Massachusetts Health Insurance Plan Gets Its Own Federal Bailout

The news is buzzing about the latest bailout – not the controversial measure in Congress to buy bad mortgages, but the gift of more taxpayer money to the state of Massachusetts for health care.

The Boston Globe called it “a federal promise of $10.6 billion over the next three years,” and The New York Times explained that “The agreement will allow the state to spend up to $21.2 billion on the program over the next three years, an increase of $4.3 billion over the initial three-year period.”

Massachusetts has been called an “experiment” in universal health care, mandating health insurance coverage with the threat of fines for those who don’t purchase it. Along with the mandate, the state has provided subsidies for many populations.

Massachusetts has taken some of its Medicaid funds to help subsidize this universal coverage. As the Times reported September 30, “The original waiver, granted when Massachusetts enacted its plan in 2006, allowed the state to take federal money intended to compensate hospitals for charity care and use it to subsidize coverage for low-income uninsured residents.”

But was that enough? No. The state increased taxes.

“The plan’s rapid growth has generated fiscal pressures,” wrote the Times’s Kevin Sack. “The legislature and [Gov. Deval] Patrick filled a health care spending gap that approached $200 million for this fiscal year by increasing the tobacco tax by $1 a pack, levying one-time assessments on insurers and hospitals, and raising more money from businesses that do not contribute to their employees’ insurance.”

Already a “fundraising” target for the tax hikes, businesses have grown tired of this strategy, the Globe’s Kay Lazar wrote. 

“At the time, the Patrick administration also said it would require employers to pay more toward their workers' coverage under complex new rules that were to start [October 1]. But yesterday the administration, facing an uproar from businesses, said it would delay the rules until Jan. 1 and exempt many small companies from the proposed changes. Several business leaders had warned that the rules would force many companies, already reeling from the soured economy, to drop health coverage all together.” 

The Globe recently reported wait times for primary care in Massachusetts stretching to 100 days. As the country focuses on the banking crisis, taxpayer -- and voters -- must not let this additional bailout or the Massachusetts health care record go unnoticed.