By Matt Murphy, Eagle Statehouse Bureau
The state has struck a deal with the Bush administration over a multibillion-dollar federal Medicaid waiver without which Massachusetts' landmark health care reform law might have been in jeopardy.
Gov. Deval L. Patrick and his administration announced yesterday that a deal had been brokered after long, difficult negotiations with the White House and Secretary of Health and Human Services Michael Leavitt.
Massachusetts won authorization to spend up to $21.2 billion over the next three years to continue to insure thousands of Massachusetts residents, $4.3 billion more than the previous three-year waiver.
The agreement includes a 50 percent match from the federal government worth $10.6 billion, a huge reimbursement that threatened to upend the state's budget if it fell through.
"This is an exceptional outcome under any circumstance, but especially now," Patrick said, referring to the financial uncertainty in the country.
In just two years, the state has signed up more than 439,000 new subscribers through the state's subsidized Commonwealth Care program, dramatically reducing the number of uninsured residents.
The federal waiver will allow Massachusetts to continue using federal Medicaid dollars to cover the long-term unemployed, the disabled, and people living with HIV. The state will also be able to continue offering subsidized coverage to those earning up to 300 percent
of the poverty level. The federal government typically limits Medicaid reimbursement to 200 percent of the poverty level.
"It is also a signal from the federal government that they support and believe in what we're trying to do here," said Senate President Therese Murray.
The Patrick administration has been negotiating the terms of the new waiver since the previous agreement expired on June 30, securing a number of two week extensions to get the deal done. State Secretary of Health and Human Services JudyAnn Bigby said a number of factors made the deal difficult, including the newness of the state's health plan that made some data hard to provide, as well as the turnover in the Bush administration as officials prepare to leave the White House in January.
State officials said Sen. Edward M. Kennedy and Sen. John F. Kerry were instrumental in securing the funding as Kennedy made many phone calls on behalf of the state from his Hyannisport home as he recovers from cancer treatments.
"This is happening because of leadership, because people have tried to break the hurdles and do good for citizens," said Kerry, who called the waiver a victory for children, parents and grandparents who will now have access to doctors, preventive care and prescription drugs.
Officials declined to discuss what they asked for but didn't to secure in the agreement, saying only that this new deal will ensure that all of the state's health care obligations can be met.
The announcement yesterday came as the lone bright spot as the state continues to struggle with declining revenues and prepares to make deep cuts in the state budget as early as next week.
Treasurer Tim Cahill said the national financial crisis has already started to trickle down to Massachusetts, where dried credit markets forced Cahill to raid the rainy-day fund this week just to make local aid payments because the state could not secure a short-term loan to meet cash flow needs.
"This was a big question mark, and it is one element we can take off the table going forward," Patrick said when asked about the waiver's impact on the budget.
The governor hinted he would have more to say on the budget later this week when state Sen. Steven Panagiotakos, D-Lowell, predicted the administration would likely revise revenue estimates down for fiscal 2009, triggering Patrick's 9c authority to make cuts in executive office agencies.
"This removes a major revenue or fiscal uncertainty, but the budget problems are really due to a substantial fall off in revenue in September, and we're trying to act proactively in balancing the budget," said Panagiotakos, chairman of Senate Ways and Means.
Panagiotakos said the Legislature has not yet been involved in discussions about where the budget cuts will come, but he expects to be part of that discussion with the governor in the coming days once it is clearer how much must be trimmed.