A Healthy Blog

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

What's Wrong With This Definition?

What's Wrong With This Definition?

February 27, 2015

In the Globe's Capital section today, political reporter Joshua Miller provides a helpful lexicon of state budget terms, correctly titled, "Know the lingo and you can follow the budget process."

The term "MassHealth" is defined as: 

"If there is a tough beast to tame in the budget, it’s the cost of MassHealth, what the state calls its Medicaid program. Massachusetts spending on Medicaid, the state-federal health program for poor and disabled people, has grown at a much faster rate than tax money has in recent years. And it takes up a huge chunk of the budget, squeezing out other items. One-third of state spending in fiscal 2014 was on Medicaid, according to the Massachusetts Taxpayers Foundation. The state’s bungled rollout of its health insurance website added to the program’s fiscal troubles — though it’s not the state’s only health-spending challenge.

We know there's not a lot of space in the paper, but defining MassHealth simply as an expensive program, even in a budget glossary, misses a lot. We would add a bit to the definition.

First, from a purely fiscal point of view, MassHealth is both an expense to state taxpayers, and the state's largest federal revenue generator. For every dollar we spend, we get fifty cents or more back from the federal government. This is new money brought into the state that is spent in the local economy, generating economic value. The system is described well in a brief from last November from the Mass Budget and Policy Center and the Mass Medicaid Policy Institute (MMPI), appropriately titled, Understanding the Actual Cost of MassHealth to the State:

However, since MassHealth is jointly funded by the state and federal governments, much of this health care coverage is actually paid forby the federal government. Therefore, the “net” state cost of MassHealth (determined by subtracting the federal reimbursement and similar revenues from the budgeted total) gives a much clearer picture of the impact of MassHealth on the state budget than state budget totals alone.

Much of our MassHealth spending is matched dollar for dollar by the federal government. But in some case, like for many children, the feds pay 65% of the state's cost. And for the new people added to MassHealth due to the ACA, the reimbursement is 80%, or sometimes fully federally funded. And in addition to the federal revenues, there are rebates from drug manufacturers, and premiums paid by some members that go into the state's pot. Thus the actual true net cost of MassHealth turns out to be many millions less than it seems, around $6.1 billion, and not the $14.7 billion commonly cited in the budget.

Second, this budget focus misses the role MassHealth plays in keeping our state healthy and productive. MMPI created this infographic last December, highlighting MassHealth's broader role in both health care and the state generally. Here's the second page of the two-pager:

MassHealth Matters for Massachusetts

And finally, defining MassHealth just as a budget issue ignores the reason we have state government - to serve the people of Massachusetts. Any definition of MassHealth has to include the people in this video, also from MMPI:

      - Brian Rosman