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Health Care Reform
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FY09 House 2 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
The Commonwealth has embarked on an ambitious initiative to ensure that nearly every resident of our state has access to health insurance coverage. Since the passage of health care reform, 300,000 residents have newly enrolled in health coverage through private insurance, MassHealth and the new Commonwealth Care program. The Governor's FY09 budget builds on this success by subsidizing coverage for 225,000 individuals in Commonwealth Care, as well as enrolling residents who are eligible for MassHealth programs that were expanded in health care reform and maintaining MassHealth benefits that health reform restored.
Commonwealth Care Health Insurance Program
The Commonwealth Health Insurance Connector has completed its first full year of implementation of the Commonwealth Care program, enrolling over 126,000 residents whose income falls below 150% of the federal poverty level (FPL), and whose coverage is fully subsidized. In addition, over 42,000 residents whose incomes are between 150-300% FPL are enrolled and making modest contributions to their coverage. Governor Patrick's FY09 budget builds on this success by investing $869 million to provide Commonwealth Care coverage to 225,000 residents.
Health Safety Net Trust Fund (HSNTF)
Achieving coverage for 300,000 Massachusetts residents has had a significant impact on free care utilization and costs. Hospital inpatient utilization decreased in Pool Fiscal Year 2007 (October 1, 2006 through September 30 2007) by over 9% as compared to Pool Fiscal Year 2006. At the same time, hospital outpatient utilization decreased by 12%. Community Health Centers (CHC's) are also seeing a decline in demand for and costs of free care, including a 23% decrease in visits charged to the HSNTF in PFY07 and a 12% decrease in payments. As free care utilization has decreased, the Commonwealth has been able to increase its investment in Commonwealth Care.
The Governor's budget recognizes the important role that hospitals and CHC's continue to play in providing care to residents who do not at this time have access to affordable coverage. It reflects $453 million in health safety net costs, a 24% decrease from pre-reform expenditures in FY07, continuing a trend of decreased expenditures on free care.
Health care reform expanded MassHealth eligibility for children and low-income adults, an important component of the overall expansion effort. As a result of this expansion, in addition to increased outreach efforts and enrollment streamlining through the Virtual Gateway, MassHealth has seen caseload increase as eligible individuals access health coverage.
The reform also recognized the importance of wellness and comprehensive coverage by expanding benefits for current MassHealth populations to include adult dental coverage, glasses, and prosthetics, and by creating a MassHealth Wellness program and a pilot smoking cessation program. Governor Patrick's FY09 budget invests $893 million to continue these programs. As part of that investment, Governor Patrick makes tobacco cessation a permanent benefit for MassHealth members and funds a MassHealth Wellness incentive program to encourage preventative care and healthy behaviors. The MassHealth budget also fully supports the rate increases for hospitals and physicians originated in the Health Care Reform legislation.
In FY09, MassHealth will implement new pay-for-performance programs for nursing homes, primary care providers and managed care organizations, building on its efforts to ensure that payments support high-quality, cost-effective care.
Health Care Quality and Cost Council
The Health Care Quality and Cost Council was created in the health care reform legislation to examine and promote health care cost containment and quality improvements that are closely related to ensuring comprehensive, affordable health coverage. The Council, which is comprised of industry experts and policy makers, announced its goals for FY08 through FY2012 that focus on slowing the growth of health care costs while improving quality and access. In order to support these goals, the Governor's FY09 budget includes $1.9 million for the Council, nearly doubling the FY08 appropriation.
Office of Health Equity
Governor Patrick's FY09 budget includes $1 million for the Office of Health Equity within the Executive Office of Health and Human Services (EOHHS). The Office of Health Equity will coordinate efforts across EOHHS and other Secretariats that will lead to a better understanding of the social and health care factors that contribute to health disparities, including environmental, housing, public safety, economic and health systems factors.
Other Health Care Reform Initiatives
Governor Patrick's FY09 budget continues to support other important components of health care reform, aiming at expanding enrollment in health insurance and helping hospitals provide high-quality, cost-effective care. The budget includes:
- $28 million for the Essential Community Provider Trust Fund to spur innovation in systems of care within the community, provide incentives to physicians to adopt electronic medical records, and address financial distressed acute care hospitals and community health centers.
- $3.5 million for Enrollment Outreach Grants to public and private non-profit groups to help individuals enroll in health insurance, connect them with primary care physicians, and help them in other ways to navigate the health care system.
- $160 million for supplemental payments to safety net hospitals, specified in S.122 of the health care reform legislation.
Prepared by the Executive Office for Administration and Finance • Rooms 373 & 272 • State House
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