January 15, 2017

On Beacon Hill: Obamacare, the Trump effect and a budget boondoggle

Print More

Antonio Caban / State House News Service

Gov. Charlie Baker

Recap and analysis of the week in state, and federal, government
from State House News Service

In five days, Donald Trump will become president of the United States of America.

In 10 days, Massachusetts Gov. Charlie Baker will file a budget proposal, his third, for fiscal 2018.

And in 298 days, voters in the city of Boston will choose a mayor for the next four years.

Because of the uncertainty, to various degrees, surrounding each of those moments, the early days of January have become an exercise in preparation and positioning, none more prominent nor sprinkled with question marks than what happens after Trump takes the oath of office.

From secret dossiers on Russian interference and collusion to Cabinet nominees contradicting policy statements made by the president-elect as confirmation hearings got underway, the Trump effect could not be ignored last week by even the most parochial of politicos who come to work each day on Beacon Hill.

Even Baker, who has tried at every turn to resist getting drawn into the Trump orbit, could not avoid putting his thumb on the scale of the healthcare debate that heated up in the Republican-controlled Congress to a scorching degree last week.

Wikimedia Commons / Gage Skidmore

Donald Trump

Trump has called the Affordable Care Act (ACA) a failed “disaster,” and House Speaker Paul Ryan described Obamacare repeal as a “rescue mission,” but Baker, in a detailed and lengthy response to questions from Congress, defended key aspects of the ACA — such as protections for patients with pre-existing conditions against denial of coverage — and offered a laundry list of tweaks that would give states more flexibility to customize healthcare systems without jeopardizing access.

Among Baker’s chief ACA concerns is how its expansion of government-funded health insurance has produced a surge in MassHealth enrollment in Massachusetts, putting unsustainable financial pressures on the state budget.

MassHealth enrollment is already forcing the administration to solve $600 million in increased costs next year (see story below). What happens in Congress could further impact state finances as the budgeting process for fiscal 2018 gets underway.

— Matt Murphy

OFF THE TOP

  • BUDGET BASELINE: Administration and Finance Secretary Kristen Lepore, and House and Senate Ways and Means chairpersons Rep. Brian Dempsey, D-Haverhill, and Sen. Karen Spilka, D-Ashland, agreed to an estimate for fiscal 2018 that will assume $27 billion in taxes are available to help finance what will likely be the state’s first $40 billion budget. The revenue estimate assumes 3.9 percent growth in tax revenues when growth through the first six months of the current fiscal year has topped out at 2.3 percent. So despite the administration and legislative leaders using words “conservative,” “cautious” and “modest” to describe the forecast, it once again runs the danger of being anything but that.

ALSO ON THE AGENDA

  • Neal spars with Ryan over Obamacare repeal
  • A ‘positive’ outlook on statewide property values
  • The next steps for online gaming
  • MassHealth surge strains state budget
  • Loans forgiven for students of fraudulent training school

THE BIG DEAL

Neal holds Ryan’s feet to fire in debate over Obamacare repeal, potential solutions

By Colin A. Young

The U.S. House advanced a measure on Friday that paves the way for the repeal of the Affordable Care Act, but not before the dean of the Massachusetts delegation went toe-to-toe with Speaker Paul Ryan on the floor, calling the bid to dismantle the health care law “an effort at rhetoric.”

U.S. Rep. Richard Neal of Springfield, the highest-ranking Democrat on the Ways and Means Committee, criticized the GOP for moving swiftly to repeal the ACA without detailing a plan for its replacement.

“We’ve waited seven years to hear the alternative,” he said. “We want to hear what the plan is, we want to understand what the alternative is, we want to know precisely what is going to be included — or just as importantly, what will be excluded — from the benefits that this Affordable Care Act has given to the American people.”

Colin A. Young

U.S. Rep. Richard Neal

Neal cited the letter Mass. Gov. Charlie Baker sent this week to congressional leaders outlining his thoughts on how to “improve upon the goals” of the ACA. Baker, a Republican, stopped short of endorsing a full repeal of the law.

