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Office of Medicaid (MassHealth)

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0352	MassHealth Enroll. Outrch.	(1,000,000 earmark: line 4000-0310)	0	250,000	500,000
4000-0430	CommonHealth	42,112,325	83,224,049	75,246,379	84,396,753
4000-0500	Managed Care	1,490,620,301	2,319,197,919	1,977,150,989	2,074,169,186
4000-0600	Sr. Care Plans**	1,648,865,785	1,697,117,500	1,783,969,375	1,825,981,999
4000-0620	Sr. Care Options**	--	83,275,500	86,777,546	67,998,937
4000-0625	HHA Rate Increase**	--	4,000,000	0	67,000,000
4000-0700	Indemnity/3rd Party Plans	736,800,329	1,239,530,000	1,498,059,398	1,580,139,483
4000-0860	MassHealth Standard	246,937,392	390,030,100	389,892,223	391,509,801
4000-0870	MassHealth Basic	214,230,819	111,642,118	56,372,203	61,326,314
4000-0895	Healthy Start	8,077,556^^	14,213,532	15,447,686	15,991,921
4000-0896	MassHealth Ess.: Imgrnts.	--	2,000,000^	0	0
4000-1400	MassHealth HIV	10,000,000	8,732,000	6,926,068	7,589,164
4000-1405	MassHealth Essential***	--	OutsideSection: $160,000,000	119,377,890^^^	129,567,170^^^
** These accounts are overseen by the Department of Elder Affairs (DEA). See the 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. ^^ FY01 funding for Healthy Start was allocated in the Mass. Department of Public Health, line item 4513-1005. ^^^ Because the money for 4000-1405 in FY06 will come from the Uncompensated Care Pool, it follows the hospital fiscal year of October 1, 2004–September 30, 2005. Hence, the dollars proposed in H1 for FY06 and the House budget are intended only to cover the 9-month period from October 1, 2005–June 30, 2006.

This chapter focuses on the House of Representatives’ FY06 budget recommendations for programs serving persons with disabilities within the Office of Medicaid (MassHealth). For additional information on the impacts of FY01–FY05 budget cuts and more details about program services, go to the People First website at www.mass.gov/mddc/peoplefirst/index.html and click on the Office of Medicaid chapter in the Volume I table of contents.

HOUSE BUDGET OVERVIEW

House Budget Inadequate to Meet Need

House budget spending for MassHealth in FY06 would total approximately $6.945 billion. Although it appears that this amount is greater than that in H1 for FY06, the apparent increase is mainly due to a difference in how the two budgets account for carry-over funds from FY05. In fact, proposed House budget MassHealth spending is about equal with that in H1 for FY06. Neither budget has major initiatives to address the health care coverage needs of the 500,000 uninsured residents of Massachusetts. The House budget is meant to accommodate an enrollment increase from 980,000 to 1 million people. Given health care inflation rates close to 8%, this goal may be unrealistically optimistic within the proposed allocation.

The House budget does not restore benefits and eligibility cuts imposed over the last few years. Coverage of adult dentistry and eyeglasses, a priority for disability advocates, is not restored. Enrollment caps remain in place for CommonHealth, the MassHealth HIV Program, and the Insurance Partnership. An enrollment freeze is likely for MassHealth Essential, a managed care program for long-term unemployed adults, which included many long-term DMH consumers. The House budget neglected to extend MassHealth coverage through age 20 for the approximately 600 youth who “age out” of DSS foster care each year, a serious burden for these youth as they exit this system.

The House budget maintains last June’s restoration of coverage to 3,000 elderly and disabled legal immigrants. H1 for FY06 would have terminated coverage for these individuals. The House budget also restored $86 million to the “off-budget” uncompensated Care Pool that provides funding to reimburse hospitals for free care to low-income and uninsured people.

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 of eligible but uninsured persons in MassHealth programs. One of these programs is CommonHealth.

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0352	MassHealth Enroll. Outrch.	(1,000,000 earmark: line 4000-0310)	0	250,000	500,000

FY06 Needs

Approximately 100,000 people in Massachusetts, including more than 5,000 adults with disabilities, may be eligible for CommonHealth (see line item 4000-0430, below) but not enrolled.

House Budget Recommendations

The House budget funds this new account at $500,000. While it is an increase of $250,000 over H1 for FY06, similar programs in the past have received $1 million and more.

