THE STATE’S MEDICAID program is experiencing a big increase enrollment, with officials worried about its long-term impact on state finances.
MassHealth, the state Medicaid program, is meant to cover the lowest income individuals in Massachusetts but in fact, it covers more than a quarter of the state’s population.
Secretary of Health and Human Services Marylou Sudders testified at a budget hearing before the House and Senate Ways and Means Committees on Wednesday that the MassHealth caseload increased by 9.2 percent since March, or 161,000 individuals. There are now more than 1.9 million people enrolled in the program, the highest number since 2016, and Sudders expects that figure to reach 2 million in fiscal 2022.
This is likely due to people becoming newly eligible for Medicaid during the pandemic as they lose jobs, income, or access to employer-sponsored health insurance. Under federal rules, Massachusetts is also not allowed to conduct redeterminations – assessing whether someone has lost eligibility for MassHealth – during the pandemic.
Sudders said the administration is not proposing any changes to benefits or eligibility this year, because of the important role government plays in people’s lives during an uncertain time. “This is the time when state governments are really important in terms of the safety net for individuals,” Sudders said.
But notably, Sudders did not rule out eligibility or benefits changes in future years – and implied that they may be necessary. “We may have to make together some hard choices about what are really good things to have…when we have good days financially and what are things we absolutely have to have in order to ensure a safety net,” Sudders said.
The Baker administration projects MassHealth spending of $18.2 billion in fiscal 2021, which is a 7.3 percent increase from fiscal 2020 and 10 percent more than was anticipated in Baker’s January budget proposal.
Utilization of health care by MassHealth members was down 15 percent in January through August 2020, compared to the same period in 2019, due to the shuttering of doctors’ offices to non-emergency care in March and April. But utilization is expected to resume and tick up again through 2021.
The state can pay for the increased costs this year because of enhanced reimbursement rates by the federal government during the pandemic, which are expected to net $1.1 billion in federal dollars for MassHealth in fiscal 2020 and 2021. But the enhanced reimbursement rate is set to expire at the end of March 2021, although the federal government could extend it.
Without the increased federal reimbursements going forward, Sudders said, “The fiscal cliff for MassHealth in 2022 is significant.”
Sudders said one of her biggest concerns moving forward is the financial sustainability of MassHealth. She said the administration will have to talk to commercial insurers and other interested groups about how to manage growing caseloads and what MassHealth’s priorities should be. “There are no easy answers,” she said.
Also affecting this year’s budget is increased demand for food stamp and cash assistance benefits. According to Sudders’s testimony, enrollment in the Supplemental Nutrition Assistance Program jumped by 15 percent between September 2019 and September 2020, with 521,000 households now receiving food assistance. Between May 2019 and May 2020, enrollment in TAFDC, or cash assistance, grew by 16 percent.
Caseloads in other programs are down, resulting in less spending. But Sudders said these are likely temporary decreases. For example, there are fewer adoption and guardianship proceedings because the courts are closed. Day services for people with disabilities closed during the pandemic, and now are operating at just 20 to 30 percent of capacity. Early intervention services are down, as is substance use treatment – including at inpatient facilities. Payments were down for children’s mental health because camps for kids with mental health conditions were cancelled this summer.
Sen. Cindy Friedman, who chairs the Committee on Health Care Financing and is vice chair of the Ways and Means Committee, questioned Sudders about what will happen when all those caseloads bounce back, if the state reduces appropriations now. “I appreciate that caseloads are down across the board. What I don’t understand is where we’re going to get the money when the caseloads go back up,” Friedman said. “Where’s the money going to come from in the middle of next year or in 2022 so we can fund these caseloads?”
Sudders pointed to some potential money the state could get from an $8 billion settlement the Department of Justice announced Wednesday with Purdue Pharma over its marketing of opioid drugs.
Attorney General Maura Healey has criticized the settlement and said she will continue to pursue her own litigation.
Multiple cabinet secretaries testified at the lengthy Ways and Means Committee hearing, as state lawmakers consider Gov. Charlie Baker’s revised fiscal 2021 budget proposal, which he released last week. The committee will accept public testimony in writing until Monday, October 26.
Baker said he hopes a budget could be back on his desk for his signature by Thanksgiving.
Senate Ways and Means chairman Michael Rodrigues said he anticipates lawmakers will put forth their own budget proposal “in the coming weeks.”
The state is currently operating on a temporary budget that will expire at the end of the month. Baker on Wednesday filed a $5.4 billion interim budget bill to keep state government funded through the end of November, as lawmakers continue work on an annual budget.
The 2021 fiscal year started on July 1, 2020.