Better than printing money

John McDonough, one of the health care experts in Massachusetts, writes on his blog about the three-year renewal of the state's Medicaid waiver.  John presents a history of the waiver and notes that it provides the "green glue," i.e., the infusion of federal cash, that makes possible the health care reform process approved by this state several years ago.

The details are impressive. $26.7 billion over three years, a $5.69 billion increase over the prior waiver, and bringing $13.3 billion federal dollars to the state; $120 million for safety net hospitals such as Boston Medical Center (BMC) and Cambridge Health Alliance (CHA); a pilot project to improve pediatric asthma care; a first-in-the-nation express renewal process for MassHealth, the state's Medicaid program; enhanced early intervention services for Autism Spectrum Disorders, and more.

There are many similarities between the Massachusetts health care access legislation and the federal plan passed by Congress  -- individual mandate, guaranteed issue of insurance, an insurance exchange with minimum coverage standards, and subsidized insurance plans for lower income people.  The big difference is that a substantial part of the costs of the state plan are covered by this Medicaid waiver, offsetting appropriations that would otherwise be needed from the state treasury.  The federal government, in contrast, has no higher level of government to provide funding for its program. It was well known when the federal bill passed that the financial projections showing zero budget impacts were wrong, ignoring, for example, the annual multi-billion dollar override of the SGR adjustment for physician salaries.  Since the legislation really did not provide comprehensive ways to address those cost increases, they will remain a political battle in coming years.