Mass. taxpayers to pay more than $160 million for Obamacare over next decade

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BOSTON – Massachusetts taxpayers will pay a hefty price of more than $160 million over the next decade to cover federal expansion of healthcare coverage mandated under Obamacare, according to a new report by the Pioneer Institute.

The report, authored by Joshua Archambault and Lauren Corvese, examines the potential budget impact of the Health Insurer Provider Fee (HIPF), a revenue-raising mechanism of the Affordable Care Act.

The study focuses on the HIPF, a joint federal and state tax, one of over twenty initiatives aimed paying for the cost of expanded healthcare coverage under Obamacare. According to Pioneer, Massachusetts will spend at least $324 on HIPF by 2025, although half of that amount will be reimbursed by the federal government.

Massachusetts residents, however, bear the full cost upfront. In 2015, for example, HIPF cost Massachusetts taxpayers $36 million. Eventually, the federal government will reimburse the state 50percent of that amount, meaning that the total costs to Bay State residents for 2015 will clock in at $18 million.

Over the next 10 years, with a brief respite in 2017 due to a legislated suspension of the fee, that $36 million outlay will rise to the level of $324 million, half of which will be reimbursed by the feds.

The fee will be paid by the state’s Medicaid program, MassHealth, which currently costs Massachusetts’ taxpayers approximately $15 billion per year. MassHealth is the largest item in the state’s $36 billion budget. The federal expansions follow a year of efforts to reform Massachusetts’ healthcare system, which Governor Charlie Baker has said is unsustainable in its current structure. Despite a reform plan released earlier this spring, the proposed budget for MassHealth for fiscal year 2017 revealed a 3.9 percent increase healthcare spending.

Archambault called HIPF another “unintended consequence of the federal health reform law,” which will divert money from education, transportation, and public safety.

Read the full report here.