Massachusetts Officials Seeking To Reduce Cost of Health Insurance Law

Massachusetts officials are seeking ways to address the increasing costs of the state's health insurance law as "the state faces a recession and pivotal funding decisions that could make or break health reform," the Boston Globe reports. The state faces a $1.3 billion budget shortfall, with the health insurance initiative facing about a $100 million shortfall.

According to the Globe, lawmakers could address the $100 million gap "quickly if the state approves an increase in the cigarette tax" and uses the money for health care, as proposed by state House Speaker Salvatore DiMasi (D). A $1-per-pack increase in the cigarette tax could generate $152 million a year. A "larger issue" will be securing a new three-year commitment from the federal government, which provides about half of the funds for the state's subsidized insurance program Commonwealth Care, the Globe reports. Massachusetts is seeking $1.5 billion over three years in federal matching funds, but the "Bush administration has been cutting back federal payments to the states," according to the Globe.

Even if the state can obtain enough funding from the tax increase and federal government, the law's "future rests on slowing the growth of health care costs in general, a task many analysts say is far more challenging than shaping the complex health reform law in the first place," the Globe reports.

Leslie Kirwan, the state's top budget official, last week said the financial situation might require additional contributions from a coalition of insurers, businesses, hospitals and consumer advocates that worked to pass the law. She added that the state also might have to revisit "some of the original assumptions of health care reform." State Senate President Therese Murray (D) also suggested that the state review provisions of the law as part of a "look at everything," but DiMasi said he believed it was too soon to revise the law. Meanwhile, advocates are calling on Gov. Deval Patrick's (D) administration to require additional contributions from businesses.

A council established by the health insurance law has developed proposals to reduce spending growth, and lawmakers are considering several bills, but the "task is daunting," the Globe reports. Commonwealth Health Insurance Connector Director Jon Kingsdale said, "If we don't grapple seriously with the cost of health care, the support for reform will erode and the perception will become broader that it is unaffordable" (Dembner, Boston Globe, 3/26).