BOSTON (SHNS) – Calling it a “critical” concern, Gov. Charlie Baker said Thursday he is planning a series of reforms targeting the MassHealth program, which accounts for about 35 percent of the $36.5 billion state budget.

Baker said the program is seeing 13 percent spending growth this year and negatively affects the rest of state government. The state-federal Medicaid insurance program serves low- and moderate-income individuals as well as the disabled and elderly.

“It’s critical not just for the MassHealth program but for the rest of health and human services and the rest of state government, and local government, by the way, that we bring this program into some degree of financial sustainability and integrity, because if we don’t solve that problem, we’re going to create all kinds of issues for ourselves everywhere else in the state budget,” Baker told business officials gathered at a Greater Boston Chamber of Commerce breakfast.

Baker said he’s planning “major initiatives” around MassHealth as well as other health care reforms focusing on increased transparency.

“We’re going to be making a lot of the data the state collects more publicly available, and we’ll be rolling that out over the course of the next few months through a series of initiatives,” Baker told reporters after the breakfast.

Enrollment in MassHealth was expected to hit 1.7 million in 2015. It cost an estimated $13.7 billion in the $36.5 billion fiscal 2015 budget. The health and human services secretariat budget, with MassHealth included, is about $19 billion. Baker’s first budget proposal, for fiscal year 2016, is due by March 4.

In tackling MassHealth, the new governor will be targeting a cost center in state government but also a program viewed as a critical safety net for many vulnerable populations. Over the years, Democrats who control the state Legislature have worked to protect and expand benefits under the program.

Jay Gonzalez, who served as Gov. Deval Patrick’s budget chief, attended the breakfast and agreed that the program is currently “unsustainable.”

Gonzalez, who is now president and CEO of CeltiCare and New Hampshire Healthy Families, said “hard decisions” will be required and he is glad to see reform is a priority. CeltiCare contracts with MassHealth.

  • For full video of Baker’s speech, click here.
  • For video of Baker’s Q&A session with the audience, click here.

“On some level, I sort of feel a little bit like this is back to the future,” said Baker, who served in Gov. William Weld’s cabinet before becoming a health insurance executive. “I mean, when I joined state government in 1991, which at this point was a million years ago, Medicaid was a huge problem back then and the growth of Medicaid spending was taking money away from everything else the Commonwealth was doing, and I sort of feel like I’m walking right back into the same situation I left back then.”

Baker told reporters that a series of reforms back then put the program’s growth levels back at the same level as the rest of state government, “and that made possible a whole series of investments in education, and childcare and a whole bunch of other things.”

The size of the $768 million budget deficit for fiscal 2015, which Baker inherited upon taking office, was a “big surprise,” Baker told the Greater Boston Chamber of Commerce, adding that it was driven in part by a “botched” roll-out of the federal Affordable Care Act and the issues with the Health Connector website.

Because of the failure of the federal Affordable Care Act roll-out in Massachusetts, the state went over a year and a half without determining eligibility for the MassHealth insurance program, according to Baker.

As part of his efforts to bridge a fiscal 2015 budget gap, Baker said this week he will restart the eligibility re-determinations.

A consumer advocacy group said they will work with the administration and Baker’s health and human services chief, Marylou Sudders, to monitor the impact of the budget cuts, “including ensuring that low-income residents who need to renew their MassHealth coverage maintain the benefits that are appropriate for them.”

“We are thankful that the [Executive Office of Health and Human Services] has maintained most of the MassHealth services that low-income families and individuals need to keep them healthy,” Amy Whitcomb Slemmer, executive director of Health Care for All, said in a statement. “However, we are concerned about the changes in eligibility standards for members seeking Personal Care Attendant (PCA) and adult foster care services. We will also pay close attention to the proposed changes to the MassHealth Limited program to determine any potential impact on access to necessary services.”

Baker in late January installed Daniel Tsai, a partner in McKinsey & Company’s health care systems and services practice, as assistant secretary of MassHealth, elevating the position from a directorship.

An independent Massachusetts Medicaid Policy Institute report, released in December 2014, called for an elevation of the job of director, and described a need to address the program’s purchasing approach, a more aggressive stance on behavioral health delivery and payment reform, a “looming crisis” of long-term care for seniors and people with disabilities, and investment in its information technology infrastructure for data analysis.

“Certainly some of that will be a part of this,” Baker told reporters when asked about the report on Thursday after his speech.

Asked by the News Service about Baker’s comments on the Connector, Gonzalez, who as Patrick’s budget chief chaired the Connector’s board, said he didn’t have “any inside information on that.”

Baker told the Greater Boston Chamber of Commerce his administration also plans to be “very aggressive” on transparency in the health care sector, with prices for the same services varying among providers despite similar outcomes.

“We have to fix this part,” Baker said. “And I think a big part of fixing this starts with shining a lot of light on the differentials that exist. Most people, I don’t think, have a sense of how significant and how important this piece of the equation is. We’re going to work real hard to make transparency across the health care system a very fundamental trademark of who we are and what we’re all about.”