Correction to the Media: $400 Million Isn’t The Number. It’s $156 Million.
How much more is health reform going to cost the state next year?
The answer is $156 million, not $400 million (details below). If you follow MA health reform, there are a lot of reasons you might think $400 million is the bad news number.
A glance at the Globe’s top story last Thursday might make you think it’s $400 million. The lead: “Spending on the state’s landmark health initiative would rise by more than $400 million next year, representing one of the largest increases in the $28.2 billion state budget…”
In Bob Kuttner’s Globe column Monday, the $400 million gets worse: “the Globe recently disclosed [that] the program’s costs are outstripping its projections by … $400 million next year.” Similarly, yesterday’s Wall Street Journal op-ed by Shikha Dalmia (no link), states that “The state health-care bill for fiscal 2008-2009 is expected to touch $400 million — 85% more than originally projected.” Today, CNN’s respected Dr. Sanjay Gupta reported that “While more people than ever are covered in Massachusetts, the cost overruns have been more than $400 million.”
So now, $400 million isn’t just the amount of spending growth, it’s being called all unanticipated growth and cost overruns. The story has falsely morphed to mean that health reform spending will be $400 million above projections — that state officials had predicted no growth next year. This in a program that is still ramping up enrollment and subject to medical inflation like everything else. Substantial spending growth has always been anticipated. It’s not all cost overruns.
$400 million isn’t even the relevant number.
Yes, health reform spending in the governor’s budget is projected to increase by $402 million next year. But Medicaid is a matching program – more spending means more federal help. The revenue expected for next year should go up by $246 million.
This leaves a much more manageable $156 million increase that must be filled from state resources.
So the “$400 million” isn’t all unanticipated and isn’t all coming from state taxpayers.
Once bad data gets out, it’s almost impossible to recall. The enemies of chapter 58 are all over this. A $400 million cost overrun has been reported in papers all over (like Utah), in Republican blogs, in influential California health news digests, press releases and more.
How do you get back all the feathers, once the pillow has been burst?
Brian Rosman
February 1st, 2008 at 9:11 pm
If you think feathers are blowing around now, then you ain’t seen nothin’ yet…
While you’re on the subject of numbers, will you please clarify how the total of 300,000 “newly enrolled” under the Ch 58 law is being calculated?
Specifically, what’s the breakdown of MCaid, Comm Care, Comm Choice enrollment?
We have an obligation to be thoroughly honest about the “MA plan” and what needs to be done to get it on track to actually achieve reform of the healthcare system (that means improving the system and the system is comprised of access to care, cost control, and quality improvement; these 3 elements function in an inseparable and interrelated manner). The nation is watching.
I want us all to work together toward these goals.
February 2nd, 2008 at 7:58 am
Brian Rosman,
I am a 57 year old homemaker and my husband is retired I cannot afford to buy insurance so I will be fined by DOR.I cannot afford to pay the fines.Will I be jailed for nonpayment of taxes??I should not have to worry about this at my age.I will go to jail because I am not wealthy?Please answer this question.
February 2nd, 2008 at 8:42 am
Spin, spin, spin.
That’s all you folks do. You are no different than the politicians that rammed this law down our throats.
Your saying that 156 million is better than 400 million because of the medicaid reimbursement is no different than saying that the affordable premium is 225 without including the 3K deductible and 20% coinsurance. The premium is really 500-600 per month not 225 before the benefits of insurance truly kick in.
The 256 million from Medicaid is still money that comes indirectly from us. No need to worry Massachusetts, the Feds will kick in $256 million because we can’t figure out to fund the program properly.
Maybe we’d have more funds to cover this if Coupe Deval didn’t back down on the 2008 penalties for not having insurance. We are losing an estimated $600 per person at a minimum who decides not to have insurance this year. That’s $30 million that we aren’t collecting if you figure that 50,000 people won’t buy insurance.
February 3rd, 2008 at 3:21 pm
MHIIAT @ 3:
“The 256 million from Medicaid is still money that comes indirectly from us.”
Your federal taxes should be the same or lower if your income is the same, because the Bush tax cuts passed in 2001 have been ratcheting the rates downwards in the 11 years since.
$156 million is the right number.
February 4th, 2008 at 11:18 am
Norma,
I recommend contacting Health Care for All’s Call HelpLine at 1-800-272-4232. A volunteer there will help find someone who can answer your questions.
February 4th, 2008 at 12:00 pm
No, $400 million is the correct number, unless, of course, you think money grows on trees. It might not immediately cost Massachusetts $400 million, but you can’t just ignore the entire amount because poor schmucks in other states get to foot the rest of the bill.
February 4th, 2008 at 5:02 pm
Joel,
Your remark about federal taxes may be the case for some taxpayers, but as the tax rates have gone down, most taxpayers’ incomes have increased, the net result being more total federal tax revenues. The federal tax dollars being used to subsidize our state’s health insurance program are still coming from taxpayers, even if it’s federal deficit spending which we pay for in the long run in the form of interest on debt. But that’s immaterial to the topic of what the universal health care program costs.
You seem to be confusing what any particular entity or group will pay toward the cost of a program with what the program itself actually costs. Yancey Ward is exactly right. It doesn’t matter which government entity’s treasury the money comes from; ultimately it all comes from us taxpayers.
The only important number here is WHAT IT COSTS. Massachusetts implemented a program we can’t afford to pay for with our own state tax monies, so they need to use some of our federal tax monies.
February 11th, 2008 at 10:33 pm
How do you afford health insurance if you have a weak salary? Say you’re making 25,000 a year and your employers don’t offer insurance. How in the name of Romney do you afford a couple hundred per month even if you don’t want insurance? How can Mass. FORCE health care down our throats and not feel an ounce of regret or shame? And we get PENALIZED for not being able to afford healthcare????? ZERO LOGIC. The poor get poorer in Massachusetts. The middle class is dead.
February 12th, 2008 at 12:01 am
To Jones:
if you make $25K and your employers does not offer insurance, you are elible for Commonwealth Care subsidized coverage which would cost you less than $100 per month for excellent coverage.