Massachusetts Developmental Disabilities Council

Office of Medicaid (MassHealth)

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0352	MassHealth Enroll. Outrch.	(1,000,000 earmark: line 4000-0310)	(1,000,000 earmark: line 4000-0310)	0	0	0	250,000
4000-0430	CommonHealth	42,112,325	53,130,000	54,745,000	78,150,000	83,224,049	75,246,379
4000-0500	Managed Care	1,490,620,301	1,743,425,322	1,896,910,000	2,360,640,111	2,319,197,919	1,977,150,989
4000-0600	Sr. Care Plans**	1,648,865,785	1,877,126,743	1,717,620,000	1,612,307,307	1,697,117,500	1,783,969,375
4000-0620	Sr. Care Options**	--	--	--	--	83,275,500	86,777,546
4000-0625	HHA Rate Increase**	--	--	--	--	4,000,000	0
4000-0700	Indemnity/3rd Party Plans	736,800,329	944,557,935	1,103,497,000	1,267,332,669	1,239,530,000	1,498,059,398
4000-0860	MassHealth Standard	246,937,392	295,630,000	332,786,452	369,747,220	390,030,100	389,892,223
4000-0870	MassHealth Basic	214,230,819	234,970,000	219,823,000	92,100,000	111,642,118	56,372,203
4000-0895	Healthy Start	8,077,556	7,005,297	7,221,618	6,213,532	14,213,532	15,447,686
4000-0896	MassHealth Ess.: Imgrnts.	--	--	--	--	2,000,000^	0
4000-1400	MassHealth HIV	10,000,000	5,500,000	10,380,401	14,962,424	8,732,000	6,926,068
4000-1405	MassHealth Essential***	--	--	--	O.S.: 160,000,000	O.S.: $160,000,000	119,377,890

*     Office of Medicaid and Executive Office of Health and Human Services administration were consolidated in FY04.

**   These line items fund programs overseen by the Department of Elder Affairs. See DEA chapter for analysis.

*** MassHealth Essential was moved on budget in H1 for FY06.

^      This amount includes a September 2004 supplemental appropriation for elderly and disabled immigrants only.

MassHealth, the state name for the federal Medicaid program, is Massachusetts's health insurance program for low-income families, pregnant women, children, and elderly persons. It also provides crucial coverage for persons with disabilities and some long-term unemployed individuals. After a reorganization in FY04, the new state Office of Medicaid, which oversees MassHealth, replaced the former "Division of Medical Assistance" (DMA) and is now located within the Executive Office of Health and Human Services (EOHHS).

[Editor's Note: In this section, the words "MassHealth" and "Medicaid" should be regarded as synonymous-the difference is only in the state and federal names for this program.]

MassHealth is funded through a combination of federal and state funds. In recent budget cycles, it has been a target for cuts and the provisions of the program have been heavily debated. As a consequence, eligibility guidelines have been tightened and service offerings have been reduced in many programs, including those vital to persons with disabilities.

Advocates point out that:

·       MassHealth attracts matching federal funds, fosters economic growth in the health care sector and, most importantly, ensures that a high percentage of individuals who cannot obtain health insurance through their employers will get needed care.

·       Double-digit national health care inflation creates hardship for a growing number of working families. The resulting rise in health care premiums makes health care unaffordable and has led to higher numbers of uninsured individuals and families in Massachusetts. MassHealth provides the only public health insurance "safety net" coverage option for many families and individuals.

·       MassHealth provides needed health coverage to 200,000 people with disabilities.

·       Recent reports by the state's Division of Health Care Finance and Policy (DHCFP) indicate that 460,000 residents in Massachusetts do not have health insurance, the majority of whom are adults between 19 and 64 years old. It is estimated that about 100,000 of these persons may be eligible for MassHealth.[1]

·       Other reports have estimated that up to 660,000 persons-or 10% of the state's population-are uninsured.[2]

FY05 OVERVIEW

A Mixed Picture-Increases of $400 Million Lauded,

Yet Restorations Only Help Some

Some of the cuts that were implemented in FY02-FY04 have been restored. Total spending for MassHealth will increase by close to $400 million (7.8%) over FY04 funding, not including the "off-budget" expenditures for Uncompensated Care (free care at hospitals), the MassHealth Essential program, and the Nursing Home User Fee. When the off-budget expenditures are included, MassHealth growth for FY05 falls in the 11-12% range, a number close to the annual growth for health care expenditures.

The good news includes restorations in the following programs (see the line-by-line analyses below for more details):

·       The Healthy Start program (line 4000-0895)-that provides prenatal care, outreach, information and referral, and advocacy to low-income uninsured pregnant women and their infants-was fully-funded in FY05 after receiving inadequate funding in FY04.

·       Eligibility was restored for MassHealth for HIV-positive persons (line 4000-1400) with incomes at 134-200% of the federal poverty level. This eligibility guideline had been tightened in FY04 to include only those with incomes at or below 133% of the federal poverty level.

