Federal Outlook
America is Having a Severe Case of Déjà Vu
As we know, history tends to repeat its self-time and time again. Many of you may have heard about the weird parallels between Lincoln and JFK, such as that both presidents were shot in the back of the head, on the Friday before a major holiday, while seated beside their wives, who both married socially prominent twenty-four-year-old woman who spoke French fluently, the list goes on and on. The same may be happening for 2020 and 2024. The Super Bowl in 2020 was between the 49ers and the Chiefs, same as in 2024, where the Chiefs won both games, Taylor Swift won Grammy awards in both 2020 and 2024, both years were leap years, and just like in 2020, we will see the same two candidates face off during the presidential election.
I am going to take a second to say, to be crystal clear, that I do not care who you vote for. That is your business, and it is your right as an American to believe what you want and vote how you want. Okay now back to the mess at hand
President Joe Biden, who was born before the invention of duct tape, penicillin, and the color TV, will once again face off against former President Donald Trump, whose skin looks like what happens if you eat too many carrots. I think we can all agree that this was the last matchup that we wanted to see, but here we are. This is the first presidential election rematch since 1956, which saw then President Dwight Eisenhower defeat for a second time in a row Democratic candidate, Adlai Stevenson, who could put a rock to sleep.
While it may be the same matchup, the sentiment around the election is very different. For one, we are no longer experiencing life as it was during COVID, where we saw state by state lockdowns, high unemployment numbers and a dire lack of live sports to watch. Contrast to the current climate we are living in, a world of high interest rates, unaffordable housing, and multiple military conflicts across the globe, and more sports betting than ever before.
The candidates, their political parties, the media, and really everyone are really focusing on one aspect when it comes to electability of the candidate, who is more “fit” to hold the office. I put fit in quotations because how that word is defined is different depending on who you ask. When it comes to President Biden “fitness” for office, people argue that he is too old to be president. Biden is 82 years old, which already makes him the oldest president in our history. If Biden were to win the election, he would be 86 when his term is over, which is even high for a golf score for a professional. Many have questioned his mental fitness at his current age, and are doubly concern that it will get worse as time goes on. Even the special counselor assigned to a case involving Biden’s storing classified documents after he was VP, expressing concern for his memory. Saying that he could not convict Biden beyond a reasonable doubt because “Mr. Biden would likely present himself to a jury, as he did during our interview of him, as a sympathetic, well-meaning, elderly man with a poor memory.” That report also comes after 4 years of President Biden mis-saying names of countries and people, on a weekly basis. There are countless examples of Biden having mental gaffes. It shows something that people were genuinely happy to hear that Biden got it right at a town hall when he said he was president of the U.S. and not another country. people are also worried that with his “advanced age” he can’t relate with younger populations and their concerns. I mean we come from two different times, Biden grew up when a fun activity as a kid was playing with string and skipping rocks, while my generations and people younger than me idea of fun is killing zombies in a video games and catfishing people online.
When it comes to former President Donald Trumps “fitness” for office, the considerations are less around his mental state, but more around his actions as president and his belief on the power of presidency. People especially his actions surrounding the January 6th insurrection and potential election interference. The former president has been indicted by a special counsel on felony charges for working to overturn the results of the 2020 election in the run-up to the violent riot by his supporters at the U.S. Capitol on Jan. 6, 2021. The four-count indictment includes charges of conspiracy to defraud the United States government and conspiracy to obstruct an official proceeding: the congressional certification of Joe Biden’s victory. by saying that the election was stolen and trying to persuade state officials, then-Vice President Mike Pence and finally Congress to overturn the legitimate results. He was also indicted in Georgia along with 18 others, for violating the state’s anti-racketeering law (RICO) by scheming to illegally overturn his 2020 election loss. RICO charges are better known for being used by law enforcement to down the Mafia in the 80s and 90s. It is important to note that the former President is yet to be convicted of any charges. People are also concerned because Trump has shared his belief publicly that a president should have immunity from any actions they take as president, which many believe goes against the original intent of the constitution and the separation of powers. Trump said on Truth Social in all-caps “A PRESIDENT OF THE UNITED STATES MUST HAVE FULL IMMUNITY, WITHOUT WHICH IT WOULD BE IMPOSSIBLE FOR HIM/HER TO PROPERLY FUNCTION”. Trump is effectively arguing that a president can do whatever he wants while president and cannot be held liable. This is response to charges that were filed against him for illegally holding onto classified documents and allegedly trying to move/destroy evidence. People are concerned that a candidate that has allegedly worked to fix and overturn an election, as well as believes that a president should have full immunity to do whatever they want while president, is not “fit” to hold the country’s highest office.
