The Heritage Foundation - Leadership for America

On Tuesday, the Wall Street Journal published an editorial on the Massachusetts health reform that, among other things, highlighted the roughly 150 million dollar cost overrun. Unfortunately, the Journal joined other media outlets in missing the real story.

What was left out of the editorial, and other media coverage thus far, was an examination of the tension in shifting subsidies away from institutions to individuals in order to help them buy health insurance coverage.

This is the key policy issue at hand as Massachusetts is now negotiating with federal officials the terms for renewing its Medicaid “waiver” set to expire Aug. 11th.

Surprisingly, hardly anyone outside of the local press (see here and here) is asking whether the state is following the basic architecture of its own plan.

In a recent Heritage memo, we explain that if Massachusetts stuck to the reform design it initially agreed to, and eliminated special payments to Boston Medical Center and Cambridge Health Alliance, there would be no talk of a budget gap, the need for new state taxes, or a federal bailout.

That is, if the Commonwealth weren’t resorting back to business-as-usual and diverting funds away from the reform under the cover of opaque budgeting, it might find the waiver renewal process with federal officials less problematic.

Massachusetts would then also be in a better state of affairs to address what was left undone in its reform experiment.

That’s the real story about Massachusetts.