Governor Paul Cellucci, offering his first health-care
initiative since the fiscal crisis at Harvard Pilgrim Health Care was discovered, wants to
take millions of dollars set aside for the uninsured and lend it to struggling nonprofit
hospitals, nursing homes, and clinics.
According to a memo circulated among Cellucci's staff,
a little-used $125 million fund established by former governor Michael S. Dukakis as the
first step to guaranteeing health insurance for all state residents has accumulated a
With the Harvard Pilgrim situation fresh in the
public's mind, Cellucci's staff filed legislation last night asking the Legislature to set
aside $90 million of the total for low-interest emergency loans to health-care providers.
"This money was essentially set aside for health
care, yet the purpose of it was never realized," said John Birtwell, the governor's
spokesman. "This is a way to have an immediate impact on providers who are struggling
and need help."
Because the proposal doesn't dip into the general
fund, the governor's office hopes the plan will be more palatable than asking the
Legislature for a taxpayer bailout of Harvard Pilgrim, which was forced into state
receivership on Jan. 4.
The fund, called the Medical Security Trust Fund, was
established in 1988. Large employers are required to contribute $16.80 per worker
annually, for a total of $48 million last year.
But given the recent economic boom and continued low
unemployment, only $14 million was spent last year on health insurance for workers who
have been laid off or who have fallen through the cracks because they work part time or on
a contract basis.
The rest sits in a bank account earning interest.
The Dukakis legislation was intended to be the first
step toward universal health insurance for all Massachusetts residents, but the remainder
of his plan was later repealed.
Because the fund was established solely to provide
health insurance for the unemployed who meet certain income requirements, any change
Cellucci is proposing a one-time transfer of $90
million to create the Health Care Access Preservation Fund. Further revenue would be
generated from the interest paid by providers and by leveraging the money to sell bonds.
The administration said plenty of money would be left
over to provide health insurance to the 10,000 adults and children who qualify for the
program in any given week -- even if the state falls into another recession.
The Division of Health Care Financing and Policy would
establish criteria for receiving the emergency loans, which would go to providers that
offer services not readily available elsewhere, that serve a large number of Medicare and
Medicaid patients, that are experiencing financial hardship, and that display strong
leadership and an ability to repay the loans.
Andrew Dreyfus, executive vice president of the
Massachusetts Hospital Association, was pleased but cautious about the governor's
"We will need to examine it closely to make sure
there are sufficient funds remaining for the uninsured," he said. "But we are
pleased that the governor recognizes the urgent financial problems of many
Dreyfus said that he would not want to see the new
fund take the place of "fundamental reform of the system," which legislators and
the governor's office say will be addressed by a special task force that will be formed in
As a concession to employers, who administration
sources said have mixed views about the loan fund, Cellucci also is asking the Legislature
to reduce the amount that employers contribute to the fund by 25 percent. A Rate Review
Board would be allowed to increase or decrease the amount of the contributions in the
event of a change in the state's economy.