Federal Matching Funds Threatened

In November 2004, federal officials at the Center for Medicare and Medicaid Services threatened to cut matching funds for MassHealth by $583 million, saying the state had violated rules for financing the Medicaid program. Because the federal administration is trying to restrain the growth in Medicaid spending nationwide, the federal government is looking more closely at Medicaid administration practices in all states.

The dispute was tied to negotiations between Massachusetts and federal officials over the state's waiver of Medicaid rules, which gives Massachusetts permission to create a unique Medicaid program for the state. The waiver-approved last in 2001 and up for renewal in 2005[3]-allows the state to use managed-care programs for MassHealth recipients, thus enabling enrollment of many more program participants than would otherwise be possible within current funding levels.

During waiver negotiations, federal officials accused the state of using a variety of unacceptable techniques to collect a federal match. The governor and other state officials, backed by Senator Edward Kennedy, argued that the money had been used legitimately. Most of the disputed money now goes to Boston Medical Center, UMass Memorial Hospital in Worcester and the Cambridge Health Alliance. These facilities provide a disproportionate share of care for uninsured and low-income persons, some of whom receive free care and others who are on MassHealth. Had federal officials been successful, the lost funds probably would have resulted in further state-level cuts to services or changes to eligibility rules so that fewer individuals could receive benefits. Fortunately, state negotiators were successful and the cuts were averted.

In January 2005, after extensive discussion, the Massachusetts Office of Medicaid found out that the waiver will be extended for another three years. Still, the struggle to preserve federal funding is not over. According to a recent Boston Globe article, "the number of people without insurance could expand as the [federal] administration seeks to reduce the federal deficit by slashing funding for state Medicaid programs."[4]

This federal posture does not bode well for states like Massachusetts, which use "optional" categories to cover a larger number of low-income and uninsured persons under their Medicaid programs. According to the Boston Globe and the administration, "The state will have to significantly change how it pays for its share of the Massachusetts Medicaid program and could still lose up to $200 million in federal funds in FY06."[5]

H1 FOR FY06 OVERVIEW

Health Care Reform Objectives Made Key Issue

In November 2004, the administration unveiled its vision for health care coverage expansion and "health insurance reform." The governor's plan, outlined in broad brushstrokes in a Boston Globe editorial, may be introduced as a bill in FY05. The administration's stated goals are to slow the growth in health care costs, expand access to health care (i.e., insurance) to all Massachusetts residents, and not spend additional dollars.

In particular, the administration wants to change the way our free care pool (Uncompensated Care Pool) works, expand MassHealth, and slow the growth of private health insurance premiums. "We need to be smarter in the way we use the billions we already spend," the governor said in his January 13, 2005 State of the State Address, and "finding a way to bring down the cost of health care is one of our highest priorities."

H1 Budget Proposal Missing Details on Funding Health Care for Uninsured

H1 for FY06 does not include language to implement the governor's proposed health care reforms, nor has legislation specifying the necessary details been introduced. H1 allocates additional MassHealth program expenditures of only $134 million-just 2% of FY05 costs-at a time when average annual increases in health costs have been in the 10-12% range.

Although H1 for FY06 initially gives the impression that the $6.6 billion proposed for MassHealth programs is a 5.6% increase over FY05. In fact, H1 allocates additional program expenditures of only 2% ($134 million) over the FY05 level. This is because the H1 recommendation includes FY05 unspent funds and counts those again in the FY06 allocation. Currently, average annual increases in health costs have been in the 10-12% range. Advocates are unsure if the H1 allocation would adequately fund the program.

Finally, H1 makes proposed changes to eligibility guidelines. According to advocates, H1 for FY06 would terminate coverage for elderly and disabled legal immigrants. It also would inadequately fund MassHealth Essential (line items 4000-0896 and 4000-1405, see below) coverage for long-term unemployed adults.[6]

Line Item Analysis

Account:      MassHealth Enrollment Outreach Grants

Line Item:   4000-0352

The MassHealth Enrollment Outreach Grants account would fund nonprofit groups to encourage enrollment in MassHealth. Each year, there are many Massachusetts residents who are eligible for MassHealth, but do not enroll-this program provides money to contact and sign up a portion of the estimated 100,000 individuals currently in this category.

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0352	MassHealth Enroll. Outrch.	(1,000,000 earmark.: line 4000-0310)	(1,000,000 earmark: line 4000-0310)	0	0	0	250,000

FY01-FY05 Impact

In FY01 and FY02, account 4000-0310 included an earmark of $1,000,000 for enrollment outreach. Overall, enrollment outreach funding has been intermittently provided in past budget years.

FY06 Needs

Research by the Massachusetts Division of Health Care Finance and Policy has estimated that more than 5,000 adults with disabilities may be eligible for CommonHealth but are not enrolled.[7] Many of the state's uninsured residents are unaware that they could receive this program.

