A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

Health Reform: How Much Does It Cost & How Is It Financed?

Health Reform: How Much Does It Cost & How Is It Financed?

April 9, 2006

Last Friday's Globe had a letter to the editor from BI/Deaconess' Dr. Richard Parker concluding: "... I am waiting for some straight talk on the numbers." Reasonable question -- wonder why the mainstream media has not added light to this. Healthy Blog puts out the numbers as we understand them (hope this prints out OK -- forgive the mess if it occurs):

Sources FY07 FY08 FY09
Federal Safey Net Revenue 605.0 610.5 610.5
Federal Medicaid Match 184.6 242.1 299.6
Hospital Assessment 160.0 160.0 160.0
Payor Assessment 160.0 160.0 160.0
Free Rider Surcharge 50.0 40.0 25.0
Fair Share Assessment 45.0 36.0 22.5
General Fund 125.0 125.0 125.0
Existing Obligations
MCO Supplemental Funding 287.0 180.0 160.0
Free Care Pool/Safety Net Fund 610.0 500.0 320.0
SubTotal 897.0 680.0 480.0
New Spending
Children to 300% 18.2 27.4 37.4
Restored MassHealth Benefits 48.0 53.0 58.0
Medicaid Rate Increase 90.0 180.0 270.0
Commonwealth Care Subsidies 160.0 400.0 725.0
Subtotal 336.2 660.0 1090.4
Total Spending 1,233.2 1,340.0 1,570.4
Three Year Balance +116.4 +33.2 -167.9

Major question from Dr. Parker -- how does the $295 employer assessment pay for this big health reform package. Answer -- it doesn't. It's a small part of a large package and the major source of money each year is federal.

Bigger question -- how does this hold up? Our sense -- passes the laugh test, plausible and tight. Likely to turn out as planned? Not likely -- prepare for surprises, pleasant and unpleasant. That's life in this territory. What's important now -- strong commitment by House and Senate leaders to make it work -- real political commitment to meet the promises outlined in the soon-to-be new law. Up to all of us to hold them to it.