Health-care spending nearly half of state budget

BOSTON -- Between the Medicaid program, subsidized insurance under the 2006 health-care-access reform law, and investments in state employee health insurance and public-health programs, health care spending this fiscal year is on pace to rise to 43 percent of the overall state budget, according to an analysis of the spending bill being reviewed by Gov. Deval Patrick.

One in five Massachusetts residents will have their health care largely covered through the budget and taxpayer-supported health-care costs next year will gobble up the majority of new discretionary state revenue, hitting $15.14 billion, up from $14.65 billion. But education accounts will also get a big boost, according to a Massachusetts Budget and Policy Center analysis of the budget lawmakers agreed to last week.

While lawmakers and the Patrick administration this year have described fiscal 2013 spending plans ranging from $32.4 billion to $32.5 billion, the center's analysis estimates total state appropriations and transfers at $35.229 billion. Center officials say the higher figure reflects revenues collected and spent on transportation, school construction, public employee pensions and health care based on directives that carve out such spending before deliberations on the rest of the state budget begin each year.

Patrick has until Sunday, July 8 to sign the budget and announce his vetoes and amendments to the bill.

The center provides independent research and analysis of state budget

Aside from a proposed $546 million increase in spending on Medicaid and health care reform, the fiscal 2013 budget, approved easily last week by the House and Senate after a deal was struck by a conference committee, proposes $6.95 billion in total education spending, an increase of $302 million.

The majority of the increased education spending, or $238 million is targeted for the K-12 education system, with higher education in line for an increase of $58 million to a total of $1.02 billion, and early education and care spending scheduled to fall to $500 million, from $507 million.

Taken together, proposed state spending on health care and education in fiscal 2013 will approach $22.1 billion, representing about 63 percent of all state spending. Health care spending, as a percentage of the budget, will rise to 43 percent from about 42.8 percent.

But even with the 5.3 percent increase in spending on Medicaid, budget managers will need to secure about $500 million in savings in the program to balance the budget next year. The savings, with some spending cuts and $615 million in temporary revenues, are being relied upon to close an estimated $1.3 billion gap between available revenues and projected state spending based on fiscal 2012 levels. The center's analysis identifies $41 million in homeless shelter cuts and $8 million in child care subsidy cuts.

State spending on education and health care, by comparison, towers over investments in other key areas.

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Health-care spending nearly half of state budget

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