had a seat at the table.

Consensus may not be the right goal in all cases, but given the way it has careened from one extreme to the other on health care in recent years, Washington could likely benefit from the modus operandi that has characterized Massachusetts health care reform.

That is, until very recently.

Medicaid, known as MassHealth, consumes 43 percent of our state budget, with enrollment in the program rising from 1.3 million in 2011 to 1.95 million in 2017. Each year, the high cost of health care rises at MassHealth and in the private sector.

Earlier this year, the Baker administration floated proposals for cost containment in private markets and additional fees on businesses to help pay for a predicted MassHealth shortfall.  The proposals were vigorously opposed by small businesses and providers.

As a result, the Legislature asked the administration to develop a comprehensive package that could be supported by health care advocates and the business community. Baker’s proposal included, among other features, $200 million in new employer taxes for two years, with the bulk of the burden falling on companies that have non-disabled workers who access MassHealth rather than employer-based health plans. The proposal called for additional assessments on employers and slowing the rate of increase in unemployment insurance costs to make the proposal less onerous for businesses.

As part of its plan, the Baker administration proposed closing MassHealth to those who have access to affordable coverage through their employers, but offering them premium assistance. In addition, it proposed a five-year moratorium on mandated benefits; required publicly available prices for common procedures and expanded the scope of practice for nurse practitioners, optometrists, and podiatrists. Finally, it sought to transfer 140,000 lower-income, non-disabled adults from MassHealth to the state’s Connector exchange.

The package as a whole was acceptable to the business community. Health advocates were supportive of the fees but opposed to the market reforms and the transfer of individuals to the Connector out of concern for co-pays, deductibles, and the loss of dental benefits.

On July 7, the Legislature passed the business tax pieces of the Governor’s proposal, but none of the reforms.  The governor has until July 17 to sign or veto the budget.  Business leaders are crying foul as they agreed to new taxes only as part of a full package of reforms.

This also places the administration in a conundrum unworthy of the way the Commonwealth has tackled difficult health care problems.

Meet the Author

Meet the Author

Barbara Anthony

Senior Fellow, Pioneer Institute
The governor’s proposal may not be a panacea for all that ails our public and private healthcare systems. But it is, at a minimum, a worthy starting point for reforms in the public and commercial health care sectors.  These issues are complicated, but no more complex than ones on which Massachusetts has previously grappled with and forged consensus.

The Legislature should work with the executive branch and stakeholders to move the conversation in a constructive direction. That’s how Massachusetts has tackled difficult health care issues in the past. It’s a good path, and we should stay on it.

Barbara Anthony is a senior fellow in health care and Jim Stergios is executive director at Pioneer Institute, a Boston-based think tank.