As many states consider new cuts to their Medicaid programs to compensate
for larger-than-expected drops in revenue, Massachusetts is celebrating the
decision of federal officials to grant a Medicaid waiver that would allow
broader access to the commonwealth's unique health insurance program.
Massachusetts will be able to expand its first-in-the-nation health care
program because federal officials have agreed to provide a $10.6 billion boost
over the next three years, according to Massachusetts officials.
"This is an exceptional outcome under any circumstances, especially
so now," said Gov. Deval Patrick (D) at a press conference announcing
the Medicaid funding. "The American economy is in turmoil, and the
future is uncertain. But even in tough times, we cannot afford to abandon our
commitment to affordable, accessible, high-quality health care for every man,
woman, and child in the commonwealth. Thanks to this agreement, we can keep
The waiver from Medicaid's standard funding and benefit formula for states
followed months of negotiations between Massachusetts and federal officials.
It will provide Massachusetts with about $2.1 billion more over the next three
years than it received from the federal government three years ago in its last
Medicaid waiver package.
The waiver allows Massachusetts to provide subsidized health insurance to
some residents with incomes higher than would typically be allowed under
traditional Medicaid rules.
The funding boost came as state leaders were scrambling to cover a
substantial budget shortfall.
The agreement with the federal government also allows Massachusetts to
spend $5 billion over the next three years, or about $1 billion more than
previously allowed, on its newly created programs. The amount was $2 billion
less than Massachusetts requested last December, but it was described as
sufficient because enrollment in the expansive Massachusetts health insurance
program has slowed in recent months.
Massachusetts' legislative leaders said the agreement will provide crucial
support for the state's historic health care reform law, which was enacted in
2006 and requires nearly every resident to have coverage (Psychiatric
News, July 4).
"The waiver enables the state to continue to provide good, affordable
health care to families and provides additional funding and flexibility to
build on these early successes in the years to come," said Sen. Edward
Kennedy (D-Mass.) in a written statement. "We've made major progress in
the program's first two years, cutting the number of uninsured in half, and
increasing employer-sponsored coverage."
The Massachusetts insurance program will inform the national health reform
debate in 2009, Kennedy said.
The Massachusetts agreement runs counter to the recent experience of many
other state Medicaid programs in which state officials are fighting with
federal officials for the right to extend subsidized health insurance to
people with incomes higher than is traditionally allowed under Medicaid rules.
Massachusetts is one of the few states to offer Medicaid coverage to residents
with higher incomes than normally allowed by the federal government.
Massachusetts was granted permission to amend its Medicaid program in 2006
to provide subsidized health insurance to individuals making up to 300 percent
of the federal poverty level, or roughly $31,000 for a single person and
$63,600 for a family of four in 2008.
That eligibility standard made thousands more residents eligible for health
coverage that is at least partially subsidized by the federal government. That
provision was renewed under a key part of the recent waiver package.
Over the last two years, the Massachusetts health care insurance law has
moved nearly 440,000 more residents into coverage, about half of whom were
enrolled in employer-sponsored programs. The larger-than-expected number of
residents who are still uninsured, however, led to a $130 million funding gap,
which Massachusetts officials are working to close, in part, through increased
premiums and copayments for residents who receive subsidized coverage.
The commonwealth has put off a plan to require employers to boost the
amount they were paying for their employees' insurance.