As the debate over the funding of health reform reaches a critical juncture, several key points should guide the discussion:

- It is essential that state leaders and others get a better handle on the scale and nature of the “problem” that needs addressing. For example, what are the factors that are driving the larger than anticipated enrollment in Commonwealth Care? Is enrollment likely to peak in the next year or will it continue to grow indefinitely? National medical inflation is driving up health costs for everyone so we need to focus on the incremental increase in state spending beyond the norm.

- There is a danger that revenue raising proposals, unless carefully thought through, could undermine the longer term sustainability of health reform. One of the key underpinnings of health reform was to encourage individuals to accept employer coverage. This is working, according to a recent survey by the Massachusetts Association of Health Plans, which concluded that an additional 85,000 individuals enrolled in employer-sponsored coverage in 2007 at a time that employer coverage is dropping in most other states.

- The funding of health reform is part of a large fiscal challenge facing state leaders and should be addressed in that context.

The Governor’s proposed budget for fiscal 2009 already relies heavily on one-time or speculative revenues. The impact of the recession on tax revenues will only make the situation worse. The shortfall in funding for health reform is a small part of a much larger fiscal problem.

- Political support for health reform remains strong and a broad spectrum of stakeholders is committed to addressing the issues that have arisen. This spirit of cooperation is critical to the law’s success.

Michael J. Widmer
Massachusetts Taxpayers Foundation

This program aired on April 3, 2008. The audio for this program is not available.


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