Baker seeks input on MassHealth reform

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BOSTON — Eleven years ago, Massachusetts established a novel structure for encouraging people to buy health insurance and nudging businesses into offering it — a system used as a thumbnail sketch for Obamacare.

Now, with federal courts whittling into Obamacare, Congress trying to repeal the law, and the president predicting its impending doom, the Baker administration is seeking new means to stabilize the health markets and maintain insurance coverage for residents.

To implement his preferred reforms, Gov. Charlie Baker will need approval from state lawmakers, who okayed new business fees to help pay for Medicaid and have pledged to work on MassHealth reforms. Many of the governor's reforms would also need sign-off from the Trump administration, which inherited a Medicaid waiver deal Baker negotiated in the waning months of the Obama administration. President Donald Trump signed an executive order to give states more leeway on the law.

According to the Office of Health and Human Services, it is "critical" that state lawmakers and the federal government approve changes before the end of 2017 so they can be implemented in January, and the administration is not waiting for the state debate to play out to start the federal approval process.

At a hearing Friday morning on the top floor of the McCormack Building, advocates for expanded health care access expressed concern with Baker's plans to shift people off of Medicaid to subsidized commercial plans, while the business community endorsed changes to bring the system rating factors insurers use back under state control.

The Baker administration plans to move 40,000 childless adults and 100,000 parents and caretakers off of MassHealth, the state's Medicaid program, and into subsidized ConnectorCare plans, a policy that officials said would maximize federal subsidies and requires federal approval.

"This plan has been championed as saving the MassHealth program millions while taking coverage away from no one," said Michelle Virshup, staff attorney at the Health Law Advocates. She said the imposition of new copays, even at limited cost, and "administrative barriers" can wall off access to therapies even if people are still technically covered. Virshup said, "Coverage without access is tantamount to no coverage at all."

The administration also has a plan to address the potential elimination of federal subsidies used to lowerout-of-pocket health costs of qualifying individuals. The subsidies, known as cost-sharing reductions or CSRs, were challenged in a lawsuit brought by the U.S. House against the Obama administration. Though the ruling has yet to take effect and could be overturned, a federal judge sided with the legislative branch that the payments were not properly appropriated.

The elimination of CSR funding would result in hundreds of thousands of Bay State residents facing "unexpected rate increases," the Baker administration wrote in an overview of its plan, predicting that low-income residents in rural areas could lose coverage. Massachusetts insurance carriers expect to receive $132 million in CSRs in 2018, according to the Baker administration, which said uncertainty around CSR funding presents an "untenable risk" to the state's insurance market.

"Our most immediate concern and one that you are well aware of is the continuation of cost share reduction payments," Elizabeth Murphy, director of regulatory affairs for the Massachusetts Association of Health Plans, said at Friday's hearing. "The loss of these federal subsidies to assist low-income individuals in our marketplace would substantially erode our coverage gains here in Massachusetts. Neither Congress nor the Trump administration has made a commitment to continue this funding, and it's unclear whether the payments will be forthcoming."

The Baker administration has proposed establishing a premium stabilization fund in place of the CSR system, with plans to use the fund to "stabilize premiums via direct issuer reimbursement, an approach that would eliminate any consumer-facing changes to coverage costs or benefits."

Friday's hearing was convened by the Office of Health and Human Services, and another listening session is planned at the Chicopee Knights of Columbus on Aug. 16.

While Trump predicts that Obamacare will "implode," Massachusetts faces pressures on state finances that stem, in part, from the expansion of Medicaid under the Affordable Care Act.

Amanda Cassel Kraft, the chief of staff of MassHealth, said that the agency's spending has doubled and enrollment increased 70 percent over the past decade, so that 21 percent of the state's population now receives its primary coverage from Medicaid. The annual cost of the program now stands at $15.6 billion.

One proposed cost control Kraft highlighted in a presentation at Friday's hearing was selecting a specialty pharmacy network for MassHealth to save money on medications.

Neetu Singh, a dentist and oral health project manager for Health Care For All, said she is concerned that under Baker's proposal people will lose dental benefits and thereby lose access to oral health care. Singh said most of the people losing dental coverage will be unable to afford standalone plans and will "likely forego treatment."

The administration has said that people moved off MassHealth and onto commericial plans through the Connector will be able to purchase dental coverage for $29 a month, or get free dental care through community health centers paid for by the state through the health safety net fund.

Jon Hurst, president of the Retailers Association of Massachusetts, and National Federation of Independent Business Massachusetts State Director Chris Carlozzi both agreed with the Baker administration's request that carriers in the merged small business and individual market be allowed to continue using rating factors that are scheduled to be phased out.

According to Carlozzi, the state-based rating factors that are scheduled to be phased out allow insurers to consider the type of industry as well as the number of people insured in one pool. Carlozzi said that if the ratings factors were eliminated, as scheduled, there would be a disincentive for businesses to grow, and Hurst said maintaining the state ratings factors allows for more fair pricing of plans.

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