Massachusetts last week got the go-ahead from HHS to expand its Medicaid program to include about 80% of the population now uninsured.
The Medicaid expansion would replace an ambitious universal health insurance plan that was enacted in 1988 but never implemented because of growing objections to its burden on business.
Rather than force employers to provide insurance for their workers or pay into a state insurance pool, as the long-delayed law would mandate, Gov. William Weld wants to provide tax incentives to businesses that agree to pay at least 50% of a state-defined basic benefits package for their low-income workers. Weld's plan, called MassHealth, also would subsidize the employee share.
The HHS waiver of standard Medicaid eligibility and coverage guidelines will allow Massachusetts to enroll approximately 400,000 low-income employed and long-term unemployed residents. The Medicaid program already covers more than 600,000 in the state.
HHS said the changes will result in coverage for more low-income children and their families as well as low-income disabled residents, providing care before their medical conditions become critical.
But the money to offset the tax breaks and subsidies is supposed to come from a state uncompensated-care fund that now reimburses hospitals for providing care to the uninsured. Weld's program envisions using $230 million of the $330 million collected annually from a surcharge on hospital bills.
The Massachusetts Hospital Association said it's concerned that a depleted fund would lead to inadequate reimbursement for hospitals. In a statement, the MHA said, "The waiver would transfer significant resources from the pool into untested programs" that would take time to get established before they could reduce the ranks of the uninsured.
The Weld proposal will be taken up by a state legislative committee on healthcare reform.