H1 for FY06 Recommendations

H1 for FY06 recommends funding this new account at $250,000. It is the only line item in H1 that provides money targeted for enrollment expansion. While advocates are pleased with the funding, similar enrollment outreach programs in the past have received $1 million and over.

Account:      CommonHealth

Line Item:   4000-0430

The CommonHealth account funds health insurance for some children with disabilities and adults with disabilities who are employed or seeking employment. While 89% of MassHealth recipients with disabilities are covered under the MassHealth Standard program (line 4000-0860), those who are working tend to have income above the eligibility guidelines.

There is no upper income limit for eligibility for CommonHealth. Participants with incomes that are above 150% of the federal poverty level are charged sliding-scale premiums based on their incomes. About 14,900 members currently receive CommonHealth (November 1, 2004 data). Of these, 12,500 are adults and the remainder are children.

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0430	CommonHealth	42,112,325	53,130,000	54,745,000	78,150,000	83,224,049	75,246,379

FY01-FY05 Impact

In FY04, some of the premiums that CommonHealth members pay were increased. In addition, the FY04 budget authorized the program to institute new asset tests for eligibility and to set a cap on the number of members that may enroll. There is currently a flexible cap for adults of 11,850-13,000 and enrollment has not yet been closed.

In FY05, the program is funded at $83.2 million. The administration predicts that only $78.6 million of these funds will be spent. Additionally, final budget language retained CommonHealth eligibility standards for children--in effect since 1996--guaranteeing that children with disabilities will have the same access to this program as in previous years.

FY06 Needs

Advocates will be closely monitoring enrollment in the CommonHealth program in FY06, so that members are aware when or if the program is capped and can attempt to prevent waitlists.

H1 for FY06 Recommendations

H1 for FY06 recommends funding the CommonHealth program at $75.2 million. While this appears to be a $7.9 million cut, if administration predictions of a $4.6 million surplus in this account in FY05 are accurate, CommonHealth funding would decrease by only $3.3 million (or 4.2%) between FY05 and FY06 at this allocation level. Children's eligibility standards are again retained.

Account:      Managed Care Plans

Line Item:   4000-0500

The Managed Care Plans account pays for those enrolled in several MassHealth programs: MassHealth Standard (also funded in 4000-0860); MassHealth Essential (also funded in 4000-1405); MassHealth Family Assistance (also funded in 4000-0880 and 4000-0890); and MassHealth Basic (also funded in 4000-0870). Also covered are claims for the state's primary care clinician plan, mental health and substance abuse program, and HMO plans services. Enrollees are more than 500,000 adults and children.

MassHealth Standard and MassHealth Essential are discussed under their separate line items below. People with disabilities who are in the MassHealth Standard program are normally required to enroll with managed care organizations. If no suitable managed care provider is available, as determined by the Office of Medicaid, a member in MassHealth Standard can choose not to enroll in managed care.

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0500	Managed Care	1,490,620,301	1,743,425,322	1,896,910,000	2,360,640,111	2,319,197,919	1,977,150,989

FY01-FY05 Impact

In FY05, Managed Care was funded at $2.3 billion-a decrease of $41.4 million (1.8%) from FY04 spending.

H1 for FY06 Recommendations

H1 proposes to cut this account by $302 million (14%) from the FY05 projected spending level. It is not clear if the decrease is due to a projected enrollment decline.

Accounts:    Senior Care Plans, Senior Care Options, and Home Health Aide Rate Increase

Line Items:  4000-0600, 4000-0620, 4000-0625

Please see the Department of Elder Affairs chapter for coverage of the Senior Care Plans, Senior Care Options and Home Health Aide Rate Increase accounts. Note that funding for these programs continues to come from MassHealth, and is therefore counted as part of total MassHealth spending.

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0600	Sr. Care Plans**	1,648,865,785	1,877,126,743	1,717,620,000	1,612,307,307	1,697,117,500	1,783,969,375
4000-0620	Sr. Care Options**	--	--	--	--	83,275,500	86,777,546
4000-0625	HHA Rate Increase**	--	--	--	--	4,000,000	0
Totals:		1,648,865,785	1,877,126,743	1,717,620,000	1,612,307,307	1,784,393,000	1,870,746,921

**   These line items fund programs overseen by the Department of Elder Affairs (DEA). See DEA chapter for analysis.

Account:      Indemnity and Third Party Plans

Line Item:   4000-0700

The Indemnity and Third Party Plans account covers the costs of claims for seniors and families who exhaust other insurance options. Since MassHealth is the payer of last resort, it often pays for seniors' Medicare premiums or the premiums of members who have employer-sponsored insurance but cannot pay their share. Coverage for more than 130,000 adults and children is paid for by this line item. About 85,000 of those covered are people with disabilities.

