Fed Rule Might Keep MassHealth Rolls Inflated
HHS: MassHealth Caseload Has Grown by 167,000
10/6/20 5:23 PM
OCT. 6, 2020.....When Gov. Charlie Baker first entered office more than five years ago, he faced what he saw as a challenging budget landscape with spending outpacing tax collections by $1.8 billion and the state reliant on one-time funding sources to balance it off.
So in his first budget, he proposed a solution that included wringing $750 million in savings from the state's Medicaid program, known as MassHealth, which covers predominantly low-income residents and families.
He did that, in large part, by undertaking a process that hadn't been done in years to comb through the rolls of MassHealth membership and find people who were no longer eligible and costing the state money. When the process was over, Baker had trimmed enrollment by roughly 250,000 and saved the state hundreds of millions of dollars.
But with Massachusetts once again teetering on the edge of a potential budget crisis, MassHealth and its roughly $17 billion budget will be a harder well to tap for savings in fiscal 2021 if the state, as projected by some, confronts a gap of up to $5 billion in lost revenues from the COVID-19 pandemic.
The Families First Coronavirus Response Act passed by Congress in March at the start of the pandemic included a "maintenance of effort" provision, or MOE, that prohibited states that elected to accept enhanced federal Medicaid payments of 6.2 percent for certain populations from removing anyone from their health insurance rolls.
The MOE is scheduled to remain in place for as long as there is a declared federal health emergency, which the Trump administration extended last week until at least Jan. 22, 2021.
While some in Congress are starting to call for the provision to be revisited, the Baker administration said it will "continue to provide comprehensive coverage to its members who remain eligible ... through these provisions while in place."
A group of Republican senators, led by Utah Sen. Mike Lee, wrote to President Trump in July bringing the issue to his attention.
"This provision gravely threatens the integrity of state budgets and threatens the very purpose of the Medicaid program: to serve the truly needy," the senators wrote, describing the MOE as "state budget handcuffs" that threatened to divert state resources away from people Medicaid was designed to serve.
Republican Kevin O'Connor, a Dover resident and attorney challenging U.S. Sen. Ed Markey this November, said he would support doing away with the MOE.
"Massachusetts and all other states should have the flexibility to remove people from [Medicaid] who are ineligible or have gained access to the program through fraud," O'Connor said in a statement. "The Governor and his administration have done a good job of managing our MassHealth benefits and eligibility and they should be entrusted to continue doing so."
Markey's office said the senator supports preserving the maintenance of effort provision to keep people on Medicaid during the pandemic, as well as an expansion of federal Medicaid funding to cover a greater share of the programs operated by states.
Gov. Baker had credited the enhanced MassHealth reimbursements for helping the state "mitigate the budget impacts of a difficult spring," but it also means that as enrollment in MassHealth has swelled the state is unable to remove anyone who might have found a job or returned to work after being furloughed.
The Center for Health Information and Analysis reported last month that MassHealth enrollment was up to 1.87 million people depending on Medicaid for primary or partial insurance coverage. The only way to remove someone ineligible for the program is if they move out of state, or if they voluntarily unenroll.
"Then this becomes a serious issue, I think, in which you can't disenroll people, even if they're no longer eligible, especially if they're getting put into managed care and the state is paying regardless of that person utilizing care," said Josh Archambault, senior fellow on health care policy at the Pioneer Institute.
Archambault said there are many reasons someone could have enrolled in MassHealth during the pandemic and later become ineligible, including a return to work or the restoration of reduced hours as the economy reopened. He said it's "very rare" for people to voluntarily unenroll.
Archambault said he's worried that there is no political will at the moment to take on an issue that requires advocating for taking people off public health insurance in the middle of a pandemic, but he said it should not be a "red-state, blue-state dynamic."
"You're starting to see more people get concerned with the MOE," Archambault said. "We're flagging it because now's the time to change it so all of the states don't find themselves in tough spots in a year or two, and it's fixable. It's a bipartisan thing."
Baker reported in a recent filing letter that accompanied a budget bill to close out fiscal year 2020 that MassHealth spending for the year exceeded budgeted expectations by $422 million.
The Executive Office of Health and Human Services subsequently told the News Service that gross spending at MassHealth increased from $16.5 billion in fiscal 2019 to about $17 billion in fiscal 2020, including federal reimbursements.
While the department reported an overall 15 percent decrease in health care utilization between January and July due to the pandemic, MassHealth also saw its caseload grow by 167,000 since March, EOHHS officials said.
The Center for Health Information and Analysis previously reported that enrollment in MassHealth as primary coverage was up 5.4 percent since March, or 63,000 people.
The Baker administration also said MassHealth has made about $1 billion in provider stabilization payments over the course of the the pandemic, including $700 million that was budgeted against fiscal 2020.
That money was used to support nursing homes, hospitals, community health centers, behavioral health providers and long-term care services.
Economists are preparing to testify on Wednesday before the administration and legislative leaders about their projections for tax collections over the remaining nine months of the fiscal year, which should give a clearer picture of how big the budget problem will be.
Through the first three months of the fiscal year, collections are actually up about 1 percent, or $69 million, from last year, but legislative leaders have still been predicting that they could be facing a $5 billion hole over the course of the full year.
Senate President Karen Spilka has said she'd like to have a state budget completed for fiscal 2021 by the end of this calendar year, and Gov. Baker is thought by some legislators to be preparing to file updated spending guidance, if not a completely new budget proposal, for lawmakers as soon as this month.
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