When it comes to health care in the Trump era, Republican Gov. Charlie Baker is acting more like his moderate predecessors than the conservatives trying to bust up Obamacare at the federal level.
Baker broke hard with his party Tuesday, warning that the federal health care bill currently working its way through Congress could cost Massachusetts billions of dollars if enacted in it’s current form. The state’s top Republican sent a letter to the Massachusetts’ Congressional delegation saying that the American Health Care Act could mean $1 billion dollars less in federal revenue coming into the state in 2020, and almost $2 billion dollars could be annually missed by 2020.
At a hearing in Roxbury on the state’s upcoming budget plan, Baker’s Health and Human Services Secretary Marylou Sudders said just under half a million people may lose health care coverage under the GOP plan.
“The American Health Care Act, as it’s currently formed, does not serve both the affordability of coverage and coverage of our residents. So we’re doing everything possible to work with our delegation to ensure that this is not passed in it’s current state,” Sudders said, speaking for the Baker administration.
Massachusetts has no Republican representatives in Congress, so it’s unclear how much influence or opportunity the delegation will have to change the bill.
Under Baker’s plan 57 percent of of the state budget would go to Health and Human Services, the umbrella office that embraces agencies like the Department of Children and Families, the Department of Public Health, and the state’s Medicaid program MassHealth.
When asked if the state is prepared to fill in it’s own revenue in place of dwindling federal support, Sudders recommitted to the idea that Massachusetts is a leader in near-universal health insurance coverage.
“We believe first in coverage, then second in how do you make it affordable and transparent. And we will need to deal with all three of those issues going forward,” Sudders said.
Sudders also came before lawmakers to defend Baker’s plan to penalize employers that don’t offer enough health care coverage for their employees. Baker has proposed a $2,000 per employee fine on businesses of over 11 employees if the business does not employ 80 percent of their full-time staff or fails to offer health insurance.
MassHealth takes up an increasingly larger portion of the state’s budget every year, crowding out other areas state leaders want or need to invest in.
The Medicaid program outpaces the state’s revenue growth every year and Sudders said 85 percent of that growth is through enrollment, not inflating costs for current users.
The state has had steady population growth, with a stellar unemployment rate and near-universal insurance coverage, factors that lead Baker to pressure employers to provide health care options to discourage working people from choosing state-subsidized insurance.
READ THE TEXT OF BAKER’S LETTER TO THE MASSACHUSETTS CONGRESSIONAL DELEGATION:
Dear Delegation Member,
Health care is once again at the forefront of national and state policy discussions; I know we all share
the goal of ensuring access to quality, affordable health care coverage for the people of Massachusetts.
With Congress set to take up the American Health Care Act (AHCA) imminently, I wanted to share with
you my administration’s analysis of the potential effects this bill would have on our state.
The Congressional Budget Office (CBO) released its score of the AHCA on March 13. This analysis is
broadly consistent with concerns we have raised, with you and others, regarding the bill’s impact on the
state and its residents’ access to affordable healthcare. Applying CBO’s assumptions to Massachusetts
results in at least $1 billion of reduced federal revenue beginning in 2020, and we estimate reduced
revenue of $1.3 billion in 2021, and $1.5 billion in 2022, with likely a greater annual impact in the years
that follow.
Specifically, our estimate extrapolated from the CBO analysis of a $1.5 billion impact for FY 2022
includes $1.3 billion of annual MassHealth federal revenue losses and $200 million in annual reduced
federal subsidies for private insurance through the Connector.
Several key areas of concern for Massachusetts were not included in the CBO analysis and could further
impact the Commonwealth’s budget. For example, the CBO estimate does not address 1115 waiver
payments that we believe this bill would put at risk. By FY22, the Commonwealth estimates an
additional $425-475 million per year of reduced federal revenue in potential elimination of 1115
payments not captured under the per capita targets, including federal matching funds for a state-run
ConnectorCare Wrap subsidy.
The actual experience for these and other factors is significantly dependent on how the U.S. Department
of Health and Human Services implements the legislation and unpredictable factors in the future (e.g.,
pharmaceutical growth).
In addition to reduced federal revenue for Medicaid, the CBO also projects a reduction in employer-
sponsored health insurance of 7 million people nationwide as a result of the repeal of the federal
Employer Mandate. This would exacerbate a trend that Massachusetts has seen over the last several
years. Massachusetts repealed the Chapter 58 Fair Share Contribution in 2013 in order to comport with
the ACA. My administration has proposed reinstating an employers’ shared responsibility for the costs
of health care. This would be increasingly important if the federal Employer Mandate were repealed, as
the AHCA proposes.
The Commonwealth does have certain protections in place that could mitigate the impact of some of
these changes. Massachusetts retains its individual health insurance mandate, reducing the likelihood
that many people would drop out of the insurance market due to the repeal of the federal mandate.
Massachusetts also has protective insurance coverage laws that would not be superseded by the federal
legislation.
The AHCA includes a provision that would prevent Medicaid from reimbursing Planned Parenthood for
providing important health services such as cancer screenings. My administration opposes this
provision, and has already committed to funding these services with state dollars if it should pass.
During conversations with governors across the country, the Trump Administration has expressed a
general openness to providing greater state flexibility with respect to health care, including through a
letter issued by HHS Secretary Price on March 14 to states. Our administration will pursue additional
flexibilities to stabilize our markets and ensure continued coverage for residents and we urge you to
support these efforts by leading discussions in Congress to ensure the people of Massachusetts continue
to have access to a quality health care system.
Overall, our analysis indicates that the AHCA would increasingly strain the fiscal resources necessary to
support the Commonwealth’s continued commitment to universal health care coverage. I hope this
information is helpful to you as Congress takes up the American Health Care Act.
My administration and I will continue to stay in touch with you as we work together to ensure access to
quality, affordable health coverage for all Massachusetts residents.
Sincerely,
Charles D. Baker
Governor
