If the Trump agenda gets through Congress, it will be very costly for Massachusetts. The biggest single hit will come from the changes in the federal health care law.
The Trump health care changes may not take effect until 2020, but even without those changes the Massachusetts health care model is under stress.
The good news is that we have a very low uninsured rate — Massachusetts citizens have access to health care. And I’ll fight to protect that access.
Yet many who have coverage from their employer (whether public sector or private sector) are facing rising co-pays and deductibles and many of those who buy their own insurance are facing premium increases that they cannot afford.
One of the most troubling indicators of stress is this: Over the past five years, the population with commercial insurance has actually dropped by 450,000 people, down from 65% of Massachusetts residents to 58% of Massachusetts residents. In some instances, employers have dropped coverage. In others, people with low income have voluntarily shifted from employer coverage to MassHealth because of the high co-pays and deductibles on their employer provided plan.
In the same five-year period, while the uninsured rate has remained low and our economy has prospered, enrollment in the MassHealth has grown by 523,000 to almost 2 million people, nearly 30% of the state’s population. The number for whom MassHealth is the primary insurer has grown from 14% to 21% of the state’s population. MassHealth also provides supplemental insurance covering out-of-pocket costs for many on Medicare or commercial insurance.
MassHealth is the state’s combination of Medicaid and the Children’s Health Insurance Program. It is the single biggest state program. Alone, it accounts for almost 40% of the state’s budget (although currently, the federal government reimburses more than half of that cost).
As an insurer, MassHealth appears to be doing a lot of things right. The MassHealth team is placing a lot of emphasis on program integrity — preventing “waste, fraud and abuse” and policing eligibility carefully. They are also embracing strongly the concept of accountable care organizations — organizations combining hospitals, doctors and other providers to work together to provide high-quality, cost-effective care for patients.
The cost per covered patient has grown only very modestly — rising under 2% per year over the past 10 years. And, at the same time, MassHealth is making progress on providing more and better care for people with substance use disorders.
Yet, with enrollment growth of 70% over the past 10 years, MassHealth’s total spending has roughly doubled. The Governor has proposed $41.0 billion in total state spending in Fiscal 2018, an increase of $1.3 billion or 3.2% over estimated total state spending of $39.7 billion in FY2017. Of that total increase of $1.3 billion, Masshealth accounts for $1.2 billion, making meaningful increases for other important priorities like local and education aid essentially impossible without new revenues.
The Governor has proposed a new “contribution” for employers who do not provide health care coverage for their employees. This proposal speaks directly to the problem of rising MassHealth enrollment — it might lead more insurers to preserve or reinstate coverage. At the same time, it would raise an estimated $300 million in FY2018 — creating just a little headroom for other priorities. The “contribution” would be required from all employers with over 10 employees.
This proposal has drawn substantial opposition from the business community — it is certainly a substantial charge that will loom largest for businesses that are least profitable and/or pay the lowest wages. Massachusetts included in its original 2006 health care reform proposal a much smaller charge which was repealed in favor of the national employer mandate in Obamacare. However, the national mandate has never actually been imposed, which is one factor contributing to the slide in employer provided health care coverage.
Rising health care costs are the root cause of the stress in the system as a whole. Massachusetts has among the highest systemic per patient costs in the world. In 2012, we put in place a host of measures to control systemic costs, but those have not been sufficient to alleviate the pressure that many individuals and public and private organizations are experiencing.
The Governor has proposed new direct controls on costs, but these have also attracted opposition The concept of “controlling health care costs” is a mixed bag politically and economically — health care is one of our employment engines in Massachusetts.
We need to preserve access to health care. At this stage, I’m not offering a personal recommendation, but really looking for ideas and resources. I know that many of my constituents have more expertise than I do on this issue.
I’ve read through the comments here — it took me a while to come back to because I was daunted by the diversity of thought here. I’ll let the thread speak for itself.
The bottom line is this. There are powerful arguments for radical change. For this year, radical change is not on the table. The space we are working in is what kind of assessment will we levy on employers to help close the MassHealth cost gap. I expect we’ll work out a narrow-gauge solution in that space. Not a satisfying answer.
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