News & Events

State cuts its health coverage by $115m (DS)

Board to slow enrollment in Commonwealth Care
By Kay Lazar, Globe Staff  |  June 24, 2009

Overseers of Massachusetts’ trailblazing healthcare program made their first cuts yesterday, trimming $115 million, or 12 percent, from Commonwealth Care, which subsidizes premiums for needy residents and is the centerpiece of the 2006 law.

The board of the Connector Authority made the cuts as officials confronted two side effects of the recession: the state budget crisis and a surge inenrollment by the recently unemployed.

The largest share of the savings will come from slowing enrollment. An estimated 18,000 poor residents who qualify for full subsidies, but who forget to designate a health plan, will no longer be automatically assigned a plan and enrolled and thus could face delays in getting care.

The board also eliminated dental coverage for the poorest residents enrolled in Commonwealth Care, roughly 92,000 people who currently are the only ones in the program who receive that care.

egulators said that would save $10 million. Dental coverage was retained in the budget approved by lawmakers last week, and now it falls to the governor to decide its fate.

Also hanging in the balance is the health insurance status of 28,000 legal immigrants whose Commonwealth Care coverage was dropped in the budget lawmakers approved for the fiscal year that begins July 1. Governor Deval Patrick has until Monday to decide whether to veto any of that budget, which set aside $116 million less for Commonwealth Care than he proposed.

"No decision has been made" on restoring immigrant coverage, said Leslie Kirwan, chairwoman of the Connector Authority board and Patrick’s secretary of administration and finance. "It’s certainly going to be at the top of our list" of items the governor is considering adding back to the budget, she said.

But Kirwan said the $115 million in cuts the Connector Authority board approved yesterday were merely to deal with shrinking state revenues and the rapid growth in enrollment in Commonwealth Care, which has 177,000 members and was projected to grow to 212,000 in the next year.

These cuts do not provide any wiggle room for adding back the 28,000 immigrants who are facing elimination. If the governor decides to restore coverage for the immigrants,Kirwan said, he would have to find other areas to cut in the already razor-thin budget.

Patrick Holland, the Connector Authority’s chief financial officer, said enrollment spiked during the last three months, from 165,000 to nearly 177,000 members, because so many workers are losing their jobs and, with that, employer-provided health insurance.

The progress of the Massachusetts healthcare initiative is being closely watched in Washington, where Congress is crafting national legislation to extend coverage to more Americans. The Massachusetts law, cited as one model in the national debate, requires nearly everyone to have health insurance or pay a tax penalty.

The residents affected by yesterday’s cuts earn too little to be subject to the penalty. They also would be eligible for free emergency care for three months under the state’s Health Safety Net.

Leaders of Health Care for All, one of the state’s largest consumer groups, said the changes will be especially hard on residents whose first language is not English and who have difficulty understanding the complex enrollment paperwork.

But the group said state officials appear to have made the best of a bad situation. "There’s no other place to go for money," said Lindsey Tucker, the organization’s healthcare reform manager. ". . . My concern is people will not get the care that they need."

While the group’s leaders are resigned to that cut, they said they will continue to lobby the governor to restore coverage for legal immigrants. Lawmakers said they cut this class of legal immigrants because they do not qualify for matching federal subsidies. Thus, they are more expensive for the state to insure. The move has enraged advocates for the immigrant community.

Much of the rest of the $115 million in savings, $32 million, comes from slowing payments to the managed-care health insurance companies that won bids to offer insurance through the Commonwealth Care program. Regulators said that by slowing enrollment growth, the companies would receive less money than they had banked on when they submitted their bids earlier this year.

Kirwan stressed that when the economy improves, the changes made by the authority can be revisited. She also said the changes still protect the basic eligibility rules for the program and benefits that members receive, but put the brakes only on enrollment growth during an "unprecedented time."

While the emergency changes approved by the Connector Authority go into effect July 1, Kirwan said the board will schedule a hearing, probably in late July, to seek public comments on the issues. Kay Lazar can be reached at