BOSTON (State House News Service) – Over the past decade, enrollment in government-funded health coverage under MassHealth has rocketed upwards, growing by 70 percent since 2007 when Gov. Deval Patrick took office and exerting increasing pressure on state finances as more full-time employees are finding their way onto government subsidized health plans.
After declining in his first year in office, MassHealth enrollment under Gov. Charlie Baker has cleared peak levels during Patrick’s final year and is approaching the 2 million mark.
The surge in enrollment in the state’s biggest and most costly program underscores the demand for health care coverage among disabled individuals and low-income children, families and adults and also reflects eligibility expansions authorized under the six-year-old federal Affordable Care Act (ACA).
But it is also putting pressure on the state’s $39.25 billion budget at a time when the country is bracing for changes in federal health care policy and coping with the uncertainty of when Congress may vote to repeal the ACA and what type of program, if any, they will substitute for it.
The Baker administration, according to officials, is preparing to deal with a $600 million increase in required spending on the MassHealth program in fiscal 2018 due to enrollment growth as the percentage of residents receiving MassHealth as their primary coverage has grown from 16 percent to 21 percent, or more than 523,000 enrollees, since 2011.
The administration attributes the surge in enrollment and costs to a shift away from commercial coverage offered through employers. The trend, according to officials, can be explained in part by expanded eligibility under the ACA and the absence of penalties on companies that don’t offer insurance – penalties that were authorized under the federal law, but have never fully taken effect.
The number of full-time employees not covered by employer-sponsored insurance grew by 15 percent, or 118,000 workers, between 2011 and 2015 from 740,000 to 859,000, according to the Executive Office of Health and Human Services. During that time, the number of full-time workers not offered coverage through their employer grew by 38,000, while 80,000 more workers declined their employer-sponsored coverage in favor of MassHealth costing the state $511.5 million in the fourth quarter of 2015.
The News Service inquired about enrollment in MassHealth after the Baker administration and Treasurer Deborah Goldberg, in financial disclosure statements, indicated in 2016 that the program, funded at $15.9 billion in this year’s budget, was on track to finish the fiscal year with a potential $100 million deficiency because enrollment has exceeded projections.
The Baker administration now estimates that deficiency at $46 million net of projected federal reimbursements.
Enrollment figures obtained by the News Service show caseloads fell sharply in fiscal 2016 before shooting up in fiscal 2017, the current fiscal year.
MassHealth enrollment dipped 2.3 percent to 1,863,215 from fiscal 2015 to fiscal 2016, before rising 3.4 percent to a projected 1,926,700 in fiscal 2017.
Major computer problems during the Patrick administration contributed to a surge in MassHealth enrollment before technical issues at the state Connector Authority were straightened out and enrollees were reevaluated to reassess eligibility.
Adding to the import of the recent caseload increase is uncertainty over the ACA, which President-elect Donald Trump and Republican leaders in Congress are targeting for repeal. ACA supporters say it has solidified expansions of health care coverage while critics say the law had driven untenable cost increases.
States generally receive 50 percent federal reimbursement for most MassHealth expenditures for adults, and 88 percent federal reimbursement on most expenditures for children’s benefits reimbursable under the Children’s Health Insurance Program (CHIP).
Under the ACA, MassHealth on Jan. 1, 2014 began receiving enhanced federal reimbursement for spending on newly eligible members and some existing members at levels of 80 percent in calendar year 2015 and 85 percent in calendar year 2016. According to state financial dislosure documents, the reimbursement rate for this population will increase each year through 2019, and will level off at 90 perent in 2020 and beyond.
The fate of those reimbursement rates, and other critical elements of the federal government’s health care partnership with states, is unknown at this point since the new Congress has just been seated and Trump will not be sworn in until Jan. 20.
At a press conference Wednesday, Trump tied his ACA plans to his nominee for federal health and human services secretary, U.S. Rep. Tom Price. “We’re going to be submitting as soon as our secretary is approved – almost simultaneously, shortly thereafter – a plan. It will be repeal and replace,” Trump said.
Baker has expressed confidence that a five-year Medicaid waiver deal his administration negotiated with the outgoing Obama administration will serve Massachusetts well and hold up even with the changing administrations.
State budget analysts see a need for more information about the MassHealth program.
In a report released Monday, the Massachusetts Budget and Policy Center said the Baker administration and the Legislature face a $615 million gap in the fiscal 2018 budget, citing the use of non-recurring revenues in this year’s budget, likely revenue increases, and projected spending increases of $835 million, including $339 million in new health care costs.
“Because of health care cost growth and increasing enrollment in MassHealth, healthcare spending in the state budget has grown faster than the rate of inflation and there is every reason to believe that trend will continue,” MassBudget wrote in a fiscal 2018 budget preview report on Monday. “It would allow for a more transparent and orderly budget process if the Administration were to publish a projection of costs for maintaining our current health care programs and policies after accounting for projected caseload and cost changes.”
A spokeswoman for the Executive Office for Health and Human Services, which oversees MassHealth, said program administrators do not file an annual report.