Medicaid Expansion

Citizens Count Editor

In 2010 President Barack Obama signed into law the Patient Protection and Affordable Care Act, also called “Obamacare.”  Part of that law allows states to expand eligibility for Medicaid, a program that gives states federal dollars to cover most of the cost of providing health insurance to low income individuals and individuals with disabilities.

Eligibility for expanded Medicaid in NH

Medicaid is a government-run health insurance program intended to help low income individuals, senior citizens, and individuals with disabilities pay for health care.  There are different types of Medicaid rules for who is eligible depending on income, age, and disability. 

New Hampshire’s expanded Medicaid program – called the New Hampshire Health Protection Program (NHHPP) – gives financial assistance to adults earning up to 138% of the federal poverty level who aren’t otherwise eligible for standard Medicaid programs.  That financial assistance pays for them to purchase private insurance, either through an employer or through the online health insurance exchange.

In 2017, an individual earning up to $16,243 a year or a family of four earning up to $33,465 would be eligible for the NHHPP.

Visit the New Hampshire Department of Health and Human Services website to learn more about eligibility. 

At the end of July 2017, about 52,000 New Hampshire residents had insurance through the NHHPP. In comparison, about 132,000 residents were enrolled in standard Medicaid. 

Why NH’s program is unique

After almost a year of negotiations, New Hampshire passed SB 413 to expand Medicaid eligibility in New Hampshire starting July 1, 2014. 

Rather than simply allowing more individuals to enroll in standard Medicaid, New Hampshire’s program subsidizes private insurance for low income individuals.  A combination of federal and state money covers the cost of premiums, but enrollees are responsible for copays. 

Most other states that expanded Medicaid eligibility under the Affordable Care Act simply expanded their standard Medicaid rolls.  Only five other states – Arkansas, Indiana, Iowa, Michigan, and Montana – created a special expanded Medicaid program, like New Hampshire’s.

The NHHPP was originally set to expire in December 31, 2016.  In March 2016 the Legislature passed HB 1696, which extends the program through December 31, 2018.

Funding for expanded Medicaid in NH

Under the Affordable Care Act, the federal government covered 100% of the costs for expanded Medicaid eligibility through 2016.  That reimbursement decreases over time, dropping to 90% in 2020.

When the New Hampshire Legislature extended the NHHPP in 2016, federal funding was set to drop to 95%.  To cover that difference, the Legislature drew on two funding sources: an existing tax on insurance premiums, and voluntary donations from health care providers, which are placed into a blind trust.

The insurance premium tax is a tax on all the policy, membership, and other fees insurance companies charge customers.  Any insurance premium tax paid for customers enrolled in the NHHPP is used to fund the program.

Hospitals and other health care providers donate money to fund the NHHPP through a charitable foundation.  Providers are willing to donate to support the NHHPP because it results in fewer individuals seeking treatment without insurance, which is expensive for hospitals.

If there are ever not enough voluntary donations to cover the costs of the NHHPP, state law requires the Department of Health and Human Services to terminate the program.

In 2016 New Hampshire also added some small copayments for residents enrolled in the program who are over 100% of the federal poverty level.

New Hampshire’s cost to fund the NHHPP over 2017 and 2018 is estimated around $51 million total.

Challenges for expanded Medicaid in NH

Objections to funding sources

In August 2017 the Centers for Medicare and Medicaid Services published a letter to New Hampshire officials stating that it is against federal law to use voluntary provider donations to fund a Medicaid program. 

Federal law specifically outlaws any relationship between a donation from a health care provider and payments that provider receives from Medicaid.  Without this law, it would be possible for providers to more or less get “kickbacks” of federal Medicaid dollars in exchange for making private donations.

According to the New Hampshire Department of Health and Human Services, there is no relationship between how much a provider donates and how much that provider gets in Medicaid payments.  The donations are managed by a charitable foundation, and so state officials have no knowledge of which hospitals donate or how much they donate.

The Centers for Medicare and Medicaid Services says there is a relationship because state law requires New Hampshire to terminate its expanded Medicaid program if providers do not donate enough money to cover costs.

