Affordable Care Act: Medicaid Expansion

LFDA Editor

In March 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act, a federal statute that marks Congress's chief health care reform legislation.  Most of the Affordable Care Act (also known as "ObamaCare"), including the controversial individual mandate to purchase health insurance, was upheld by the U.S. Supreme Court in June 2012.

While there are many aspects of the Affordable Care Act, there are two major provisions that affect state government.  First, each state must run an online health insurance marketplace (also called an "exchange").  Click here to see the LFDA issue page on the health insurance exchange.  Second, each state had to decide whether to expand eligibility for Medicaid. 

Originally the Affordable Care Act required states to expand Medicaid eligibility starting in 2014, or the federal government would stop matching state contributions to Medicaid.  However, the U.S. Supreme Court ruled that the federal government cannot deny matching funds if a state decides not to expand Medicaid. 

Medicaid Expansion in New Hampshire

As part of a budget compromise in June 2013, the New Hampshire legislature agreed to study a Medicaid expansion over the summer.  On October 8, 2013 that study committee voted in favor of expanding Medicaid.  After three weeks of negotiations, a bipartisan plan broke down and the Republican-controlled Senate killed the expansion. 

On February 6, 2014 a bipartisan group of Senators announced a new Medicaid expansion deal.  The compromise relies on the use of private insurance and was scheduled to expire December 31, 2016.  This new Medicaid compromise, SB 413, passed the House and Senate and was signed by Gov. Hassan March 27, 2014.

Enrollment for expanded Medicaid coverage opened July 1, 2014.  In March 2016 the legislature passed HB 1696, which extends expanded Medicaid eligiblity through December 31, 2018.  The program will cover state costs with revenue from the insurance premium tax, paid by insurance companies.

PROS & CONS

"For" Position

By LFDA Editor

"New Hampshire should continue Medicaid expansion."

  • Expanded Medicaid eligibility should decreas the number of uninsured patients, which in turn reduces how many costs are shifted from uninsured patients to the insured. 
  • "Anytime you put more people into the pool, you maximize your ability to create efficiencies and control costs," explained Ned Helms, former health and human services commissioner. 
  • The federal government will also reimburse states for over 90% of the cost of expanded Medicaid.

"Against" Position

By LFDA Editor

"New Hampshire should roll back Medicaid expansion."

  • Allowing government greater involvement in health care undermines competition in the market, therefore raising costs for everyone. 
  • Federal reimbursement will decrease slowly over time, capping out at 90% in 2020.  
  • With Medicaid being the single largest item in the two-year New Hampshire budget, opponents argue that cash-strapped New Hampshire cannot afford Medicaid expansion.

LEGISLATIVE HISTORY

Killed in the House

Repeals New Hampshire's expanded Medicaid program, called the New Hampshire Health Protection Program (NHHPP).

Tabled in the Senate

Continues expanded Medicaid eligibility, which would otherwise expire December 31, 2018.

Killed in the House

Continues expanded Medicaid eligibility, which would otherwise expire December 31, 2016.

Signed by Governor

Continues expanded Medicaid eligibility, with some revisions. This bill adds work requirements to eligibility for expanded Medicaid. Additional funding is provided by the insurance premium tax, paid by insurance companies.

Tabled in the Senate

Reauthorizes expanded Medicaid eligibility and pays for the program with insurance taxes and money from the Medicaid Enhancement Tax (MET) paid by hospitals.

Killed in the Senate

Requires the joint health care reform oversight committee - which was formed to oversee the implementation of the Affordable Care Act in NH - to provide oversight, policy direction, and recommendations for legislation regarding implementation of managed care and expanded Medicaid eligibility.

Killed in the House

Establishes a single payer health care system to provide health care for the citizens of New Hampshire. The Department of Administrative Service states the bill would provide universal access to health care for all New Hampshire residents and prohibits private health insurance companies from selling health care coverage.

Tabled in the Senate

Renews the expansion of Medicaid eligibility, set to expire December 31, 2016.

Signed by Governor

Expands Medicaid eligibility, using private insurance wherever possible.

Interim Study

Requires hospitals to charge self-pay patients no more than the Medicaid rate for medical services.

Killed in the House

Forbids NH from expanding Medicaid eligibility under the federal Affordable Care Act.

Was NH right to expand Medicaid eligibility, using private insurance wherever possible?

FOR
REPRESENTATIVES

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UNDECIDED
REPRESENTATIVES

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AGAINST
REPRESENTATIVES

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Comments

Mark Fernald
- Peterborough

Mon, 10/14/2013 - 11:47am

Funding Obamacare is not just about money, or regulations, or freedom.  It’s about life.  Consider the story of a woman I will call Alice (not her real name). She came to my office several years ago seeking help processing health insurance claims. Not what you might ordinarily expect a law firm to do, but we dug into the task.

Alice’s husband had left her about four years before, when she was nearly 60. Their divorce agreement obligated her ex-husband to maintain the health insurance coverage that he and Alice had during their marriage, but only during the 36-month period Alice was eligible under federal law.

When I met with Alice, I learned that she was diabetic. Like many with that disease, she had poor circulation, which had led to an infection, and the recent amputation of one of her legs. I also learned that her health insurance had just run out.

I was able to help Alice with her immediate problem — most of her medical bills had been incurred before her health insurance expired, and the claims were eventually paid. But I couldn’t touch her larger problem.