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0700	Indemnity/3rd Party Plans	736,800,329	944,557,935	1,103,497,000	1,267,332,669	1,239,530,000	1,498,059,398

FY01-FY05 Impact

In FY05, this account was funded at $27.8 million less than the FY04 allocation. Expenditures in FY05, however, are projected to be $32 million lower than appropriated, leaving this account with a surplus of that amount.

H1 for FY06 Recommendations

In FY06, the administration allocates $290 million in additional funds for the Indemnity and Third Party Plans. This amount is based on projections of increased need.

Account:      MassHealth Standard

Line Items:  4000-0860 (also 4000-0500, 4000-0700)

The MassHealth Standard program is the largest MassHealth coverage group, and funding for the program spans several line items. Line 4000-0860 was created during Massachusetts's 1996 health care reform to cover the expense of new populations covered by expansions. MassHealth Standard provides the most comprehensive benefits package of any MassHealth program, covering 40 different services, including long-term care at nursing facilities, personal care, adult day health, and early intervention services.

The following groups are eligible for MassHealth Standard: children and adolescents with family incomes up to 150% of the federal poverty level (fpl); pregnant women and infants with incomes up to 200% of fpl; adults under age 65 with incomes up to 133% of fpl (including adults with disabilities); and seniors living in the community with incomes up to 100% of fpl. About 807,000 residents are enrolled in the program. About 160,000 adults with disabilities and 18,000 children with disabilities are members with MassHealth Standard coverage.

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0860	MassHealth Standard	246,937,392	295,630,000	332,786,452	369,747,220	390,030,100	389,892,223

FY01-FY05 Impact

In FY04, MassHealth Standard members faced new premiums and co-pays. As of November 1, 2003, families with incomes between 134-150% of fpl now pay premiums of $12 per child, though premiums for families with more than one child are capped at $15.

In FY05, spending on this line item increased by only 3.48%. There is now a proposal by the administration to impose additional asset tests as part of eligibility screening in the future.

FY06 Needs

In FY06, advocates will be working to lower premiums for children and stave off asset test requirements for adults.

H1 for FY06 Recommendations

The governor proposes to level fund this line item in FY06.

Account:      MassHealth Basic

Line Item:   4000-0870

The MassHealth Basic program is a stripped-down version of MassHealth Standard, providing a package of benefits that is more limited in amount, duration and scope.

To be eligible for MassHealth Basic, an individual must have income at or below 100% of the federal poverty level and be either a recipient of Emergency Aid to Elders, Disabled and Children (EAEDC) and/or a long-term unemployed client of the Department of Mental Health (DMH).

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0870	MassHealth Basic	214,230,819	234,970,000	219,823,000	92,100,000	111,642,118	56,372,203

FY01-FY05 Impact

In FY03, the majority of this program's 60,000 members were terminated (on April 1, 2003), as part of an effort to balance the budget during the state's fiscal crisis.

In FY05, the program received $111 million-an increase of 16.7% over FY04 spending-and served about 12,000 members.

FY06 Needs

Continuing coverage for MassHealth Basic recipients who are on EAEDC or clients of the Department of Mental Health will be important to advocates and legislators in FY06.

H1 for FY06 Recommendations

H1 for FY06 cuts the funding for MassHealth Basic in half. Advocates believe this is an indication that the administration intends to revamp EAEDC-and hence terminate crucial benefits for vulnerable immigrants, elderly people, and persons with disabilities-leaving fewer people eligible for MassHealth Basic. However, those who would lose EAEDC through these proposed changes may continue to be eligible for MassHealth Basic under H1's Outside Section 165. It is unclear how this grandfathering clause may work.

Account:      Healthy Start

Line Item:   4000-0895

The Healthy Start program provides prenatal care, outreach, information and referral, advocacy, post-partum care, and limited home visits to low-income pregnant women and infants who are ineligible for MassHealth. Program staff also help pregnant women and new mothers apply for MassHealth and Women, Infants, and Children (WIC) benefits. WIC is a federal-state nutrition program (for more information, see Department of Public Health chapter, line 4513-1002). Since it began 18 years ago, Healthy Start has been shown to reduce infant mortality and the incidence of low birth-weight babies.

Women eligible for the program have incomes below 200% of the federal poverty level (fpl). Services rendered up to 10 days prior to the date of application are covered. All applicants are screened simultaneously for Healthy Start and MassHealth.

Healthy Start primarily serves women who are not eligible for MassHealth due to their citizenship or immigration status. Those who do qualify for MassHealth are often eligible only for MassHealth Limited, a program that covers emergency services, including delivery of a baby.

The toll-free number for Healthy Start is 1-800-531-2229.

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4513-1005 (DPH)	Healthy Start	8,077,556	7,005,297	7,221,618	transferred	transferred	transferred
4000-0895	Healthy Start	--	--	--	6,213,532	14,213,532	15,447,686

FY01-FY05 Impact

In FY02, the program had to close enrollment mid-year due to under-funding, but a court order forced MDPH to re-open to new enrollees. In FY03 and FY04, the program received continued under-funding but kept enrollment open. Two program reductions occurred in July 2003 (as part of the FY04 budget). First, eligibility was reduced from 225% to 200% fpl. Second, the coverage start date was reduced from 30 to 10 days before the date of application.

