Addressing Major Drivers of MassHealth Per-Enrollee Spending Growth

Prepared for the Massachusetts Medicaid Policy Institute, a program of the Blue Cross Blue Shield of Massachusetts Foundation

The Massachusetts Medicaid program, MassHealth, plays a critical role as a source of health insurance coverage in Massachusetts. It covers a broad range of residents of the commonwealth, including vulnerable populations such as seniors, people with disabilities, and children. It has also become a significant source of coverage for low-income, nondisabled adults ever since the implementation of coverage expansions under the Affordable Care Act. In total, the program now covers approximately one in four Massachusetts residents.

While Massachusetts has made considerable advances in healthcare coverage and access for its residents, the state has also seen the MassHealth budget grow substantially in recent years. In response, the state has sought to address MassHealth spending growth through a number of channels, including by establishing the Health Policy Commission and the Center for Health Information and Analysis in 2012 to study and monitor healthcare payment and delivery issues in the state. In 2017, it launched ambitious Medicaid Accountable Care Organizations, which now enroll nearly half of MassHealth enrollees and contain significant accountability mechanisms related to quality and total cost of care.

However, to ensure the long-term sustainability of MassHealth, it is imperative that the state continue to explore meaningful cost-containment strategies while maintaining its commitment to high-quality, affordable, accessible care. A new report—developed by Manatt Health with the support of the Blue Cross Blue Shield of Massachusetts Foundation—seeks to inform the MassHealth sustainability discussion through an analysis of spending and enrollment data that differentiates among the major drivers of spending growth across the state’s managed care and fee-for-service delivery systems. The report focuses on identifying the key drivers of growth in per-enrollee spending, which Manatt argues should be an increasing focus of policymakers in the commonwealth.

Click here to read the full report.

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