PROVINCETOWN — A 10-year budget resolution that could strip up to $880 billion from Medicaid passed the U.S. House in February, raising the prospect of large cuts in the MassHealth program.
According to an interview with former Congressional Budget Office director Doug Elmendorf, posted by the Harvard Kennedy School, the bill is a “reconciliation instruction,” which means the Senate’s version, which has not yet been published, could pass with only 50 votes and avoid a filibuster by Senate Democrats.
If the cuts were spread evenly across the states, they would cost each state about 16 percent of its federal Medicaid funding.
Massachusetts would lose $2 billion per year for the next 10 years, according to a KFF analysis. That is about double what the state is now raising with its new 4-percent surtax on income over $1 million.
Outer Cape Health Services CEO Damian Archer told the Independent that at any given time, between 20 and 25 percent of the health center’s 20,000 patients are covered by MassHealth.
While changes to MassHealth are still hypothetical, Archer said, “if there are shifts in the way the states have to find a way to pay for Medicaid, the state may then become more restrictive in who is eligible.”
One idea circulating among Republicans is to target the expansion of Medicaid that took place under the Affordable Care Act of 2010, which in Massachusetts helped bring the state’s uninsured rate to less than 2 percent of the population in 2023.
Other proposals would add work requirements or require income re-verification every six months — which reduces the overall cost of Medicaid mostly because so many people fail to complete the paperwork and are kicked out of the program, according to a report by the Center for Budget and Policy Priorities.
Archer said that he and the leaders of other community health centers are advocating against any new work requirement for Medicaid. Fewer than 10 percent of patients at OCHS are uninsured, but any increase in the uninsured rate would create new costs that would be passed on to other patients, Archer said.
When people delay preventive care, they are more likely to wind up in the emergency room, which “triples or quadruples the cost of care,” Archer said. Those increases “get passed on to everyone, like a tax,” because hospital bills get passed on to commercial insurance companies, which then raise premiums.
Uninsured patients are also a direct cost to OCHS, because federally qualified community health centers are required to provide care for all patients regardless of ability to pay. Outer Cape Health Services has a “sliding scale” for charging uninsured people for health services that is based on the patient’s income, Archer said, but it is well below the cost of the care.
Commercial Insurance
Patients losing their MassHealth coverage and becoming uninsured isn’t the only threat to the bottom line at OCHS, Archer said.
The health center is actually much better compensated by MassHealth and Medicare than by the commercial insurance companies that employers use, he said. Insurance plans like those from Tufts, Boston Medical Center, and Blue Cross Blue Shield are regulated by the state but negotiate their reimbursement rates with providers, and according to Archer, the health centers don’t have much bargaining power compared to larger hospital-based systems.
“If we were paid the ‘prospective payment system rate’ that we are paid for Medicaid and Medicare patients by our commercial payers — if we were just to get the same rate across all our insurers — that would be huge,” Archer said. Medicare and Medicaid are effectively subsidizing the insurance companies, which sometimes pay community health centers just a third of what Medicare and Medicaid would, he said. OCHS often loses money on care that’s paid by commercial insurance, he added.
“There was a state bill that included changes to the commercial payment floor for community health centers that didn’t pass last year, but I know Sen. Cyr filed it again,” Archer said.
“Now that we’re in this environment where there are existential threats to our organization” — including the loss of other kinds of direct federal funding to community health centers, as the Independent reported last month — “I’m hopeful the state legislature will take a second look at it,” Archer said.
“It’s still really early in the session,” said state Sen. Julian Cyr — but he is hoping that Senate Bill 711 or something like it could become law. The bill would require commercial insurance companies to match the rates MassHealth pays to community health centers. Earlier this year, Gov. Maura Healey signed legislation creating a task force on primary care access, delivery, and payment, and Cyr said that rate equity could become a priority for that task force.
“When we look at who is providing primary care, mental health care, and prenatal care to some of the most vulnerable people in Massachusetts, community health centers are the leaders in that care,” Cyr said. The Mass. League of Community Health Centers helped draft last year’s bill, he said, which passed the Senate but never made it into conference legislation with the state House.
This year’s bill is currently at the Joint Committee on Financial Services.
“The number-one factor affecting our ability to get more patients in the door is our ability to pay competitive wages,” said Archer. If reimbursements from private insurers suddenly equaled those from Medicare and Medicaid, Archer said, he would put the additional funds toward recruiting and retaining staff and expanding services.
“It’s a concrete, solid, very logical, very fair bill that just makes sense,” he said.