In FY05, the state began receiving a 65% federal match for Healthy Start, and the program was funded at $14.2 million-a dramatic $8 million (128%) increase over FY04 funding. According to advocates at Health Care for All, this amount fully funds the program's costs and will cover all of the women who need the program in FY05.

H1 for FY06 Recommendations

In H1 for FY06, the administration recommends funding Healthy Start at $15.4 million-a 20% increase over projected FY05 spending-based on predictions that enrollment will increase.

Accounts:    MassHealth Essential and MassHealth Essential for Immigrants

Line Items:  4000-0896 and 4000-1405

The MassHealth Essential accounts fund two types of health insurance assistance programs,

MassHealth Essential Premium Assistance and MassHealth Essential Purchase of Medical Benefits (a direct coverage program). Members must enroll in the MassHealth Primary Care Clinician (PCC) program. The benefits are similar to MassHealth Basic, except that the following services are not covered: audiologist visits, chiropractic services, hearing aids, nurse-midwife services, orthotic supports, vision care and home health care. Participants pay no premiums, but are assessed co-payments for prescriptions and non-emergency medical services provided in an emergency room. Coverage begins for each accepted individual after he or she selects a primary care doctor.

Adults who are U.S. citizens, have incomes at or below 100% of the federal poverty level, have been unemployed for more than one year, and are not eligible for unemployment insurance can qualify for MassHealth Essential (line 4000-1405). A small group of "special status" adult legal immigrants who are either elders and/or people with disabilities are eligible for MassHealth Essential benefits that are funded in a separate account in FY05 (4000-0896).

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-0896	MassHealth Ess.: Imgrnts.	--	--	--	--	2,000,000^	0
4000-1405	MassHealth Essential***	--	--	--	O.S.: 160,000,000	O.S.: $160,000,000	119,377,890
Totals:		--	--	--	160,000,000	162,000,000	119,377,890

*** MassHealth Essential was moved on budget in H1 for FY06.

^      This amount includes a September 2004 supplemental appropriation for elderly and disabled immigrants only.

FY01-FY05 Impact

In FY03, under pressure of the state fiscal crisis, the legislature terminated most of the members of the MassHealth Basic program-this was part of a plan to eliminate MassHealth Basic effective April 2003. (36,000 lost coverage; those that remained had to be either DMH clients or recipients of state EAEDC benefits).

In FY04, under public pressure to restore coverage, the legislature created MassHealth Essential as a new program to serve the group that had lost MassHealth Basic coverage. Essential began enrollment in October 2003.

Also in FY04, benefits to most immigrant adults were terminated on August 1, 2003. (In 1996, most legal immigrants were made ineligible for federally-funded health insurance assistance programs as a result of welfare reform legislation. From 1996-July 2003, Massachusetts offered MassHealth coverage for more than 10,000 adult legal immigrants exclusively at state expense.) As part of an override of the governor's budget vetoes for FY04, MassHealth Essential coverage was extended to approximately 3,000 legal immigrants who were elderly or disabled. Coverage began in June 2004 and was only guaranteed through September 2004.

In the FY05 budget debate, advocates sought to extend MassHealth Essential coverage to the entire group of 10,000 immigrants who had lost coverage in 2003. Ultimately, proposals to cover the entire affected immigrant population were not included in the FY05 budget, but a September 2004 supplemental budget for FY05 allocated $2 million in a new account called MassHealth Essential for Immigrants (line 4000-0896) to continue coverage for the 3,000 elderly or disabled immigrants through June 30, 2005.

The governor vetoed half of the legislature's initial $4 million supplemental allocation. He also attached an amendment stipulating that only "sponsored immigrants" whose "sponsors were deceased or unable to support" them would be eligible. Although the amendment was never adopted by the legislature, the Office of Medicaid implemented the restriction by regulation and, in December 2004, sent notices to the affected immigrants asking for signed statements on their sponsors' incomes. Only those elderly and disabled legal immigrants whose sponsors' incomes are below 200% of the federal poverty line will retain their benefits during the remainder of FY05.

FY06 Needs

There is concern that the money allocated for MassHealth Essential for Immigrants (line 4000-0896) will run out in the spring of 2005.

H1 for FY06 Recommendations

H1 for FY06 places MassHealth Essential (line item 4000-1405) on budget and recommends funding at $119 million. While the proposed allocation appears to be a 25% cut from FY05 spending amounts, on closer examination we see that this is level funding for the program. Because the money will come from the Uncompensated Care Pool, it follows the hospital fiscal year of October 1, 2004-September 30, 2005. The dollars proposed in H1 for FY06 are intended only to cover the 9-month period from October 1, 2005-June 30, 2006. H1 for FY06 discontinues funding for MassHealth Essential for Immigrants (line item 4000-0896).

