BOSTON (AP) - Republican Gov. Charlie Baker’s administration on Tuesday offered up a revamped proposal to overhaul the state’s Medicaid program, known as MassHealth.
In a letter to the Democratic heads of the powerful House and Senate Ways and Means committees, Massachusetts Secretary of Administration and Finance Kristen Lepore said the administration’s recent efforts to rein in health care spending have helped slow spending, but that more needs to be done.
The proposal would bar non-disabled adults with access to affordable health insurance plans offered by their employer from being eligible for MassHealth. That and other efforts to encourage individuals to take advantage of employer-offered insurance plans could save more than $76 million in the 2018 fiscal year that begins July 1.
The plan also would impose a five-year moratorium on new insurance mandates, make changes to the MassHealth pharmacy benefit to help lower drug prices and improve rebates, and make changes that would let the state take advantage of federal subsidies - including moving about 140,000 non-disabled adults with incomes over 100 percent of the federal poverty level from MassHealth to the state’s ConnectorCare program, which offers health plans with low monthly premiums and no deductibles.
All told, the changes could help save the state more than $202 million, according to the administration.
Another part of the plan would create a temporary employer contribution to help ease the cost of public coverage for workers. The plan calls for a two-tiered approach that builds off of the existing employer medical assistance contribution and would help bring in $200 million in new revenue during the 2018 fiscal year.
Many of the proposals in Baker’s plan would require changes in state law. Some would also require federal approval before they could take effect.
“Without this and additional action to manage spending growth, the cost of MassHealth will increase, crowding out other priorities,” Lepore wrote. “These steps are necessary to protect taxpayers while preserving the health care safety net for those who need it.”
Baker had earlier called for a $2,000-per-worker assessment on companies with 10 or more employees. That was met with resistance from business groups.
Spending on MassHealth, which covers 1.8 million state residents, accounts for nearly 40 percent of the annual state budget.
The proposed changes in the program come amid talks among Republicans in Congress to cut Medicaid funding and as Massachusetts continues to struggle to close a $400 million to $500 million budget gap and deal with lower-than-expected tax revenues.
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