Studies Look At Massachusetts Impact of Policy Choices

Admittedly, “Studies Look At Massachusetts Impact of Policy Choices” could be an entrant in a boring headline contest. At HCFA, we don’t endorse candidates or take any partisan positions, but we do want our readers to understand the impacts of policy choices for Massachusetts health care. Hence this post.

Repealing ACA would Raise Medicare Costs

First, Community Catalyst Action Fund released a devastating new report (pdf) this week, looking at the impact of repealing the Affordable Care Act on Massachusetts seniors and people with disabilities receiving Medicare. The Affordable Care Act (ACA) lowers costs paid by Medicare beneficiaries by cutting excess spending such as overpayments to private insurance companies, by providing no-cost preventive care, and by helping seniors cover their prescription drug costs.

If the ACA is repealed, Bay State seniors will pay hundreds of dollars more in premiums and cost-sharing each year, largely to restore unnecessary payments to health insurance companies and to hospitals and other providers. They once again will be required to pay cost-sharing for important preventive services. These changes would cost the average Massachusetts Medicare beneficiary nearly $5,000 over the next decade.

Tens of thousands of Massachusetts seniors with high prescription drug use would pay even more after repeal. Because they no longer will be protected against the donut hole coverage gap, repeal would cost them nearly $17,000 over the next decade, or $1,700 each year.

The report provides details on where the savings come from. Seniors and other Medicare recipients pay premiums based on the overall cost of the program, as well as deductibles and coinsurance. By reducing overpayments to insurers, cutting payments to some providers and incentivizing higher quality care, the ACA creates direct savings for seniors. This will save seniors hundreds of dollars per year. People will also save by closing the infamous prescription drug benefit “donut hole.” Already, more than 60,000 Massachusetts Medicare beneficiaries with high prescription drug use are saving on their drug costs. For those hitting the donut hole, these savings will average $1,700 per year over the next 10 years.

In addition to raising their costs, repeal of the ACA would take away expanded benefits added to Medicare by the law, including free preventive care services. These changes mean seniors can now get many important preventive services, such as screenings for diabetes, high cholesterol, and cancer, as well as vaccinations, at no cost. These changes do more than save money, they will save lives.

Second, a study (pdf) released this week by the authoritative Kaiser Commission on Medicaid and the Uninsured looks at the impact on Medicaid of the House Republican budget plan, which resembles former Governor Romney’s campaign plan. The study includes state-by-state data, which lets us zoom in on the impact in Massachusetts.

House budget plan would require large Medicaid cuts

Overall, the House budget (which includes a repeal of the ACA and converts Medicaid to a fixed block grant) would require deep cuts in federal Medicaid spending, as shown in the graph above. This gets translated into a combination of large cuts in enrollment, increases in state spending, or cuts to provider rates.

For Massachusetts, the study estimates that the Commonwealth would lose $32.7 billion in federal revenue from 2013 to 2022, a staggering 30% cut. The impact would be massive. Even if Massachusetts were to make unprecedented efforts to control spending growth – greater efficiency than ever achieved – this cut would result in 435,000 people losing coverage. Many of those losing coverage would be likely be children.

To avoid those cuts, the state would have to spend an extra $5.4 billion in 2022. Or, it make deep cuts to payments to hospitals and nursing homes, totaling $11.2 and $7.7 billion, respectively, over the 10-year period.

The study ends with a grim conclusion:

Medicaid currently plays a significant role in providing care to many low-income individuals including children, the elderly and individuals with disabilities, financing long-term care services and supporting safety net providers. The House Budget Plan represents a fundamental change in the structure and
financing of the Medicaid program from a program with an entitlement to coverage for individuals and a guarantee to states for federal matching dollars without a pre-set limit to a block grant. In addition, under current law, the program is set to be the foundation of coverage for low-income individuals under the ACA which would be repealed under the plan. The proposed changes and reductions in federal financing for Medicaid under the House Budget Plan would almost certainly worsen the problem of the uninsured and strain the nation’s safety net. Medicaid’s ability to continue these many roles in the health care system would be significantly compromised under this proposal, with no obvious alternative to take its place.

Caveat Suffragator.

 -Brian Rosman

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2 Responses to Studies Look At Massachusetts Impact of Policy Choices

  1. This is a very significant study. It’s strange that it isn’t really being discussed much.

  2. Paul says:

    Paul Ryan’s plan would decrease medicaid budget by 30% or thereabouts. I would recommend NOT voting for Romney-Ryan.

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