Account:      MassHealth for People with HIV

Line Item:   4000-1400

The MassHealth for People with HIV account covers people with HIV for primary care and early treatment and reduces the necessity for people to enroll in the HIV Drug Assistance Program (see Department of Public Health, lines 4512-0103 and 4512-0106).

Current eligibility for the program is set at 200% of the federal poverty level (fpl). Approximately 600 participants are enrolled.

Line Item	Description	FY01	FY02	FYO3	FY 04	FY05	H1 for FY06
4000-1400	MassHealth HIV	10,000,000	5,500,000	10,380,401	14,962,424	8,732,000	6,926,068

FY01-FY05 Impact

In FY04, two changes designed to control costs threatened this program. First, the income eligibility level was reduced from 200% to 133% of the fpl. As a result, more than 120 people lost coverage. Predictably, that led to more pressure on the Massachusetts Department of Public Health's (MDPH) HIV Drug Assistance Program. Second, new premium charges were introduced. In FY05, a third change-a proposed enrollment cap-was discussed but never implemented.

The FY05 budget contained mixed news. On the positive side, eligibility was restored back to 200% of fpl. However, the actual restoration did not take place until January 2005, when federal officials renewed the state's MassHealth waiver. Eligibility must now be expanded retroactively back to July 1, 2004 (the beginning of FY05).

In FY05, there was also a major funding loss of $6.2 million below than the FY04 allocation. The state also received federal permission to institute a flexible program enrollment cap set at 620-770 individuals-meaning that the state is allowed to close enrollment at 620 enrollees and required to do so when the number of participants reaches 770.

FY06 Needs

Advocates call for eliminating the enrollment cap for this program in FY06, both to secure needed treatment for low-income people with HIV and to reduce pressure on MDPH's HIV Drug Assistance program.

H1 for FY06 Recommendations

H1 for FY06 recommends again reducing spending for this account by $397,000, citing administration estimates of an anticipated reduction in demand for the program.

Special Section: Key Issues in Health Care

Many of the key issues currently debated in health care span the numerous MassHealth programs and funding streams. Other aspects of Massachusetts's public health insurance system are funded or regulated separately from the line items within the Office of Medicaid (MassHealth). Therefore, this People First volume includes a special section on cross-cutting issues and off-budget programs that impact the MassHealth coverage of persons with disabilities.

Issue:                       Adult Dental Health Benefits

Affected Lines:       all MassHealth programs

Relevant Section:   Outside Section 309 (FY05)

Prior to FY03, dental benefits were part of the coverage provided by almost all MassHealth programs. With the loss of dental coverage in December 2002, all adults on MassHealth, including 175,000 adults with disabilities, are unable to fix cavities, obtain dentures, or prevent serious infections. The only option available to most is to pay for their own dental care (which most program participants cannot afford), have their teeth extracted, or apply to the Office of Medicaid for a "special circumstances" exception (which is difficult to obtain).

Recent Developments

In FY03, all MassHealth preventive and routine care dental benefits for adults, and eventually dentures as well, were eliminated. About 550,000 people were affected. Children and a small number of adults who qualify under "special circumstances" are still receiving dental benefits. All other adults may access only "emergency dental services, extractions and oral surgery, and x-rays related to these services."[8]

Adults who lost coverage are enrolled in at least five different MassHealth programs: MassHealth Standard; CommonHealth (for persons with disabilities); MassHealth Basic; Family Assistance; and MassHealth Essential. Many members have faced medical problems, nutrition problems and other complications after not being able to obtain dental care, especially dentures and fillings. Some go without teeth and have had to change their diets as a consequence.

Even if dental coverage is restored to adult MassHealth members, obtaining services may be difficult because a shortage of dentists in the program is ongoing. It is believed that dentists would be more likely to join the MassHealth program if a third party negotiated reimbursement rates.

In the FY05 budget, Outside Section 309 directed the Executive Office of Health and Human Services (EOHHS) to issue a request for proposals that would allow a third-party administrator to negotiate MassHealth dental benefits-a promising step toward expanding the number of dentists willing to accept patients with MassHealth. The administration has until January 2006 to award a contract.

FY06 Needs

Restoring oral health care, dentures, and other non-emergency dental benefits for all adults on MassHealth is a top priority for advocates. The cost of adult dental coverage for one year is estimated at about $75 million (requiring $60 million in new funds)-half of which would be reimbursed by the federal government.[9]

H1 for FY06 Recommendations

H1 includes no funding for restoring "optional"-including dental-benefits. Because these cuts were imposed during the recent fiscal crisis and the state is now expecting an FY05 surplus in MassHealth funding, advocates will be working with the legislator to restore funding for these important benefits.

In Outside Section 155 of H1 for FY06, dental providers are given permission to limit the number of Medicaid patients they allow into their practice. The intent of this section is to increase the number of dental providers willing to accept MassHealth patients. Dentists are often unwilling to accept the paperwork requirements and the reimbursement rates offered by MassHealth.

