SUCCESS OF HEALTH CARE REFORM HINGES ON COST CONTAINMENT by Richard Tisei

On April 17, the Senate unanimously approved a comprehensive cost containment bill designed to rein in the state’s spiraling health care costs.

The vote could not have come at a more crucial time for the Commonwealth, as several converging factors are threatening to undermine the state’s efforts to ensure that all Massachusetts residents have access to health insurance.

Consider the following:

• In the last two years, approximately 340,000 Massachusetts residents have secured health care coverage, a milestone state officials did not expect to reach until Year 5. Over 176,000 have signed up for Commonwealth Care, the state-subsidized program for low and moderate-income residents. Nearly 75 percent of these individuals make no monthly premium payments, so the state must pick up the costs.

• The state originally projected the cost of providing subsidized health insurance in Fiscal Year 2008 would be $618 million. Governor Patrick is now asking the Legislature to pass a supplemental budget to cover an estimated $153.1 million shortfall in the Commonwealth Care program.

• When the health care reform law went into effect in 2006, it was expected the state would be paying $750 million to support Commonwealth Care in Fiscal Year 2009. But when the Governor released his budget in January, he allocated $869 million for these costs. Now, the Administration is saying the true cost for next year will be “significantly” higher, topping $1 billion.

• The federal waiver the Commonwealth has been operating under for the past three years is due to expire this year. This waiver has provided Massachusetts with $385 million annually to help pay for its health care costs. If the waiver is not extended, the state will have to come up with that money instead.

Is it any wonder some people are starting to refer to health care reform as the next Big Dig?

So far, all the cost estimates surrounding health care reform have been way off. I’m beginning to wonder if anyone really knows what the ultimate price tag will be, but unless we get these costs under control, the law could end up bankrupting the state.

Negotiations between the state and federal government have been ongoing since December. Senator Richard Moore, who is participating in these discussions, says he is “cautiously optimistic” the waiver will be renewed, but the state will not know the final decision until sometime after the House and Senate budget debates have ended.

All of this is taking place against the backdrop of a national recession, which will further limit the state’s ability to cover unexpected cost increases.

The state has had great success in signing people up for health insurance coverage. However, the real measure of the success of Massachusetts’ health care experiment will be determined by how well we can control costs.

Senator Richard R. Tisei
Senate Minority Leader