Baker Gives Legislature Summer Assignment: MassHealth Reform

“Massachusetts High Technology Council President Chris Anderson said his organization’s support for the assessment deal negotiated with Baker “has always been absolutely conditioned on the adoption of reforms to MassHealth that are sufficient to put the program on sustainable financial footing AND an ironclad commitment to sunset the assessment no later than the end of 2019.”

“Until such reforms are adopted, the Council cannot and will not support an employer assessment,” Anderson said in a statement.”

Gov. Charlie Baker gave the Legislature a new deadline on Monday, calling on them to approve by mid-September a $350 million package of new employer health care assessments and MassHealth reforms required to balance the annual state budget.

Baker signed a $39.4 billion budget for fiscal 2018 that lowered tax revenue assumptions for the year by $749 million and made $320 million in spending vetoes that will be examined and reviewed by House leaders and Rep. Jeff Sanchez, the new chairman of the House Ways and Means Committee.

The governor also returned sections of the budget that would have allowed the administration to levy new fees and fines on employers to help pay for rising Medicaid costs. Instead, Baker wants to see the assessments, which he first proposed, coupled with reforms to MassHealth eligibility.

“I’m proud that through bipartisan collaboration with the Legislature we are increasing investments in education, local aid to cities and towns and efforts to fight the opioid epidemic all without raising taxes on the people of Massachusetts,” Baker said at a press conference Monday afternoon.

Senate Ways and Means Chairwoman Karen Spilka issued a statement after the bill signing suggesting a crack in bipartisan cooperation. Spilka called the $40.2 bilion budget received by Baker from the Legislature a “fiscally responsible” plan that already included “hundreds of millions in painful cuts.”

“The Administration has not shared with us any information that justifies cutting further,” she said.

The MassHealth reforms being pushed by Baker were laid aside by legislative budget negotiators earlier this month because they said they didn’t have enough time to fully vet the proposals, or outright opposed the ideas. The eligibility changes were critical to the governor winning support from stakeholders in the business and health care communities for the new assessments that were accepted by the Legislature.

Baker called on the Legislature to hold a hearing on the full suite of proposals – including the assessments – within 30 days, and to take action within 60 days. The timeline laid out by the governor, if followed, could interfere with the Legislature’s plans for a traditional August recess.

“These reforms are necessary to prevent an unfair burden on Massachusetts employers and health care providers,” Baker said, adding, “Without taking these reforms up in a timely manner, corrective action will be needed to make up for the corresponding revenues and savings associated with this proposal.”

One assessment would boost a per-employee assessment paid by employers, known as the Employer Medical Assistance Contribution, from $51 to $77 per year. The second would hit employers with penalties of up to $750 per employee if their workers choose MassHealth even though they have access to insurance through their employers.

Baker wants the Legislature to package those assessments – plus business cost-saving adjustments to unemployment insurance rates – with a five-year moratorium on new health insurance mandates.

The amendment also proposes to transition hundreds of thousands of enrollees from standard MassHealth plans into different subsidized coverage offered through the Connector and MassHealth and expanded scope of practice for new mid-level dental therapy providers.

It’s unclear what might happen next with the governor’s MassHealth proposal as the House is undergoing a period of leadership transition following Rep. Brian Dempsey’s announcement that he would be leaving Beacon Hill for a lobbying job.

Rep. Sanchez was appointed Monday to head the Ways and Means Committee, and Rep. Peter Kocot was tapped to fill Sanchez’s former role as House chairman of the Health Care Financing Committee. Either could take jurisdiction of Baker’s amendment to hold hearings.

Baker refused to speculate about what might happen if the Legislature missed his Sept. 15 deadline, or returned the employer assessments again without the MassHealth eligibility reforms.

“I fully expect that they’re going to deal with it,” Baker said.

Massachusetts High Technology Council President Chris Anderson said his organization’s support for the assessment deal negotiated with Baker “has always been absolutely conditioned on the adoption of reforms to MassHealth that are sufficient to put the program on sustainable financial footing AND an ironclad commitment to sunset the assessment no later than the end of 2019.”

“Until such reforms are adopted, the Council cannot and will not support an employer assessment,” Anderson said in a statement.

Mass Home Care, a network of 29 elder care coordination agencies, opposed requiring human services agencies that depend on state funding to pay a fee for workers who receive MassHealth. “These working poor cannot afford employer health plans,” the group said. “They should not be forced to buy employer plans they cannot afford, and employers who depend on inadequate state funding should not be penalized for only being able to offer plans beyond their worker’s reach. These ‘fixes’ do not address the underlying problem of unaffordable health care. Instead they punish the victim of this market failure.”

While the business community remains opposed to paying more for MassHealth unless the Legislature takes steps to control long-range spending in the program, some Democrats aren’t enamored with Baker’s proposed Medicaid reforms.

Rep. Christine Barber, during floor debate on the compromise budget sent to Baker’s desk, said the governor’s full proposal would have undermined the state’s near universal health coverage, and Democratic candidate for governor Jay Gonzalez said Monday that Baker is trying to balance the budget “on the back of the state’s most vulnerable.”

“It’s complete hypocrisy,” Gonzalez told the News Service in an interview. “We have a governor who says he’s against what the Republicans in Washington are doing to cut health coverage for millions, and yet he’s doing the same here at home.”

Baker’s budget amendment proposes to transition 140,000 adults with incomes above the federal poverty level from MassHealth to subsidized ConnectorCare plans, and another 230,000 enrollees earning under less the poverty level from standard MassHealth plans to CarePlus.

While the administration said most would continue to have access to coverage without premiums and capped out-of-pocket expenses, Gonzalez said that federal subsidies for out-of-pocket expenses are in jeopardy from the Trump administration and Congress, while Baker has proposed making cuts to benefits under the CarePlus plan.

“This is a statement of values,” Gonzalez sad. “Gov. Baker is choosing to appease the business community in making a deal when he negotiated with them in order to balance the budget on the backs of the most vulnerable people and cut coverage. That’s not OK.”

The finalized budget includes significant new spending on local aid, education and substance abuse treatment, according to Baker, and would strengthen the state’s financial position by making a $98 million deposit into reserves.

Baker said the the $185.3 million in the budget for substance abuse prevention and treatment programming represents a 50 percent increase since he took office in 2015.

“It goes without saying that we still have a lot of work to do here as a commonwealth and as a nation to focus on a public health crisis that continues to destroy lives and families,” Baker said.

Credit rating agencies have stressed the importance of building the state’s stabilization fund as a bulwark against the next recession, and Standard and Poor’s cited the status of the “rainy day” fund – currently at about $1.3 billion – as a reason for its downgrade of the state’s bond rating.

Noah Berger, the president of the Massachusetts Budget and Policy Center, said the budget, without changes to the tax code that could generate more revenue for state government, ultimately fails to move the needle in areas like education and transportation.

“I think this ultimately is a budget much more about we’re not able to do, what we can’t do, than a budget about, perhaps, what we could do as a commonwealth,” Berger said. “The budget doesn’t protect higher ed students from tuition and fee increases, doesn’t make the kinds of investments in education that would really expand opportunity and doesn’t make the kind of investments in our transportation system that cold really fix our subways and buses and roads and bridges.”

Susan Lusi, president of Mass Insight Education, said the budget reflected a “strong commitment to raising education standards and closing the achievement gap” due in part to its inclusion of AP STEM and English program funding.

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