Account: CommonHealth
Line Item: 4000-0430

The CommonHealth account funds health insurance for some children with disabilities and for adults with disabilities who are employed or seeking employment. Participants with incomes above 150% of the federal poverty level are charged sliding-scale premiums.

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0430	CommonHealth	42,112,325	83,224,049	75,246,379	84,396,753

FY06 Needs

The CommonHealth program currently operates with a flexible enrollment cap of 11,850–13,000 adults. That means that the Office of Medicaid can close enrollment when it reaches 11,850 persons and must do so when the program has 13,000 enrollees. However, the agency so far has chosen not to implement the enrollment cap, and as of November 2004 the program had 14,900 enrollees. Repealing enrollment caps for CommonHealth is a priority. Additionally, advocates are concerned that aggressive Disability Determination Reviews have found fewer people disabled and have consequently depressed enrollment.

House Budget Recommendations

The House budget recommends $84.4 million, $1.2 million (1.4%) more than FY05 funding and $9.2 million more than in H1 for FY06. The administration predicts a $4.6 million FY05 surplus in this account.

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). Claims for the state’s primary care clinician plan, mental health and substance abuse program, and HMO plans are also covered. Enrollees are more than 500,000 adults and children.

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0500	Managed Care	1,490,620,301	2,319,197,919	1,977,150,989	2,074,169,186

House Budget Recommendations

The House budget funds this account at $245 million (10.6%) less than FY05 funding and 4.9% more than the governor’s FY06 proposal. H1 for FY06 cut this account by $302 million (14%) from projected FY05 spending. Because some funds may be transferred among accounts, the cuts do not necessarily amount to service reductions.

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.

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 and for the premiums of members with employer-sponsored insurance. About 85,000 of the 130,000 adults and children covered are people with disabilities.

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0700	Indemnity/3rd Party Plans	736,800,329	1,239,530,000	1,498,059,398	1,580,139,483

FY06 Needs

Expenditures in FY05 are projected to be $32 million lower than appropriated, leaving a surplus. Budget analysts report that starting in FY06, the MassHealth Medicare Buy-In program (formerly off-budget) will be incorporated into this line item and reflected in the line item appropriations.

House Budget Recommendations

H1 for FY06 allocates $290 million in additional funds for the Indemnity and Third Party Plans. The House budget allocates $82 million more than does H1 for FY06.

Account: MassHealth Standard
Line Items: 4000-0860

The MassHealth Standard program is the largest MassHealth coverage group with the most comprehensive package of benefits, including long-term care, personal care, adult day health, and early intervention services. About 807,000 residents are enrolled in the program, of which about 160,000 are adults with disabilities and 18,000 are children with disabilities.

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0860	MassHealth Standard	246,937,392	390,030,100	389,892,223	391,509,801

FY06 Needs

In FY04, MassHealth Standard members faced increased premiums and co-pays, resulting in loss of coverage and barriers to enrollment. Restoring premiums to their original levels is a priority. Although the administration had proposed additional asset tests as part of adult eligibility screening, it has reportedly committed not to implement the tests in FY05. Advocates consider the issue safe for now.

House Budget Recommendations

Both the House budget and H1 for FY06 essentially level fund MassHealth Standard with the FY05 level. The House budget did not reduce the amount families must pay in premiums.

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.

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0870	MassHealth Basic	214,230,819	111,642,118	56,372,203	61,326,314

FY06 Needs

In 2003, as a result of budget cuts, 36,000 of MassHealth Basic’s 60,000 members were terminated from coverage. By FY05, only approximately 12,000 persons were enrolled.

House Budget Recommendations

The House budget does not support proposals for imposing work requirements on most adults with disabilities who are enrolled in the Emergency Aid to Elderly, Disabled, and Children program (EAEDC). These people receive MassHealth Basic. The change likely would have caused many to lose benefits for noncompliance due to inability to work. H1 for FY06 reduces funding by 50% from FY05 funding, based on estimates of declining enrollment due to H1 for FY06 proposed policy changes. The House budget proposes a 45% cut.

Account: Healthy Start
Line Item: 4000-0895

The Healthy Start program provides prenatal care to low-income women and infants who are ineligible for MassHealth.

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0895	Healthy Start	8,077,556^^	14,213,532	15,447,686	15,991,921
^^ FY01 funding for Healthy Start was allocated in the Mass. Department of Public Health, line item 4513-1005.

