"Declining Revenues, More Enrollees Strain Health Reform Program in Massachusetts" from Pension & Benefits Daily

Source: Pension &  Benefits Daily: All Issues > 2009 > July > 07/09/2009 > Health Care &  Benefits > Declining Revenues, More Enrollees Strain Health Reform Program in Massachusetts

Declining Revenues, More Enrollees Strain
 Health Reform Program in Massachusetts

Declining revenues and a spike in enrollees in state-subsidized health coverage has put a strain on the ambitious Massachusetts health reform program enacted in 2006.

State health regulators approved June 23 $115 million in cuts to Commonwealth Care, the program of partially subsidized health coverage for residents below 300 percent of the federal poverty level. Legislative budget writers cut another $70 million by denying coverage to some 30,000 legal immigrants.

Gov. Deval Patrick (D), after signing the budget on June 29, immediately filed a supplemental appropriations bill to restore the coverage to legal immigrants, who do not currently qualify for federal reimbursement, insisting that Massachusetts should continue to "lead the nation in offering high-quality affordable health care to all."

Patrick said there are no other planned changes in eligibility or coverage and that the state health reform program has increased the state's rate of insured persons to more than 97 percent.

Automatic Assignment

The 2010 budget includes $723 million for Commonwealth Care. The biggest cut approved by the state board overseeing the plan was a decision to delay the automatic assignment of applicants who fail to select a health plan.

The change is aimed at reducing the anticipated increase in enrollments from 20 percent to 9 percent next year.  After remaining steady for months, enrollment in the plans rose 7 percent in the spring to 177,000 and was projected to rise to 212,000 over the next year.

Offsetting increased state spending on health plan coverage is a reduction in the Health Safety Net services provided to low-income persons without coverage, from $661 million in 2007 to $410 million in 2008, and an increase in Federal reimbursement under a three-year Medicaid waiver announced last September.

Increased state spending on health coverage is likely to increase calls for employers to bear a greater share of costs.  The "fair share employer contribution" imposed on employers that do not offer a minimum level of coverage to their workers has remained unchanged at $295 per worker per year.

State officials also are working on a long-range plan to reduce costs by prodding the health care community to phase out the traditional fee-for-service method of health plan payments and replace it with a new global payment model within the next five years.

 

By Rick Valliere