CMS Approves Healthcare Reform Waiver

July 28, 2006

The federal government has approved the state's Medicaid waiver application which preserves $770 million in aid to Massachusetts over the next two years. The state had been receiving $385 million since 1997 under a waiver program the federal government wanted to phase out. Federal officials had threatened not to renew the waiver unless the state significantly changed the way it used the federal money, in particular shifting a large portion of the federal dollars to subsidize coverage for individuals. This approval and the funding will help facilitate implementation of the state's health insurance expansion law including:

• Secure funding to provide premium assistance, including expanding the threshold for the Insurance Partnership to 300%
• The cap on MassHealth Essential with its 10,500 wait list will be lifted
• State officials said the waiver also includes $225 million annually in new money to expand Medicaid.

Governor Romney said of the approval, "It means that Massachusetts is now at the forefront of a revolution in the way we think about health care. The reforms we crafted bring coverage to all our citizens, without a government takeover of health care, and without the need to raise taxes."

U.S. Secretary of Health and Human Services Michael Leavitt who appeared with Governor Romney yesterday called the health care reform plan a "serious innovation." On a cautionary note he said, "None of us should expect protection here. Mistakes are going to be made, lessons are going to be learned and they will be learned by lots of people and we'll all get better at this. But this is an important moment and not just today in the state of Massachusetts, but also across the country.

Sen. Edward M. Kennedy, D-Mass., who helped negotiate a 2005 waiver extension, as well as the new state health care program signed into law in April, made the following statement: "Two years ago, Massachusetts faced the loss of nearly $600 million a year in Medicaid funds." Kennedy said, "Final approval of the waiver not only allows Massachusetts to keep the Medicaid funds, but also allows us to move forward with health reform. Instead of facing health care cuts, we're well on our way to achieving our long-standing goal of health care for all."

Congratulations are in order for all of those whose hard work has led to this result.

Please feel free to e-mail any questions, comments or concerns. We will continue to update you as more information becomes available.

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