She was a 62-year-old woman with huge medical problems and no health insurance. Because of her pre-existing conditions, no health insurer would sell her a policy at any price. She did not qualify for Medicaid because she was not poor enough. She was three years shy of Medicare eligibility. Another infection was either going to leave her dead, or bankrupt.

I lost touch with Alice. Maybe she reached Medicare age, and the security of health insurance. Maybe she became a statistic — several years ago, a study by Harvard Medical School concluded that 45,000 deaths each year are due to lack of health insurance.

There are countless other Alices who need health care, and they had no hope of affording health insurance in the marketplace that existed before Obamacare.

Today, people like Alice cannot be denied health insurance due to a pre-existing condition. Obamacare swept away all those pre-existing condition clauses.

Starting Jan. 1, 2014, people like Alice will be eligible for help with health insurance premiums, with the amount of assistance depending on the person’s income.

If a person faces a severe medical condition, such as cancer, a life-threatening infection, or heart disease, there are no lifetime limits on health insurance benefits.

The people who want to defund Obamacare are the same people who made Obamacare a central issue in the 2012 campaign. Then the people spoke. The Republicans lost the presidential campaign, lost seats in the House, and lost seats in the Senate. Republicans can’t repeal Obamacare through the legislative process, so they are throwing a tantrum, threatening to shut down the government if they don’t get their way. The Democrats say “we won’t negotiate” — a logical stance, as any concession would only encourage more blackmail.

All the political theater boils down to this: Are we, as a nation, going to help people like Alice obtain affordable healthcare? Now that Obamacare has answered that question, Democrats say there is no going back.

Mark Fernald was the 2002 Democratic nominee for governor. He can be reached at mark@markfernald.com

andrewh's picture
Andrew Hosmer
- Laconia

Tue, 06/04/2013 - 10:07pm

Last week, the New Hampshire Senate Finance Committee rejected expanding Medicaid in New Hampshire and instead opted to delay and study.  This politically motivated decision is fiscally short-sighted and will hurt our healthcare system and our entire economy.

The Medicaid program is a partnership between the federal government and the states. It primarily covers poor children, senior citizens, expecting mothers, and people with disabilities. Today, New Hampshire covers about 132,000 people, and the costs are split 50-50 between the state and the feds.

However, under the Affordable Care Act (ACA), states now have the option to extend Medicaid to working adults with annual incomes up to $15,856. And instead of splitting the costs evenly for this new group, the federal government will pay 100% from 2014-2016, and then after 2020 it will pay 90%.

According to nonpartisan studies from the Lewin Group and New Hampshire Fiscal Policy Institute, the economic impact of this extended coverage is overwhelmingly positive.  It’s estimated that over the next 7 years, New Hampshire will receive $2.5 billion in federal funds, New Hampshire’s hospitals will save $400 million, and the economic spinoff will create upwards of 5,000 jobs and $2.8 billion in gross state product.

And how much will this cost New Hampshire? Zero, once managed care in Medicaid is implemented in the coming year.

So where’s the opposition coming from?  Despite the huge benefits, some have argued that there is still a risk for New Hampshire, since the federal government might somehow renege on its promise.  The history of Medicaid is contrary to this fear, as the federal government has never failed to fully fund Medicaid in more than 45 years.  Also, if they ever do, New Hampshire can pull out at any time.

Others say that it makes financial sense to stop and study for a year.  This is unnecessary as expansion has been studied by nonpartisan groups and their conclusions are quite similar. In fact, delaying a year costs us $340 million, drives up costs for businesses, and leaves tens of thousands of people in New Hampshire without coverage.

Putting politics aside and even beyond the clear economic and fiscal benefits, extending Medicaid coverage is important for our entire healthcare system.  Our current system, with skyrocketing insurance costs, increasing demands for charity care, declining Medicaid reimbursement rates and an inadequate understanding of mental health issues, is broken and in need of immediate, substantive reform.  Expanding Medicaid, regardless of how one feels about the ACA, is an opportunity to address and begin reforming our healthcare system.

Even fiscally conservative governors from across the country, including Chris Christie (R-NJ), Jan Brewer (R-AR), John Kasich (R–OH) and Rick Scott (R-FL), support Medicaid expansion, because it just makes so much sense for their states, and they are willing to look past the short-term politics.  If New Hampshire doesn’t take advantage of expansion, our hard earned tax dollars will go to subsidizing healthcare in these other states.  How ironic that NH’s healthcare system is struggling, yet Granite Staters will be paying for other states’ healthcare.  If this happens, New Hampshire will be 50th out of 50 states in the return of federal tax dollars to the state—the biggest “donor state” in the whole country.

The human cost is also staggering.   Medicaid expansion would cover 58,000 hard-working New Hampshire taxpayers (including 1,500 veterans and 800 of their spouses).  These people are our neighbors, people we see at church, ball games and the grocery store -- people who work multiple jobs trying to keep a roof over their head and food on the table.

When I campaigned for the State senate I remember well how many people told me they were tired of hyper-partisan politics.  I promised that I would remember those conversations and put them into action when elected.  This doesn’t have to be a partisan issue: we have a genuine opportunity to work together as pragmatic problem solvers.  It’s rare that a real, genuine solution is open to us.  Let’s grab it. Let’s put Granite Staters first and do what’s best for our healthcare providers, our business community, our economy and the hard working taxpayers of New Hampshire.

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Issue Status

New Hampshire's expanded Medicaid program is now set to expire December 31, 2018.  With a Republican Congress and president, the federal government may also make changes to the program.  For example, Congress is debating rolling back or capping funding for the program.

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