Issue:                       Adult Vision Services

Affected Lines:       all MassHealth programs

Prior to FY03, vision benefits were part of the coverage provided by many MassHealth programs.

Recent Developments

Adults enrolled in MassHealth programs have not been covered for eyeglasses or other vision services since January 1, 2003. About 550,000 adults enrolled in the following programs continue to be affected: MassHealth Standard, CommonHealth, MassHealth Basic, Family Assistance, and MassHealth Essential. This includes more than 170,000 adults with disabilities, and those who need eyeglasses for reading, driving and working.

FY06 Needs

Restoring vision services is a top advocacy priority for FY06. The annual cost of coverage is estimated at about $4 million.[10] This gap in coverage is of particular concern to advocates for people with disabilities.

H1 for FY06 Recommendations

H1 does not include any funding for vision services.

Issue:                       Drug Prior Authorization

Affected Lines:       all MassHealth programs

Relevant Section:   Outside Section 305 (FY05)

The rising cost of prescription drugs has been a challenge for the MassHealth system. In an effort to slow expenditures on prescription drugs, in July 2002 the state began limiting access to brand name or other "non-preferred" medicines through an approved drug list. When prescribing medications not on the list, doctors must obtain what is called "prior approval" from MassHealth officials. The approved drug list has a disproportionately negative effect on individuals and families whose serious health needs require that they take a variety of medications to function. Only about two-thirds of applications for prior approval of prescriptions are approved.

Recent Developments

In the FY05 budget, Outside Section 305 required MassHealth to conduct a Drug Prior Authorization Study to determine the consequences of its drug prior authorization program by February 1, 2005. Although not made public at the time this report went to press, it is anticipated that the study may highlight some of the damaging effects the MassHealth approved drug list has had on individual persons with disabilities. A similar study was requested in the FY04 budget but never issued.

Also in the FY05 budget, the Commissioner of Mental Health retains the ability to oversee any "drug prior authorization policies" that affect psychiatric drugs.

FY06 Needs

In FY06, advocates and legislators will continue to monitor the prior authorization process and have proposed several bills to control the number and types of drugs that need prior authorization. According to advocates, when access to effective and/or innovative medications is restricted, especially those for acute mental illness, the long-term result is often more costly inpatient treatments and emergency services.

H1 for FY06 Recommendations

H1 retains language from the FY05 budget within the MassHealth administration account (line item 4000-0300) that requires the Department of Mental Health (DMH) commissioner to approve any prior authorization or other restriction on medication used to treat mental illness that is issued by MassHealth programs.

Issue:                       Children's Premiums

Affected Lines:       MassHealth Standard(4000-0860)

                                 CommonHealth (4000-0430)

                                 Family Assistance (4000-0880)

All children covered by several MassHealth programs-including MassHealth Standard, CommonHealth, and Family Assistance are now charged premiums based on their family incomes.

Recent Developments

In FY03, MassHealth introduced monthly premium charges for children with family incomes above 150% of the fpl-impacting nearly 9,000 children-many of whom have disabilities or parents with disabilities.

FY06 Needs

Advocates and several legislators would like to see premiums for lower-income families decreased or eliminated in FY06.

H1 for FY06 Recommendations

No changes to premiums for children on MassHealth are included in H1.

Issue:                       MassHealth Personal Care Attendant (PCA) Services

Affected Lines:       all MassHealth Programs that serve people with disabilities

The Personal Care Attendant (PCA) program provides persons with disabilities of all ages with assistance in basic daily tasks like dressing, transfers, and bathing. PCAs, who are paid by MassHealth, allow many individuals to remain in the community and some to participate more fully in the workforce. Independent Living Centers (ILCs) evaluate individuals for program participation. Those who do participate usually train and hire their own PCAs. Currently more than 11,000 MassHealth members receive PCA assistance.

Recent Developments

During FY04 and FY05, the administration threatened to tighten eligibility requirements for the PCA program. In the H1 for FY05 budget, language was proposed to "amend or develop new standards and regulations for PCAs." Because this language would have made eligibility stricter and changed how screening is done, advocates feared it would cause the loss of valuable service hours. These program changes were ultimately blocked.

In FY05, advocates also attempted to stop adverse program changes by introducing language requiring MassHealth to consult with stakeholders before making changes to PCA eligibility standards. The provision was vetoed and not overridden.

FY06 Needs

Advocates will continue working to block changes to eligibility for or benefits of PCA services in FY06. On many occasions, the administration has been generally supportive of expanding the PCA program so that more people with disabilities are cared for at home.

H1 for FY06 Recommendations

No changes in eligibility for or benefits of PCA services are recommended in H1.

