[UPDATED] Covering All Legal Immigrants: Not $150 million this year, and not after next year, either

The state SJC just ordered the state to restore full Commonwealth Care coverage for legal immigrants. What’s it going to cost?

For lots of people, the $30 billion state budget is just lots of unimaginable big numbers. But for those those of us who pay attention to budget numbers, and understand the relative scope and costs of stuff, we want to correct a cost misconception that’s been floating around the press.

For example, the lede in today’s Globe story says this:

Massachusetts lawmakers must quickly come up with about $150 million to provide health insurance to tens of thousands of legal immigrants, after the state’s highest court ruled yesterday that they were illegally excluded from subsidized coverage available to other residents.

That’s not accurate.

The $150 million is the full cost for a full year. But if coverage is restored in February or March, the cost for the rest of this current fiscal year is much less, closer to $50 million. That’s a much easier lift. The state does supplemental budgets every winter, and often adds much more than $50 million. Finding $50 million is not a piece of cake, but hardly insurmountable. (for example, what is the state saving in unused snow and ice removal so far?)

Also, there are some countervailing savings, from the ending of the Bridge program. The net cost is less than the full $50 million.

For fiscal 2013, the state will need to allocate around $150 million more than it would have otherwise, due to the ruling. [Update: We had originally reported that the full year cost of around $150 million did not take into account the savings from ending the Bridge program, leading to a net cost of $125 million. We’ve since been told by Administration and Finance staffers that the $150 million estimate includes Bridge program savings, and that is the net additional cost. So we’ve corrected the post.]

(And you know what raises around $125 million? – equalizing the tax on “other tobacco products,” like little cigars and chewing tobacco so it matches the cigarette tax rate, and an increase in the cigarette tax to keep up with inflation. That would also improve health and lower overall health costs, too.)

But for fiscal 2014, the additional cost will only be half. That’s because in January 2014, the ACA provisions that provide federal coverage for all legal immigrants kick in. After 2014, all legal immigrants, including the “aliens with special status” covered by the court ruling, will be eligible for federal tax credits that will replace most of the cost of Commonwealth Care.

So the $150 million figure is only for one year. It’s not an ongoing cost. In fact, due to the ACA, the state will be relieved of hundreds of millions of dollars of costs that it took on as part of chapter 58. Yet another reason why we said for months that national health reform is good for Massachusetts.
-Brian Rosman

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