Budget

Medicaid: Can't Get Enough of Your Love Money, Baby

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Someone at The Boston Globe is catching on.

Never enough!

The paper opens its latest piece on the Bay State's Medicaid woes with the line: "The money, it seems, is never enough." No kidding! It goes on to explain just how fiscally wrecked the state's Medicaid program is:

Governor Deval Patrick approved a record $9.6 billion last July for the state's health insurance program for the poor — sufficient, he assumed, to last a year. But the program's costs quickly outpaced expectations, forcing the governor to approve an additional $329 million in October and then seek $258 million more, which lawmakers approved last week.

And even that may not last, with six months remaining in the budget year.

The ballooning cost of Medicaid is one of the biggest challenges facing Massachusetts and other states, which have seen demand for the program jump during the recession as increasing numbers of unemployed residents enroll in the subsidized insurance plan.
With Massachusetts confronting an estimated $1.5 billion shortfall in the coming budget year, Patrick has said he is committed to financing the program, known as MassHealth. But he has acknowledged that it cannot continue to grow at this rate.

This isn't a new problem for the state, which has already killed a slew of benefits in hopes of keeping spending on the program down:

Massachusetts last summer slashed dental benefits for MassHealth recipients, forcing hundreds of thousands of poor, elderly, and disabled residents to visit community health centers, instead of their regular dentists, for fillings, root canals, dentures, and other routine procedures. Bigger cuts or restrictions loom.

Normally when Medicaid costs shoot up, states alter eligibility requirements to keep enrollment levels manageable. But part of the problem states like Massachusetts are having is that the PPACA's rules prohibit altering Medicaid's eligibility requirements in ways that make it more difficult to get into the program. So states are reacting to the wild cost increases they've seen over the last few years but cutting benefits instead. It hasn't solved the problem.

To make things worse there's a bigger fiscal roadblock on the horizon: Over the summer, the expanded Medicaid funding that started in the stimulus is scheduled to run out, leading to a funding "cliff" that will only make current fiscal troubles worse. As it is, states relying on that money are already in a grace period: The extra stimulus money was initially supposed to run out last summer, but after a lengthy struggle, Congress relented and extended the padded funding levels by a year. With Republicans running the House, it's not clear that states will win a similar battle this time around.

Yet despite the program's ongoing cost programs (not to mention its dubious record on health outcomes), Democrats in Congress chose to use it as the vehicle for half of the PPACA's health coverage expansion. Congress instructed the federal government to pay for the majority of that expansion, but by the end of the decade, some states will still be on the hook for billions in extra Medicaid costs.

The money, it seems, is never enough.