In the end, we can all agree that this election season is going to be exhausting. Thank god we have the Olympics to distract us for parts of it.
Federal Recap
Biden Unveils Budget Proposal for FY25
On Monday, President Biden unveiled his proposed budget for FY25, which looks to cut the deficit by $3 trillion over a decade, by increasing taxes for companies and the wealthy. The proposals calls for raising the corporate tax rate to 28 percent from 21 percent, which is the level that was set by the 2017 Tax Cuts and Jobs Act. It also calls for increasing what’s known as the corporate minimum tax to 21 percent from 15 percent. That tax, which was passed by Democrats in 2022, applies to corporations that report annual income of more than $1 billion to shareholders on their financial statements but use deductions, credits and other preferential tax treatments to reduce their effective tax rates well below the statutory 21 percent. In addition to quadrupling a 1 percent surcharge on corporate stock buybacks to 4 percent. White House economists estimate increasing the tax could yield $137 billion in new tax revenue over a decade.
For taxing the wealthy, the proposal includes language that would raise the capital gains tax rate for earner who make more than $400,000 a year to 39.6 percent, and close the so-called carried interest loophole that allows wealthy hedge fund managers and private equity executives to pay lower tax rates than entry-level employees. The most progressive policy included in the proposal would create a 25 percent “billionaire tax” on individuals with wealth, defined as the total value of their assets, of more than $100 million, with the goal is to prevent the wealthiest Americans from employing tax strategies that allow them pay lower tax rates than those of middle-class households.
Last Thursday, before the President’s State of the Union Address, House Republicans advanced their FY25 budget proposal, which would take a vastly different approach to balancing the budget, by cutting over $14 trillion in federal spending in such areas as green energy subsides and student loan forgiveness while reducing taxes. The House Budget Committee adopted the blueprint in a 19-15 party line vote last Thursday, with Budget committee chairman Jodey Arrington saying that the budget plan would reduce the federal debt, which stands at over $34 trillion, create a $44 billion budget surplus in fiscal 2034 and stir economic growth by lowering taxes. The budget postpones severe spending cuts until fiscal 2026, after the November election that will determine control of the White House and Congress. Committee documents show 2026 basic discretionary spending falling by more than $100 billion to $1.5 trillion.
To put it mildly, FY25 budget negotiations are expected to be turbulent, like a flight trying to fly through a hurricane. HCA will be watching the budget process closely as it unfolds.
Government Avoids Partial Government Shutdown, Still More to Do
Late on Friday, the Senate passed a government funding bill, funding roughly 30 percent of the federal government for the next six months, mere hours before the deadline. The legislation — which passed by a 75 to 22 vote — devotes $459 billion to the departments of Agriculture, Commerce, Energy, Housing and Urban Development, Interior, Justice, Transportation, and Veterans Affairs, as well as the Environmental Protection Agency and Food and Drug Administration, for the rest of the fiscal year, which ends Sept. 30. President Biden signed the packaged shortly after it cleared the Senate. Biden thanked Congressional leadership for working together to avoid a partial shutdown. The passing of the funding package came more than five months into the current budget year after congressional leaders relied on a series of stopgap bills to keep federal agencies funded for a few more weeks or months at a time while they struggled to reach agreement on full-year spending.
Through the funding package, non-defense spending will remain relatively flat compared with the previous year. Supporters say that’s progress in an era when annual federal deficits exceeding $1 trillion have become the norm. But many Republican lawmakers were seeking much steeper cuts and more policy victories. The funding packaged also includes over 6,000 earmarks requested by individual lawmakers with a price tag of about $12.7 billion. Earmarks, which were previously banned in 2011, but was recently voted to reinstate earmarks in 2021 by Democrats, with Republicans soon following suit.
Congress still needs to tackle tricker funding packages for remaining departments, including the Departments of Defense, Financial Services and General Government, Homeland Security, Labor-HHS, Legislative Branch, and State and Foreign Operations. Those bills are typically much more controversial and are at greater risk of failure than the bills that passed this week.
State Outlook
Where The Money At?
For the 9th straight month, state tax collections fell short once again in February. This extends what was already the longest streak of below-benchmark months in more than two decades, tax revenue remains down compared to a year ago. State House News reported that the Department of Revenue reported Tuesday that it collected $2.007 billion last month — $27 million or 1.3 percent more than actual collections in February 2023 but still $11 million or a slim 0.6 percent shy of the administration’s revised monthly benchmark of $2.018 billion. The Healey administration in January lowered the monthly benchmark for February from the $2.137 billion it originally projected for the month prior to the governor’s fiscal year 2024 revenue downgrade. The last time tax collections came in at or above the administration’s monthly benchmark was June 2023, nine months ago. The Healey administration didn’t establish fiscal 2024 benchmarks until August last year, so there was no official expectation set for July 2023. But each month since — now seven in a row — has seen collections fall short of the administration’s projections.
