Gov. Baker offers plan to overhaul state's Medicaid program

Ebony Scott
June 21, 2017

Gov. Charlie Baker is scrapping his controversial plan for a new $2,000 per-employee fee on businesses that don't offer health insurance in favor of a new proposal his aides say would instead hike existing fees and could generate $200 million.

In a letter to the Democratic heads of the powerful House and Senate Ways and Means committees, Massachusetts Secretary of Administration and Finance Kristen Lepore said the administration's recent efforts to rein in health care spending have helped slow spending, but that more needs to be done.

The new proposal calls for a temporary, two-year increase to what's called the Employer Medical Assistance Contribution, or EMAC, which companies with six or more employees now pay. All of companies in that class would pay up to $77 in EMAC per employee rather than the current maximum of $51.

Together, the changes could generate $200 million next fiscal year, with a clause to end the program at the close of calendar year 2019.

Administration officials are calling for several other changes to MassHealth - including toughening eligibility rules and covering fewer prescription drugs - which they project will save the state another $115 million per year. The Retailers Association of MA is pushing lawmakers to reinstate the holiday this summer, arguing that the state's retailers can't afford to go another year without the ability to entice customers with a tax break.

MassHealth, which provides health insurance to roughly 1.9 million MA residents, is on pace for 1.4 percent enrollment growth in fiscal 2017. Sudders said that with the insurance reforms also pitched in the proposal she believes the agency can hold enrollment growth to 1.6 percent in fiscal 2018.

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Some of the administration's new proposals require federal approval, which they plan to seek this summer.

Those proposals would bar non-disabled adults who have access to employer health care from joining the MassHealth rolls, as well as aligning MassHealth more closely with commercial plans.

Sudders said she would hope, if the Legislature approves, the state could submit a finalized waiver application in August and be on track for final approval by late fall.

The final part of the proposal comes with no savings attached, but the administration hopes it will slow the growth in overall health care costs in MA.

The plan would also impose a five-year moratorium on new insurance mandates, make changes that would let the state take advantage of federal subsidies and create a temporary employer contribution toward the cost of public coverage for workers.

Other reports by GizPress

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