NCPA - National Center for Policy Analysis


November 20, 2007

Enrollment in the state's new subsidized health plan is growing so quickly that the state could face a funding gap as large as $147 million by the end of the fiscal year, according to a state projection.


  • Financial pressures will grow for fiscal 2009, which begins July 1, since insurers who participate in the subsidized program are expected to ask for significantly higher payments from the state.
  • Also driving up the cost was a decision to eliminate premiums for thousands more people than originally planned, in an effort to make insurance more affordable.
  • Additionally, there is uncertainty about how much the federal government will contribute toward the total cost.

As a result of the shortfall, the Legislature would likely need to appropriate more money in a supplemental budget or take funds set aside for hospitals that serve a large number of uninsured patients, a possibility that worries hospital officials.

"This is one of many warning signs, especially in tandem with the projected state budget deficit and the skyrocketing cost of healthcare in the state," said Alan Sager, professor of health policy and management at the Boston University School of Public Health.  "The (healthcare) law is very shaky on the revenue side."

Source: Alice Dembner, "Success could put health plan in the red," Boston Globe, November 18, 2007.

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