Massachusetts Gov. Charlie Baker intends to offer a plan later this month to control the costs associated with enrollment in MassHealth, the state’s Medicaid program, according to the State House News Service.
Baker wants to fine companies that don’t offer their employees a health plan $2,000 for each full-time worker, as well as cap the rates that providers charge for healthcare services.
Due to the popularity of MassHealth, the state’s finances will not be able to keep up with healthcare costs unless big charges are made.
Massachusetts is experiencing the phenomenon of employed, low-income individuals choosing subsidized health plans even when their employers offer health insurance. It’s a problem that wasn’t supposed to happen. Before the Accountable Care Act (ACA) took effect, state residents whose employers offered health coverage were ineligible for MassHealth. To comply with the ACA, the state had to remove that restriction. At the same time, employers face no penalties for failing to offer medical plans to their workforce.
Should the Affordable Care Act—or key elements of it, such as subsidies—survive, healthcare at the national level may face similar problems. At a time when consumers are increasingly urged to price-shop for their healthcare, it’s inevitable that some will choose the option with the least costs, either overall or out of pocket. For low-income families, that option is likely to be a government-subsidized plan.
Meanwhile, the cost of care has continued to escalate in Massachusetts. The situation is exacerbated by provider price variations that are among the worst in the country. The governor’s plan to cap rates is, unsurprisingly, not supported by the medical community in Massachusetts. Rate control in the form of hospital rate regulation was enacted in Maryland enacted back in 1971, but it had the support of hospitals. Today, Maryland is the only state that has this type of system, but perhaps not for long.