MassHealth driving increased health spending, says HPC
Courtesy of the Health Policy Commission
The Health Policy Commission was meeting Wednesday to discuss health care costs.
A 2014 excess in healthcare spending was driven largely by the state’s ballooning MassHealth program, rather than commercial insurance payers, according to a presentation of the state’s Health Policy Commission (HPC) taking place in Boston today.
MassHealth, the Bay State’s Medicaid insurance program, accounted for two-thirds of total health care spending increases from 2013 to 2014, when healthcare spending per resident grew 4.8% to $8,010 annually.
The HPC’s 2015 Annual Cost Trends Report attributed 13-percent MassHealth spending growth to universal health insurance coverage implemented last year under the federal Affordable Care Act. That universal coverage boosted enrollment, as well as a temporary health insurance program set up through the state Health Connector in 2014 for applicants who were unable to enroll due to the state’s faulty health insurance exchange website; the Executive Office of Health and Human Services estimated the cost of that program to be $658 million.
Meanwhile, spending growth among commercial health plans increased 2.5 percent in 2014, which is below the benchmark set by the state’s healthcare cost containment law passed in 2012, Chapter 224. The law capped spending growth at 3.6 percent in 2014; a spending increase above that mark indicates the industry fell short of meeting the benchmark. The Health Policy Commission was formed under Chapter 224 to oversee the implementation of the law.
The HPC also found that MassHealth and other government-based healthcare spending programs crowd out other government spending areas, including mental and public health; education; human services; infrastructure and economic development; public safety and local aid to cities and towns. By 2016, the HPC predicts MassHealth spending will have increased 58 percent over 2006 levels, while spending in other areas is expected to decline, remain flat or increase only slightly.
Results for 2014 were analyzed during a meeting of the Health Policy Commission Board of Directors. In addition to cost trends and market performance, Wednesday agenda included reviews of healthcare quality and patient protection; transformation of the delivery and payment system and updates on the agency’s Community Health Care Investment and Consumer Involvement, or CHART program, which provides grants to community hospitals statewide to enhance healthcare delivery.
In a statement on the results, Stuart Altman, chairman of the HPC Board of Directors, said the 2015 Cost Trends Report highlights areas for optimism as well as concern.
“While spending growth has been moderate, there are signs that in the future, we could see growth that could exceed the benchmark unless the healthcare system continues to be conscious about its spending,” Altman said.
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