Costs of Massachusetts Health Care Overhaul Rising Above Projections

Massachusetts officials expect the state's health care reform effort to exceed the original budget for the program by about $245 million this year and another $400 million next year, largely because more people than expected are enrolling in state-subsidized coverage options, the Boston Globe reports.

Under the 2006 law, state residents must have health insurance or face a penalty on their state income tax.

Officials projected 140,000 state residents would enroll in the state-backed plan, but enrollment is expected to hit 225,000 by June 2009. As of December 2007, 169,000 people had enrolled in the plan.

Massachusetts Gov. Deval Patrick (D) said he is committed to maintaining state funding for the health care overhaul, describing the numbers he used in his state budget proposal.

Last year, the state Legislature approved the governor's funding recommendation for the health care program. A final budget is expected by the end of June.

The state expects federal funds to cover about half of the higher-than-expected costs for the program, but Massachusetts officials have only begun negotiations with the federal government on the matter.

Massachusetts is downgrading its expectations for covering the cost of the health insurance coverage expansion with revenue from other sources.

For example, the state now expects to collect only $5 million in revenue from businesses that do not offer health care benefits to employees, down from $24 million.

In addition, Patrick's budget proposal does not count on the state being able to shift as much money as initially expected away from its fund that helps compensate for unreimbursed medical services (Dembner, Boston Globe, 1/24).