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  • Why Massachusetts Is Important to Health Care Reform

    Officials in Boston and Washington are currently negotiating the renewal of Massachusetts’ Medicaid waiver, which funds a large portion of the state’s landmark health reform law. After a short-term extension was granted two weeks ago, talks are scheduled to end on Monday. In a recent memo, Ed Haislmaier and I note that the outcome of the negotiations will be significant beyond the state of Massachusetts.

    The policy precedent set by the Massachusetts experiment is particularly important, and the terms of any waiver renewal will either confirm or undermine an important policy shift that should also occur in the rest of the country.

    The last renewal of the long-standing waiver precipitated Massachusetts to enact a fundamental shift in policy from subsidizing hospitals to treat the uninsured to subsidizing coverage for the uninsured. But the state is projecting cost overruns of $153 million this fiscal year and $144 million next in its new Commonwealth Care program offering subsidized coverage to the low-income uninsured.

    Yet, as the local media have highlighted, Heritage has shined a “national spotlight on an issue that state officials, including Gov. Deval Patrick, have been reluctant to discuss openly…” The Massachusetts reform could stay within budget if state lawmakers stick to their agreement with the federal government to phase out direct subsidies for certain health care providers.

    If state lawmakers eliminated subsidies explicitly earmarked for certain providers they could cover any extra costs. Furthermore, we argue that continuing these and other “supplemental payments” is contrary to the basic intent of the key element of the path-breaking reform, which was to shift state and federal tax dollars from subsidizing institutions to subsidizing people.

    We also explain that the state should eliminate barriers to competition in the subsidized Commonwealth Care program for lower-income uninsured adults and allow them to apply government assistance to any private plan of their choice.

    Posted in Obamacare [slideshow_deploy]

    2 Responses to Why Massachusetts Is Important to Health Care Reform

    1. Ken Nickell, Washing says:

      It's time we ensure health and long-term financial security for all. That's why AARP is leading Divided We Fail, an initiative to give voice to millions of Americans who are tired of letting Washington gridlock stand in the way of affordable, quality health care and long-term financial security – the most pressing domestic issues facing our nation. Common sense solutions are needed, and everyone – individuals, businesses and government – has a role and a responsibility in ensuring health and financial security for all. Go to http://www.dividedwefail.org to learn more.

    2. Terrance, Richmond, says:

      I just can't understand how the Massachusetts social medicine could possibly be running over budget. After all, they are taking money from everybody, right? They are from me anyway, and I don't even live in Mass. My health insurance company doesn't have any operations in Mass. My health care provider doesn't have any operations in Mass. But, my health care provider uses a billing vendor who is based in Massachusetts and because of that tenuous connection with a state I'd rather not even visit, I have a fee on every Explanation of Benefits that I get from my Health Insurance company. Now, I didn't have to pay this fee, it was covered by the insurance provider, but we all know that there isn't a company in the world that pays the cost of government compliance, be it taxes or regulatory costs. Those costs are passed on to the consumer (me and you both). So then my next question is, "Isn't this a usurpation of the Federal Government's right to regulate interstate trade? Shouldn't this be shot down? (the fee, the medicine plan and maybe even Massachusetts?)

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