FY06 Needs

Advocates anticipate that current FY05 funding will fully covers costs and enrollment.

House Budget Recommendations

The House budget for Healthy Start in FY06 is $544,235 (3.5%) over that in H1 for FY06 and 25% more than projected FY05 spending, to cover an anticipated caseload increase.

Accounts: MassHealth Essential and MassHealth Essential for Immigrants
Line Items: 4000-0896 and 4000-1405

MassHealth Essential provides basic managed care coverage for long-term unemployed adults below the poverty line. All of the beneficiaries would be eligible for the Uncompensated Care Pool if not enrolled in MassHealth Essential. Mass Health Essential for Immigrants has provided coverage for elderly or disabled adult legal immigrants since June 2004. (The new program represented a limited success for efforts to restore benefits to the entire group of 10,000 immigrants who had lost state-funded coverage in 2003.) These benefits were extended to June 2005 through a FY05 supplemental budget.

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-0896	MassHealth Ess.: Imgrnts.	--	2,000,000^	0	0
4000-1405	MassHealth Essential***	--	OutsideSection: $160,000,000	119,377,890^^^	129,567,170^^^
Totals:		--	162,000,000	119,377,890	129,567,170
*** MassHealth Essential was moved on budget in H1 for FY06. ^ This amount includes a September 2004 supplemental appropriation for elderly and disabled immigrants only. ^^^ Because the money for 4000-1405 in FY06 will come from the Uncompensated Care Pool, it follows the hospital fiscal year of October 1, 2004–September 30, 2005. Hence, the dollars proposed in H1 for FY06 and the House budget are intended only to cover the 9-month period from October 1, 2005–June 30, 2006.

FY06 Needs

There are two key issues for these accounts. First, enrollment for MassHealth Essential is restricted due to insufficient program allocations. At current annual funding of $160 million, advocates report that the program will have to freeze enrollment at about 44,000 people by the summer of 2005. Consequently, an estimated 12,000 eligible people will be placed on a waiting list and unable to get coverage. Funding needs to be substantially increased. Second, 7,000 low-income elderly and disabled immigrants who lost coverage in 2003 remain uncovered. Tough rules (implemented through agency practices) regarding immigrant sponsor income limits have become significant barriers for thousands of otherwise eligible persons. Removing these rules is a priority of advocates.

House Budget Recommendations

Both the House budget and H1 for FY06 place MassHealth Essential on-budget. The House budget allocation for MassHealth Essential is close to level funding. While it appears to be a significant cut from FY05 spending, the smaller amount is only intended to cover a 9-month period (see the explanatory footnote in the line item chart above). The House budget allocation is slightly more than $10 million (8.5%) over the figure in H1 for FY06. Advocates supported an amendment during House debate to increase this account’s allocation by an additional $17 million, but it did not pass.

While H1 for FY06 discontinues coverage for the 3,000 enrollees in MassHealth Essential for Immigrants (line item 4000-0896), the House budget continues coverage for this group. The House budget also adds $9 million (in line item 4000-1405) above the FY05 appropriation to provide full coverage for this group in FY06. The House budget reflects an amendment adopted during debate, which prohibits MassHealth from imposing any restrictions based on the immigrant’s sponsor’s income.

Account: MassHealth for People with HIV
Line Item: 4000-1400

The MassHealth for People with HIV account covers approximately 600 people with HIV for primary care and early treatment and reduces the necessity for them to enroll in the HIV Drug Assistance Program (see Department of Public Health, lines 4512-0103 and 4512-0106).

Line Item	Description	FY01	FY05	H1 for FY06	House Budget for FY06
4000-1400	MassHealth HIV	10,000,000	8,732,000	6,926,068	7,589,164

FY06 Needs

In FY05, the state received federal permission to institute a flexible program enrollment cap set at 620–770 individuals—the state may close enrollment at 620 enrollees and is required to do so at 770 enrollees. Advocates call for eliminating the enrollment cap in FY06, to secure needed treatment for low-income people with HIV and to reduce pressure on MDPH’s HIV Drug Assistance program.

House Budget Recommendations

The House budget decreases funding by $1,142,836 (13%), because the administration is anticipating a reduction in demand for the program. The House budget allocation is $663,096 (9.5%) over that in H1 for FY06.