The Massachusetts Bailout

While our attention has been riveted on the Congress and its struggles with the enormous proposed bailout for the nation's financial markets, the federal Department of Health and Human Services has quietly approved a three-year renewal of a Medicaid waiver for the Massachusetts health care program. Remarkably, amid intense concern for the impact that massive amount of bailout funds would have on the federal government's budget, the three-year renewal also included a $4.3 billion increase over the next three years!

The Massachusetts program essentially follows a dual track to achieve the goal of universal coverage: Most employers are mandated to provide health insurance for their employees or face stiff penalties; while, individuals must buy health insurance on the market, unless they qualify for subsidized coverage from the state. To date, roughly two-thirds of the 650,000 formerly uninsured have secured coverage. While the View is not a big proponent of this program, we will acknowledge that the coverage is provided primarily by private insurance companies, which, at least, prevents the birth of a whole new bureaucracy. Unfortunately, that is about the limit of the good news.

Governor Patrick speaks of "our commitment to affordable, accessible, high-quality health care for every man, woman and child in the commonwealth." A very noble pronouncement, but what is missing is any reference to the growing costs of the program. If any of you have had to purchase individual health insurance, you are well aware of the cost of these programs, driven by the high cost of our health care system.

The state's way of dealing with this expense is to provide free, or subsidized coverage through its Commonwealth Care program. One of the issues during the renewal negotiations was the fact that Commonwealth care provides subsidized coverage for people making up to three times the poverty level, while the federal limit is two times. This means for example, that a family of four making less than $63,500 per year qualify for subsidized coverage. No wonder people are rushing to enroll. Well over half of the new enrollees have signed up for free or subsidized coverage.

It's not clear at this point how the federal government justifies this this renewal, especially without getting a reduction to the income eligibility threshold. Maybe the folks at Health and Human Services have been too busy to tune into C-Span and its coverage of all the dire predictions for financial ruin. Oh and by the way, many commentators have pointed out that provisions of the Massachusetts health plan bears a strong resemblance to that being proposed by Barack Obama for the whole country.