The Executive Office of Administration and Finance said the administration is not planning to make additional budget moves in connection with the below-benchmark February revenue report. A spokesman said the budget office’s outlook on fiscal 2024 has not changed. DOR is due to report revenue collections for March by Wednesday, April 3. The monthly benchmark for March, which DOR said is usually “a mid-size month for revenue collections, ranking sixth of the 12 months in eight of the last 10 years,” is set at $3.935 billion. That would be $52 million more than what was collected in March 2023.
State Recap
Massachusetts Health Care Costs Rose in 2022
The Center for Health Information and Analysis (CHIA), created under a 2012 cost containment law, released its annual report Wednesday examining health care spending trends in 2022. The detailed report covers a year that started with record-high reporting of COVID-19 cases, followed by gradual decline throughout the year.
CHIA’s annual report estimated total health care spending in Massachusetts at $71.7 billion in 2022, and a per capita health care expenditure of $10,264 per resident. Total health care spending was up $3.9 billion (up 5.8 percent on a per capita basis) over 2021’s level — well in excess of the state’s 3.1 percent benchmark for health care cost growth. CHIA said the 5.8 percent growth rate in 2022 represents the largest one-year jump since measurement began in 2012, aside from the “anomalous spending growth in 2021 driven by the pronounced effects of the pandemic.” Health care spending shot up 9 percent in 2021 after posting a 2.3 percent decline in 2020.
The 2022 growth in health care spending was below both the rate of growth in the Massachusetts economy broadly (7.2 percent) and regional inflation (7.1 percent), CHIA said, but outpaced growth in both national wages and salaries (5.1 percent) and national health care spending measured by the Centers for Medicare & Medicaid Services (4.1 percent). The largest contributors to the 2022 expenditure increases were pharmacy spending and non-claims payments, CHIA said.
Other medical services, which includes long term care and home health services, was the largest component of MassHealth spending, totaling $3.4 billion in 2022. Other medical services spending increased 10.1% overall, but only 0.8% on a PMPM basis. Its important to note that the CHIA report does not specifically mention how much was spent on home health services amongst the “other medical service” category.
MassHealth Proposes Significant Increase to CSN Rates
In February, MassHealth released their proposed rates for CSN services. In summary, MassHealth proposed a 32.4% increase to RN weekday rates, and an 11% increase to LPN rates. They have also added a high-tech rate for members with Trachs/Vents/Central lines, these rates have a $2/unit ($8/hr) add on/UA modifier, as well as increased the rate for the 60-day supervisory visit of CCA services by 32.4% as well. If these rates take effect, we will have realized nearly 100% rate increases to this program since 2017 when HCA’s members and CCM Families teamed together on advocacy efforts. An incredible feat.
HCA provided verbal testimony in favor of the rate increase at a public hearing last week, in addition to submitting written testimony.
Massachusetts Health Care Costs Rose in 2022
The Center for Health Information and Analysis (CHIA), created under a 2012 cost containment law, released its annual report Wednesday examining health care spending trends in 2022. The detailed report covers a year that started with record-high reporting of COVID-19 cases, followed by gradual decline throughout the year.
CHIA’s annual report estimated total health care spending in Massachusetts at $71.7 billion in 2022, and a per capita health care expenditure of $10,264 per resident. Total health care spending was up $3.9 billion (up 5.8 percent on a per capita basis) over 2021’s level — well in excess of the state’s 3.1 percent benchmark for health care cost growth. CHIA said the 5.8 percent growth rate in 2022 represents the largest one-year jump since measurement began in 2012, aside from the “anomalous spending growth in 2021 driven by the pronounced effects of the pandemic.” Health care spending shot up 9 percent in 2021 after posting a 2.3 percent decline in 2020. The 2022 growth in health care spending was below both the rate of growth in the Massachusetts economy broadly (7.2 percent) and regional inflation (7.1 percent), CHIA said, but outpaced growth in both national wages and salaries (5.1 percent) and national health care spending measured by the Centers for Medicare & Medicaid Services (4.1 percent).
Other medical services, which includes long term care and home health services, was the largest component of MassHealth spending, totaling $3.4 billion in 2022. Other medical services spending increased 10.1% overall, but only 0.8% on a PMPM basis. It’s important to note that the CHIA report does not specifically mention how much was spent on home health services amongst the “other medical service” category.