Issue:                       MassHealth Enrollment Caps

Funding Sources:    CommonHealth                                        (4000-0430)

                                 Insurance Partnership                             (4000-0890 and 4000-0891)

                                 MassHealth for HIV Positive Persons   (4000-1400)

                                 MassHealth Essential                              (4000-1405)

Relevant Section:   Outside Section 241 (FY05)

 

The federal government has authorized MassHealth to impose enrollment caps-limits on the numbers of adults who may enroll, regardless of whether a program's funding allocations have been exhausted-in CommonHealth, the Insurance Partnership, MassHealth for HIV Positive Persons, and MassHealth Essential. The state legislature has granted authority for such decisions to the Executive Office of Health and Human Services (EOHHS). Only MassHealth Essential currently has an enrollment cap of 44,000 individuals.

Recent Developments

In FY04, enrollment caps were proposed but did not get implemented for MassHealth for HIV Positive Persons, CommonHealth and the Insurance Partnership. So far, EOHHS has decided not to implement caps in any program besides MassHealth Essential.

In FY05, Outside Section 241 of the Conference Committee budget would have repealed EOHHS's legislature-granted authority to set enrollment caps. Because the administration wants to retain its authority to cap enrollments and thereby control MassHealth spending, the language was vetoed and not overridden.

FY06 Needs

Preventing enrollment caps continues to be a top advocacy priority for health care advocates and advocates for people with disabilities in FY06.

H1 for FY06 Recommendations

In H1 for FY06, line item language in the MassHealth Essential account (4000-1405) expressly gives the secretary of EOHHS permission "to limit or close enrollment if necessary in order to ensure expenditures from this item do not exceed the amount appropriated herein." It is not specified whether enrollment caps will be issued for other programs.

Issue:                       MassHealth Asset Testing

Funding Sources:    all MassHealth programs, with particular impacts for CommonHealth (4000-0430)

Current eligibility guidelines for MassHealth only take into account the income level of applicants under age 65 (those over age 65 must "spend down" their assets in order to be eligible for benefits). As part of its campaign against "fraud" in the system, the administration believes that new asset limits will prevent those with higher resources from enrolling in MassHealth and has applied for federal permission (still pending) to allow this program change.

Asset testing would create barriers to care in particular for persons with disabilities enrolled in the CommonHealth program (4000-0430). Many CommonHealth members qualify for services not based on income but instead on medical necessity or categorical disability. These individuals "buy-in" to the program-in other words, they pay premiums to participate. Disability advocates are concerned that if asset testing is implemented, these individuals may be faced with losing all of their savings to health costs before they could re-qualify for the program. An asset test may particularly burden parents of adult children with disabilities and working adults with disabilities, who would need to pay for uncovered health care costs out-of-pocket.

Recent Developments

In FY04, the Office of Medicaid was given permission by the legislature to look at the level of assets held by all MassHealth enrollees ages 19-64. The Conference Budget for FY05 included language calling for a study to look at the effects of implementing an asset test on working adults with disabilities enrolled in the CommonHealth program. The study, supported by advocates as a vehicle to document the difficulties caused by such a test, was vetoed and not overridden.

Administration officials have indicated that they will not implement an asset test for adults under age 65 in FY05.

FY06 Needs

In FY06, advocates have not determined if action is needed to fight an asset test.

H1 for FY06 Recommendations

It is not specified in H1 whether an asset test will be required for adults ages 19-64 to qualify for MassHealth programs.

Issue:                       MassHealth Disability Waiver

Funding Sources:    Primarily MassHealth Standard (4000-0860 and 4000-0500) and CommonHealth (4000-0430)

 

When the Office of Medicaid wishes to implement a program change that differs from federal standards for the Medicaid program, it must apply for a waiver.

Recent Developments

In FY04, EOHHS applied for a waiver that would allow use of a MassHealth eligibility standard for people with disabilities that is more restrictive than the current disability standard used by the federal Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) programs. The waiver is still pending with the federal Center for Medicare and Medicaid Services (which has taken no action on the request).

In November 2003 (during FY04), 43 provider and other organizations sent a letter to the federal government opposing such a waiver. Several members of Congress also expressed opposition to the proposed change, saying it was a dangerous threat to health care access for people with disabilities. Advocates believe it would shift the burden of proof of disability onto the patient, hence eliminating an important protection for people with disabilities who want to work but cannot afford health coverage without MassHealth benefits.

If the change is approved, the disability review process would change in two ways-the frequency of re-determination and the number of people with disabilities who qualify for MassHealth. The Office of Medicaid expects to save $20 million as a consequence of these restrictions on eligibility, which would make Massachusetts's standard among the most restrictive in the nation.

FY06 Needs

Advocates believe that MassHealth officials are still interested in changing disability standards for MassHealth eligibility. The Mass. Law Reform Institute and Health Care for All are working to prohibit any changes in eligibility for MassHealth for people with disabilities.

H1 for FY06 Recommendations

No language in H1 indicates whether a waiver changing standards of eligibility for persons with disabilities will be approved or implemented in FY06.