Ryan, who spoke from the House floor immediately following Neal, said the resolution before the House would give Congress tools necessary to repeal the ACA and promised “a thoughtful, step-by-step process” to repeal.

“This is a critical first step towards delivering relief to Americans who are struggling under this law,” the speaker said. “Our goal is a truly patient-centered system, which means more options to choose from, lower costs, and greater control over your coverage. As we work to get there, we will make sure that there is a stable transition period so that people don’t have the rug pulled out from under them.”

The House ultimately agreed to the resolution on a 227-198 vote, with nine Republicans joining the Democrats in voting no. No Democrat supported the resolution.

It was not immediately clear if all of Massachusetts’ representatives — all nine of them Democrats — voted on the resolution Friday. The U.S. Senate passed the same measure early Thursday morning on a 51-to-48 vote.

The House spent several hours debating a budget blueprint resolution that would pave the way for Republicans to gut the ACA without the possibility of a Democratic filibuster in the Senate.

ACA repeal is a priority for Republicans, who control both branches of Congress, and President-elect Donald Trump, who will be sworn in Friday.

According to the Wall Street Journal, the resolution instructs two House and two Senate committees to draft legislation by Jan. 27 to repeal the ACA.

About three hours before the vote, Neal argued on the floor that Republicans in Congress should be trying to work with Democrats to fix problems with the ACA “instead of saying ‘repeal and replace.’ ”

“How empty is that rhetoric?” Neal asked as his time expired.

Minority Leader Nancy Pelosi — who was speaker when the ACA was adopted in 2010 — rebutted Ryan’s floor speech, with the California Democrat arguing that because the ACA, Medicaid and Medicare have become so intermingled, repealing the ACA would be an “assault on Medicaid” and “an assault on families to have financial security.”

Republican opponents of the ACA say the law has led to rapidly rising insurance premiums after its proponents predicted lower-cost plans.

Massachusetts in 2006 approved its own law expanding access to health insurance coverage and in 2012 passed another law aimed at keeping cost growth down. Overall health care expenditures in Massachusetts in each of the past two years have exceeded the state’s economic growth benchmark.

NOTED

Assessed property values = ‘credit positive’ for cities and towns

The total assessed value for cities and towns in Massachusetts has exceeded $1 trillion for the first time, according to a credit rating agency, which reported that the growth is “credit positive” for municipalities.

Moody’s Investor Service said the declaration, which is not the equivalent of a ratings outlook or change, reflects the state’s overall economic strength. It noted that assessed values are a driver of local government tax revenues.

Citing data recently released by the state Division of Local Services, Moody’s said the recession and home price depreciation reduced the state’s total assessed value by an average of 3 percent from 2009 through 2011. Values stabilized in 2012 and 2013, before escalating. Total assessed value rose 6 percent in both 2016 and 2017.

The value of taxable property in Worcester jumped 9.16 percent to $12.26 billion as a result of last year’s assessment.

While 92 percent of the state’s 351 cities and towns reported increased or stable valuations in 2017, 58 percent of cities and towns are still below their 2008 assessed values. Moody’s said municipalities with assessed values that are more than $1 billion lower than pre-recession peaks include Brockton, Fall River, New Bedford and Taunton. Four of the top five assessed value increases in 2017 — all double digits — were Boston, Cambridge, Chelsea and Somerville.

— Michael P. Norton

LOOKING AHEAD

Coakley to speak as online gaming/fantasy sports panel meets

The Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports holds its second meeting 11 a.m. Tuesday at the State House.

The commission, created in this summer’s economic development law, is charged with conducting a “comprehensive study” of daily fantasy sports and other online gaming activities.

The commission will hear testimony from former Attorney General Martha Coakley, who has been retained as an outside advisor to DraftKings, and attorney Jeremy Kudon, whose law firm website credits him with “crafting a state-by-state strategy to persuade legislators around the country to regulate the (fantasy sports) industry — thereby avoiding litigation.”

