Massachusetts' charity care fund is running on empty
The solution was for all hospitals and insurers to pay an annual fee into a Health Safety Net fund, which reimburses a portion of the free care provided by community health centers and hospitals.
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The good news is the program worked as intended, partially compensating health care providers for treating patients who lack insurance or have insufficient insurance, a population that is overwhelmingly low income. The bad news is the program no longer has anywhere near enough money to cover the care hospitals provide.
In fiscal 2023, the
To be sure, hospitals receive public benefits like tax breaks in exchange for providing their communities with charitable care. And many hospitals
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The shortfall raises an important question: Are more people uninsured or underinsured today, and what can be done about it? It also suggests that after 19 years, Health Safety Net funding needs updating.
A MassHealth spokesperson said MassHealth lacks data to support the idea that the uninsured rate is causing the shortfall. The latest official data, from 2023, say only
Anecdotally, though, experts suggest this number may be increasing. Dr. Eric Dickson, president and CEO of UMass Memorial Health, said his hospitals see many newly arrived immigrants who don't have insurance or have public insurance that only covers emergency care. New arrivals may be ineligible for insurance due to immigration status or may not know what they are eligible for.
Peter Banko, president and CEO of Baystate Health, said that system has seen a sixfold increase over seven years in unpaid debt from people who are employed but low-income. These people may have high-deductible health plans and can't afford the deductible and may delay care until a medical situation worsens.
The state also recently reviewed eligibility for all MassHealth enrollees. Hannah Frigand, who oversees Health Care for All's consumer helpline, said some people who were deemed ineligible for MassHealth have not reenrolled elsewhere. Some may be eligible for employer-sponsored insurance but didn't take it because it was too expensive or they missed open enrollment.
One important step to reducing the shortfall is ensuring everyone who is insurance-eligible is enrolled.
Another issue is simply the growing cost of care. Every year, hospitals cumulatively pay $165 million into the Health Safety Net; insurers pay another $165 million; and state government last year paid $16 million. The problem is the amounts were set in law when the Health Safety Net was created, without accounting for inflation. Then, the assumption was the need for the pool would lessen as more people obtained insurance. Instead, people have continued to be uninsured and underinsured, and costs of care have climbed.
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Since the COVID-19 pandemic, there has been growing demand for care, combined with increasing costs for health care and prescription drugs. The Health Safety Net reimburses hospitals based on Medicare rates, so as those rates rise with inflation, applications for reimbursement rise.
According to the Health Safety Net's
A MassHealth spokesperson said the Health Safety Net 'is reviewing its policies to better support providers who serve uninsured or underinsured patients.' There is likely room to revise the distribution formula to better prioritize hospitals that care for the lowest income patients, while also revising the funding formula to account for inflation.
Anyone who presents at a hospital can and should get care. Finding the fairest way to pay for that care remains a work in progress.
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