- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Bailing Out Massachusetts?

Posted By Greg D'Angelo On September 30, 2008 @ 2:49 pm In Economics | Comments Disabled

Is the Bush Administration supporting yet another bailout?

After seven delays and months of negotiations between Massachusetts and federal officials over the renewal of the state’s Medicaid demonstration waiver which supports its landmark health reform, State House News Service [1]has just reported that a deal has been struck.

While the details of the waiver renewal are so far being withheld by both state and federal officials, there was a press conference today at 2pm where Gov. Patrick announced the deal.

As my colleague Ed Haislmaier and I wrote in our recent analysis [2]:

The last renewal of this long-standing waiver in 2005 was the catalyst for Massachusetts adopting a package of major health reform measures in 2006. One of the major reform elements was an agreement between state and federal officials as to how Massachusetts would redirect federal Medicaid funds previously flowing to “safety net” institutions. The 2006 amendments to the waiver made Massachusetts one of the first states in the nation to attempt a large-scale shift in public health care funding away from subsidizing health care providers for delivering care to the uninsured and instead subsidizing the purchase of health insurance coverage for the low-income uninsured. This fundamental policy shift—from subsidizing institutions to subsidizing people—should not now be reversed or diluted in a new waiver extension. The outcome of these negotiations will not only affect health reform in Massachusetts; it will also set an important policy precedent for other states considering similar reform measures.

Now its time to see what type of precedent will be set.

Will the Bush Administration attempt to bailout a fiscally irresponsible state that’s undermining its own reform by failing to shift money away from politically connected institutions? Or will the Bush Administration do the right thing by insisting that existing Medicaid dollars are appropriately redirected to help low-income individuals purchase health insurance coverage? [3]

If President Bush makes the wrong choice, Congress should be prepared to act on behalf of federal taxpayers.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/09/30/bailing-out-massachusetts/

URLs in this post:

[1] State House News Service : http://www.statehousenews.com/cgi/as_web.exe?rev2008.ask+D+12745249

[2] our recent analysis: http://www.heritage.org/Research/HealthCare/wm1979.cfm

[3] Will the Bush Administration attempt to bailout a fiscally irresponsible state that’s undermining its own reform by failing to shift money away from politically connected institutions? Or will the Bush Administration do the right thing by insisting that existing Medicaid dollars are appropriately redirected to help low-income individuals purchase health insurance coverage?: http://www.heritage.org/Press/Commentary/ed091508d.cfm

Copyright © 2011 The Heritage Foundation. All rights reserved.