NCPA - National Center for Policy Analysis


June 25, 2009

Massachusetts' trailblazing health care program made its first cuts early this week, 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 in enrollment by the recently unemployed, says the Boston Globe.

According to the plan laid out by the Connector Authority:

  • Most of the funding cuts will result from suspending a program that automatically assigned health plans to about 18,000 low-income residents who qualify for the full subsidy but fail to designate a health plan;
  • Spending will be reduced by $32 million by slowing payments to managed care companies participating in Commonwealth Care; and
  • Dental coverage will be cut for the 92,000 lowest-income residents enrolled in Commonwealth Care to save $10 million.

According to Leslie Kirwan, chairwoman of the Connector Authority board and Patrick's secretary of administration and finance, the $115 million in cuts the Connector Authority board approved 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.

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.

Source: Kay Lazar, "State cuts its health coverage by $115m; Board to slow enrollment in Commonwealth Care," Boston Globe, June 24, 2009.

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