Published DateLast year the Supreme Court ruled that the federal Affordable Care Act (ACA) could not mandate that states expand their Medicaid programs. Should New Hampshire expand its Medicaid program? The answer to this question will be a major policy decision for lawmakers.
To answer this question, lawmakers created the Medicaid Expansion Study Commission which will spend the next 3 1/2 months studying this issue. It is instructive to note that in at least three situations where Medicaid was expanded in New Hampshire in the past (1989, 1992, and 1994) in each case, there was a five-month deliberative process (SB-195, SB-319, SB-774 respectively). This commission will begin meeting in early July and make a report of findings and recommendations for proposed legislation on or before October 15, 2013.
So what is Medicaid and how does it work?
Medicaid (Title XIX of the Social Security Act) is a state and federal entitlement program that pays for medical assistance for certain individuals and families with low incomes. This program became law in 1965 as a cooperative venture jointly funded by federal and state governments to assist states in providing medical assistance to eligible needy persons. Medicaid is the largest source of funding for medical and health-related services for America's poorest people.
Medicaid is very comprehensive with little to no cost to the beneficiary for services. Coverage is similar to private insurance with much less exposure to the beneficiary. There are a number of providers who do not accept Medicaid so choices are more limited. According to staff at the N.H. Department of Health & Human Services (NHDHHS), a completed Medicaid application takes 30 days to be processed and individuals receive an ID card within 7-10 business days. The ID card can be used like an insurance card with very few limitations. There are no limits on primary care, hospitals, or the number of emergency room visits. Coverage is effective immediately and allows for a 90-day retroactive period where claimants can submit bills to be paid.
In New Hampshire, Medicaid is the state's largest and most expensive program, costing $1.4 billion a year and accounting for 27 percent of general fund spending. (According to the latest annual report —2008 — listed on the NHDHHS website, more than 147,000 citizens received Medicaid.) It is estimated that approximately 58,000 additional New Hampshire citizens will benefit if we accept the $2.5 billion in federal funds to expand Medicaid.
The bipartisan commission proposed by the Senate Finance Committee and signed into law by Governor Hassanwill have the time and resources necessary to study what expansion will mean for the state. Some issues to consider:
Over the next seven years, expanded Medicaid could have a net cost to N.H. taxpayers of up to $200 million. (Once the federal match drops to 90 percent after three years, state costs will be upwards of $50 million annually.) How will taxpayers fund this $50 million expenditure?
Using the federal funding estimates put forward by expansion proponents, it appears that federal and state government will be spending nearly $15,000 per new enrollee under expansion. At this cost, new enrollees would be on health insurance plans classified as "Cadillac" by the ACA — plans that are now subject to increased taxes. Will the new enrollees be able to pay the increased taxes or will someone else be responsible?
Given the state's already low Medicaid reimbursement rates, some providers have stopped accepting new Medicaid patients. Providers have been unable to guarantee they would have the ability to take on the thousands of new patients expected to seek care under the expanded program. Will there be enough providers to offer health care services with this new population?
According to the New Hampshire Center for Public Policy Studies, with the increase of Medicaid coverage up to 138 percent of poverty*, 34,000 people with existing private insurance will now become eligible for Medicaid. Will they drop their private insurance to go onto Medicaid?
A recent paper by the New Hampshire Center for Public Policy Studies proposes several expansion models to cover various segments of New Hampshire's uninsured population — each of which would have different costs and implications. To date, none of these additional options have been explored; despite the study showing that the one-size-fits-all proposal offered by the Governor is not the most cost effective for the state. Shouldn't these options be reviewed?
On issues of both cost and effectiveness, it is not clear that the one-size-fits-all Medicaid Expansion is the right path for New Hampshire taxpayers, patients or providers. It would seem only prudent that this commission hear from the experts, study this issue carefully, learn about the pros and cons of this entitlement, and assure that we have a plan that will be successful for our state.
(*2013 Poverty Guidelines: 100 percent poverty for a family of four is $23,550; 138 percent of poverty for a family of four is $32,499; Source: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Eligibility/Downloads/2013-Federal-Poverty-level-charts.pdf)
(Republican Jeanie Forrester of Meredith represents District 2 in the New Hampshire State Senate.)