Defending MassHealth reforms

Package preserves, doesn't walk away from, universal health care

MASSACHUSETTS HAS A LONG TRADITION of bipartisan health care reform.  Our outside-of-the-box thinking, willingness to be nimble as Washington dynamics shift, and resolve to embrace change are critical components in honoring our collective commitment to near universal health care coverage. Since passage of our state health care reform in 2006 and the Affordable Care Act (ACA), Massachusetts has achieved the highest rate of health care coverage for its residents in the nation – a benchmark the Baker-Polito Administration is committed to sustaining.

MassHealth is our state’s Medicaid and Children’s Health Insurance Program (CHIP) — 40 percent of all children, 60 percent of all disabled adults, 20 percent of individuals over 65, and two-thirds of all nursing home residents rely on MassHealth for health care coverage. That translates into more than a quarter of all Massachusetts residents, roughly 1.9 million people.

Over the past 10 years, MassHealth enrollment has grown by 70 percent, or 800,000 lives. Despite our state’s steady population, low unemployment, and the nation’s highest insurance coverage rate, the percentage of residents on MassHealth increases annually. On the fiscal side, MassHealth accounts for 40 percent of the state’s budget and outpaces state revenue growth. That is not sustainable and is why the Baker-Polito Administration has proposed a plan now before the Legislature to control MassHealth growth and to start to bring down overall health care costs.

Without implementation of our plan, the MassHealth and Commercial Market Reform Package, MassHealth spending will grow 5.6 percent net, or $340 million net, this year. As health care costs rise and enrollment grows, MassHealth will continue to consume more of the state budget. As a compounding concern, there is significant pressure in Washington to reduce state reliance on enhanced federal revenue for the ACA expansion population and to constrain growth. Massachusetts receives approximately $1.6 billion in federal funding for the Medicaid expansion population.

The Baker-Polito Administration has achieved the lowest levels of MassHealth enrollment growth in 10 years. Enrollment grew just 1 percent in fiscal year 2017, as compared with 42 percent growth from December 2013 to December 2014, and 3 to 4 percent growth per year from 2007 through 2013. Since January 2015, this administration accomplished this by addressing major defects and gaps that were a result of the state’s flawed implementation of the ACA; identifying and continuing to fix significant operational systems issues, and implementing new controls to ensure tighter enrollment processes. We reviewed the eligibility of approximately 1.2 million members; implemented new data matches to confirm income, residency, and assets; and enforced mandatory premium assistance policies for individuals with access to other insurance. As a result of these efforts to protect taxpayers and the healthcare safety net, the administration secured $500 million in savings. Without additional reforms, however, MassHealth will continue growing unsustainably.

Additionally, MassHealth has controlled costs by constraining rates for health care providers; on average MassHealth pays 85 cents on the dollar as compared to a dollar of Medicare spending. However, rates can only be held constant for so long without destabilizing hospitals or practitioners. There are no more one-time fixes left to generate the magnitude of savings that we have been able to yield over the last two years.

Critics say that our reform package is not needed because MassHealth enrollment growth has begun to slow, we should wait for Congressional action, and that we are not committed to health care coverage.  None are true.  To implement insurance reforms takes significant time. In addition to state law changes and federal approvals, reconfiguration of eligibility systems for both the Connector and MassHealth, finalization of insurance carrier rates, and the very important process of member notification and outreach must occur.

This reform package is a step towards preserving universal coverage, not a step away from it. By shifting insurance coverage for certain non-disabled adults between 21 and 64 who earn more than 100 percent of the federal poverty level from MassHealth to the Connector, the Commonwealth will be able to provide public subsidized insurance for them at a lower cost. At the Connector, members will have access to a zero-dollar-premium plan that is comparable to MassHealth coverage with cost sharing that is generally between 2 percent and 3 percent of income.

The reforms also seek to bring back an essential component of Massachusetts bipartisan health reform law by ensuring those who are offered affordable, high quality insurance through an employer do not opt to receive taxpayer funded insurance coverage.

Meet the Author

Marylou Sudders

Secretary of health and human services, Baker administration
Massachusetts has always been a leader in health care, not a follower. Taking prudent steps at this time to maintain health care coverage for all of our residents, slow the growth of MassHealth, and preserve federal revenue is exactly what this proposal is trying to achieve.  We are committed to both our residents’ health care and the fiscal health of our state.

Marylou Sudders is the Baker administration’s secretary of health and human services.