Health Care
Health care programs, which were heavily hit by cuts in October, were not cut as significantly in the Governor’s latest round of funding reductions for FY 2009. The House 1 budget anticipates continued full funding of the state’s health reform law, and recognizes that it is possible that FY 2010 will see increased need for the state’s publicly-subsidized health care programs as the state’s struggling economy will likely lead to increasing unemployment and reductions in employer-sponsored health coverage. Even though there are likely to be administrative savings associated with proposed consolidations, there are still cuts in funding for health care services in the Governor’s budget proposal.
9C cuts:
- MassHealth (Medicaid) and Health Reform programs were heavily cut in October ($253.8 million); the Governor’s January cuts reduce funding for these programs by $8.0 million - $5.4 million of which is a reduction in the MassHealth Indemnity and Third Party Liability (fee-for-service) program.
- Public health programs are cut by $2.3 million, with $1.8 million in cuts targeting community-based public health programming, and $530,400 in cuts to public health hospitals. October 9C cuts to public health totaled $31.2 million. The public health budget has been cut by a total of 5.6 percent since the beginning of the fiscal year.
- The Governor’s 9C cuts reduce funding for mental health programs by $2.9 million. These cuts are in addition to the $33.5 million cut in October.
House 1:
- The Governor’s budget proposal continues full funding the state’s health reform law. Nevertheless, the Governor estimates net savings in MassHealth (Medicaid) programs of close to $187 million. These savings include limits in rate increases, expansions in pay-for-performance payment contingencies, expansions of care coordination and other utilization management and other savings. There is also a proposal to eliminate reimbursement for hospital-acquired infections.
- With a proposed elimination of an exemption of the sales tax on alcohol and sweetened beverages and candy, the Governor proposes the creation of a new Health and Wellness Fund in order to support certain consolidated initiatives. Nevertheless, the Governor’s budget does include reductions in public health funding. For example, smoking prevention, now a component of consolidated addiction and tobacco control services, was funded at $12.8 million in the FY 2009 GAA. House 1 includes $7.7 million for smoking prevention. Family health services, now part of a consolidated health promotion line item, received $7.6 million in the FY 2009 GAA, but receives only $2.4 million in the House 1 budget.
- As in his FY 2009 House 1 proposal, the Governor again recommends shifting more of the cost of state employees’ health insurance to those employees by basing their contributions on their salary levels rather than on their date of hire. Currently, state employees hired before June 30, 2003, contribute 15 percent of their health insurance premiums and employees hired after that date contribute 20 percent. Under the Governor’s FY 2010 proposal, state employees earning less than $35,000 would contribute 15 percent, those earning between $35,000 and $50,000 would contribute 20 percent, and those earning more than $50,000 would contribute 25 percent. Changing the contribution structure is expected to save approximately $60 million in FY 2010.
Staff
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