State Assistant Attorney General Dan Krockmalnic will discuss consumer protection and Mass. Attorney General Maura Healey’s DFS regulation. Justin Stempeck and Paul Connelly, both from the Massachusetts Gaming Commission, will also offer testimony.

IN THE NEWS

As enrollment climbs, MassHealth strains state budget crunch

Over the past decade, enrollment in government-funded health coverage under MassHealth has rocketed upwards, growing by 70 percent since 2007, when Gov. Deval Patrick took office, and is exerting increasing pressure on state finances as more full-time employees are finding their way onto government-subsidized health plans.

After declining in his first year in office, MassHealth enrollment under Gov. Charlie Baker has cleared peak levels during Patrick’s final year and is approaching the 2 million mark.

Antonio Caban / State House News Service

Gov. Charlie Baker

The surge in enrollment in the state’s biggest and most costly program underscores the demand for health care coverage among disabled individuals and low-income children, families and adults, and also reflects eligibility expansions authorized under the six-year-old federal Affordable Care Act.

But it is also putting pressure on the state’s $39.25 billion budget at a time when the country is bracing for changes in federal health care policy and coping with the uncertainty of when Congress votes to repeal the ACA and what type of program, if any, it will substitute for it.

The Baker administration, according to officials, is preparing to deal with a $600 million increase in required spending in the MassHealth program in fiscal 2018 due to enrollment growth as the percentage of residents receiving MassHealth as their primary coverage has grown from 16 percent to 21 percent, or more than 523,000 enrollees, since 2011.

The administration attributes the surge in enrollment and costs to a shift away from commercial coverage offered through employers. The trend, according to officials, can be explained in part by expanded eligibility under the ACA and the absence of penalties on companies that don’t offer insurance — penalties that were authorized under the federal law, but have never fully taken effect.

The number of full-time employees not covered by employer-sponsored insurance grew by 15 percent, or 118,000 workers, between 2011 and 2015, from 740,000 to 859,000, according to the state Executive Office of Health and Human Services. During that time, the number of full-time workers not offered coverage through their employer grew by 38,000, while 80,000 more workers declined their employer-sponsored coverage in favor of MassHealth, costing the state $511.5 million in the fourth quarter of 2015.

State House News Service inquired about enrollment in MassHealth after the Baker administration and state Treasurer Deborah Goldberg, in financial disclosure statements, indicated in 2016 that the program, funded at $15.9 billion in this year’s budget, was on track to finish the fiscal year with a potential $100 million deficiency because enrollment has exceeded projections.

The Baker administration now estimates that deficiency at $46 million net of projected federal reimbursements.

Enrollment figures obtained by the News Service show caseloads fell sharply in fiscal 2016 before shooting up in fiscal 2017, the current fiscal year.

MassHealth enrollment dipped 2.3 percent to 1,863,215, from fiscal 2015 to fiscal 2016, before rising 3.4 percent to a projected 1,926,700 in fiscal 2017.

— Michael P. Norton and Matt Murphy

Thousands of students duped by training school have loans forgiven

Nearly 4,500 students of the now-closed American Career Institute’s five Massachusetts campuses will have their federal student loans forgiven by the U.S. government, state Attorney General Maura Healey and U.S. Sen. Elizabeth Warren announced Friday.

State House News Service

Maura Healey and Elizabeth Warren “win one for the good guys.”

“Some days the good guys win, and today is one of those days,” Warren said.

The former ACI students will also be entitled to refunds of any payments made on their federal loans, and the combined loan discharges for ACI students will total roughly $30 million, according to Healey’s office.

“ACI was a predatory for-profit school that admitted to breaking Massachusetts law and lying to students,” Healey said in a press conference at her office. “It promised meaningful vocational training opportunities, but it failed to deliver.”

Between 2010 and early 2013, the for-profit American Career Institute operated career training schools in Braintree, Cambridge, Framingham, Springfield and Woburn — along with campuses in Maryland — that offered certificate programs in fields such as information technology and medical assisting, according to Healey’s office. Tuition and fees cost students up to $23,000.

— Katie Lannan

Leave a Reply

Your email address will not be published. Required fields are marked *