This week, both the House and Senate voted down Governor Baker’s MassHealth reform package. Baker included these reforms for a second time in an amendment to the budget he received from the legislature, giving them a second chance to take control of the state’s out of control spending. The breakdown of the votes were 41-116 in the House and 6-31 in the Senate. Both chambers did, however include an increase in the EMAC (Employer Medical Assistance Contribution) rate on employers as well as a slow in the increase of the Unemployment Insurance rate for a two-year period, which will partially further burden businesses without fixing the problem.
Currently MassHealth spending makes up just under 42% of the state budget. MassHealth enrollment and spending has almost doubled in the last 10 years with just under two million people enrolled today. This rate of growth is unsustainable, and Governor Baker’s reform package took steps in the right direction.
This year has been tough on the taxpayer, given January's enormous 40 percent legislative pay grab, out-of-control MassHealth spending, and the back-room deal making that makes it all possible.
MassHealth has grown exponentially in recent years and now makes up over 40% of the entire state budget. Baker is trying to fix it, just like he did when he vetoed the pay raises and the 40B dollar budget.
Baker proposed a common sense reform package to restructure MassHealth for non-disabled adults. He’s moving 140,000 people with income above the federal poverty level off of MassHealth. The Governor is also requesting a pass from the federal government’s harmful Obamacare laws to prohibit MassHealth eligibility for those who are offered employer based healthcare.
Even with Baker’s fiscal responsibility and lawmakers in the legislature who have high MassFiscal scores, Massachusetts still ranks nearly dead last for fiscal health at #48 and has the highest debt per capita in the nation. Tack on Prop. 80, which is a 80 percent tax increase, and we’ll soon look worse than even New Jersey.
Remember legislative leaders passed a secretive $40B conference committee budget in less than one day? MassFiscal would like to give a big THANK YOU to Governor Baker for spending thoughtful time to cut the pork from their secretive scheme. Yesterday, the Governor released his budget with over 171 line item vetoes and a $320M reduction in spending. The budget is now $39.4B.
But then again, why should taxpayers be surprised. Lawmakers count on Baker to make the tough cuts. That’s probably another reason why Baker’s poll numbers are so high, he’s fiscally responsible and isn’t afraid to use his veto pen.
Baker has used the budget to show lawmakers how to decrease spending. Last year, he issued over 300 vetoes, resulting in $256M in cuts. However, the big government lawmakers, the same folks who voted for their own 40 percent pay raise in January and for Prop 80, an 80 percent tax increase, also voted to override Baker’s vetoes. They overrode and restored $231M of the $256M Baker cut. If that’s not fiscal insanity, what is.
For this year’s budget, the core of Baker’s changes were on health care related costs. In the past six years, MassHealth enrollment has increased from 1.3M to 1.9M, yet spending on the program doubled from $8.7B to $16.5B. MassHealth currently accounts for over 40% of the state’s budget.
Baker offered the conference committee a package of reforms to MassHealth in order to address the out of control spending, but they only included an increased fee on businesses and left the real reforms out. Among his amendments released yesterday, Baker insisted on including a package of reforms to MassHealth and refused a stand-alone fee increase on businesses, saying in his statement, “Absent other reforms, this proposal imposes an unfair burden on Massachusetts’ employers without making the structural reforms essential to MassHealth’s long-term sustainability. Without further action, MassHealth growth will continue to crowd out other budget priorities and corrode the commercial insurance market.” Baker has given the legislature until September 15th to address a MassHealth reform package through an open hearing process. We will have to wait to see if they will give up their precious August recess to get to work on this important and pressing issue.
Legislative leaders are expected to vote to override many of Baker’s fiscally responsible vetoes. MassFiscal will be watching and scoring how they vote. Please make sure to check for updates, more to come.