Charlie Baker sent a letter to key members of the U.S. Senate this past Friday, an ominous document concerning matters with the potential to cause enormous harm in Massachusetts: federal cost sharing reduction payments, and the effort by the Republican majority in both branches of Congress to repeal and replace Obamacare.
ADDENDUM: A few hours after the Baker administration made public the above referenced letter, the Massachusetts Democratic Party issued a statement, which said, in part, "It's beyond time for Governor Baker to do more than send another anemic letter to be filed away in a drawer down in D.C. He must do everything in his power to convince the members of his own party that Trumpcare is a deadly bill for Massachusetts and residents across the nation."
Anybody who cares about the financial health and stability of the Commonwealth should read this letter. It may be the most alarming document Gov. Baker has signed during his two-and-a-half years in office. Here’s a link to the text:
Cost Sharing Reduction Payments. After the Affordable Care Act (ACA), a.k.a. Obamacare, became law, hundreds of thousands of Massachusetts residents gained health coverage because the feds pumped new subsidies into the states, like ours, that agreed to expand their Medicaid programs -- subsidies that made health insurance premiums affordable for new enrollees for the first time. New federal dollars for health care were packaged, in part, as cost sharing reduction payments, or CSRs.
Some of the many Republicans in the U.S. House who hate the ACA filed a lawsuit against the Obama administration challenging the legality of CSRs, a suit now coming to a head. If that suit is not somehow resolved or averted, the Massachusetts health insurance market will be seriously disrupted, Baker warned in last Friday’s letter.
“Most immediately, federal cost sharing reduction payments (CSR) must be resolved affirmatively for FY2017 (the current fiscal year) and 2018 (the next fiscal year, beginning July 1, 2017) in order to maintain market stability and to constrain rate increases,” Baker wrote. (The governor’s letter was sent to, among others, Orrin Hatch, chair of the Senate Finance Committee, and Ron Wyden, the committee’s top-ranking Republican.)
For Massachusetts, Baker continued, “…the market is filing its rates for Plan Year 2018 imminently. If CSR payments were to be halted (as a result of the lawsuit), Massachusetts insurers specifically could be immediately liable for an estimated $63 million in unreimbursed costs for the remainder of calendar year 2017 and approximately $123 million in 2018.”
This, Baker warned, could "dramatically" increase 2018 insurance premiums in Massachusetts and force insurers to withdraw plans from the market, an outcome that would restrict access to health coverage for lower-income residents.
Obamacare Replacement. Baker has seen the future of health care in America as dreamed of by the most powerful members of his party and he is terrified.
In his letter this past Friday, when opining on the Obamacare replacement bill enacted in the Republican-dominated U.S. House, the American Health Care Act (AHCA), Baker said the bill “poses a significant threat to Massachusetts, from both fiscal and health care coverage perspectives.”
The Congressional Budget Office had not yet issued a fiscal scorecard on the AHCA, Baker noted, but “there is no question that this bill would result in a substantial loss of federal revenues to the state and loss of health coverage for thousands of currently insured individuals.”
If the AHCA becomes law, Baker wrote, “thousands will lose their health coverage in the first year, and Massachusetts will lose approximately $1 billion in (annual) revenues, starting in 2020.” He pointed out, “The loss of federal dollars increases annually thereafter.”
Putting such a loss in context, consider that the millionaire’s surtax proposal now wending its way to the 2018 Massachusetts ballot would yield an estimated $2 billion per year. We could need all of that money one day just to cover federal shortfalls in MassHealth!
To recap:
Our fiscally conservative, socially liberal Republican governor is certain that a lawsuit by his fellow Republicans, if successful, will severely damage his state’s insurance marketplace, harming people he's sworn to protect, and that the U.S. Senate should reject the House-approved American Health Care Act because it would blast a $1-billion-dollar-sized hole in the Massachusetts state budget the very first year it takes effect.
If these feared and predicted outcomes occur, they’ll start appearing in 2018, just as the governor is beginning his re-election campaign in earnest.
One does not have to be pundit to foresee these problems colliding with Baker's hopes for a second term.
Part of Charlie Baker has to be wondering if a second term is really such a good idea in a world where health care has been reshaped in the image of today's Republican Party, the ancestral home of Teddy Roosevelt, Dwight Eisenhower and Richard Nixon, who, don’t forget, was once willing to entertain seriously a national health care plan.
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