The federal government said New Hampshire legislators must devise a new way to fund the NHHPP if the state continues the program past December 31, 2018.

Work requirements

When the New Hampshire Legislature reauthorized expanded Medicaid in 2016, they included a requirement for participants to work or attend school at least 20 hours per week.  The Obama administration rejected these work requirements, but the state Department of Health and Human Services is asking the Trump administration to reconsider. 

Supporters argue that work requirements ensure the state is not providing welfare to able-bodied adults who should be able to support themselves.

Opponents argue that most participants in expanded Medicaid are already working or seeking work, and the requirements would just add burdensome and expensive bureaucracy.

Other changes at the federal level

Thus far President Donald Trump and the Republican-controlled Congress have not passed a bill to revise the Affordable Care Act. However, Republicans still want to try to change Medicaid into a block grant program. 

Under a block grant program, each state would get a set amount of money for Medicaid from the federal government.  Each state could decide how to spend that money, including who would be eligible for Medicaid benefits. This is different than the current system, which gives states only some flexibility to manage Medicaid, and matches state spending on Medicaid no matter what the final dollar amount is.

A block grant would probably decrease federal Medicaid funding overall in New Hampshire.  So far legislators have opposed drawing on any more New Hampshire tax dollars to fund Medicaid, so a federal block grant might mean the end of expanded Medicaid eligibility in the Granite State.

 

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PROS & CONS

"For" Position

By Citizens Count Editor

“New Hampshire was right to expand Medicaid eligibility, using private insurance wherever possible.”

  • Expanded Medicaid eligibility covers the many individuals who are not poor enough to qualify for standard Medicaid but who cannot afford private insurance.  If New Hampshire ends its expanded Medicaid program, those roughly 50,000 citizens would be left without an affordable option for health insurance and without the money to pay for care out of pocket. It is unethical to deprive low income residents of access to affordable health care. 
  • Thus far New Hampshire has been able to fund the NHHPP without raising any taxes.
  • At the end of 2016, roughly 4,000 New Hampshire residents paid for drug addiction treatment through the NHHPP. In the middle of a drug addiction crisis, it is critical that New Hampshire continues the NHHPP to ensure that residents have access to these treatment services.
  • According to a 2017 literature review in the New England Journal of Medicine, “coverage expansions significantly increase patients’ access to care and use of preventive care, primary care, chronic illness treatment, medications, and surgery. These increases appear to produce significant, multifaceted, and nuanced benefits to health.” The same report concluded that these positive health outcomes will ultimately save taxpayers money in the long run by lowering the costs to treat unhealthy citizens without insurance.

"Against" Position

By Citizens Count Editor

“New Hampshire was wrong to expand Medicaid eligibility, using private insurance wherever possible.”

  • So far the Legislature has been able to fund the NHHPP without raising any taxes, but the federal government says New Hampshire must change its funding scheme by the end of 2018 or risk losing federal support.  With a Republican President and Congress, it is also likely that there will be some changes to federal funding for expanded Medicaid, leaving states with a bigger price tag for the program.  Even if the Affordable Care Act stays in place, federal funding for expanded Medicaid will decrease in the next few years.  All of these factors suggest lawmakers will need more money from taxpayers to fund expanded Medicaid eligibility in the coming years.
  • Unlike citizens who are eligible for standard Medicaid, citizens eligible for the NHHPP are able-bodied adults who should be able to find full-time employment that provides health insurance.  So far the federal government has rejected New Hampshire’s attempts to add work requirements to eligibility for the NHHPP.  The NHHPP therefore creates an incentive for participants to stay under- or unemployed so they continue to qualify for insurance.
  • While studies may show that increased insurance coverage leads to increased access to care, that increased access comes with a price tag.  For example, a landmark study from academics at Harvard and MIT found that expanded Medicaid programs are likely to increase emergency room visits, which are very expensive. Advocates of expanded Medicaid argue that over time participants will get healthier, leading to fewer hospital visits. However, these expanded Medicaid programs are still too young to conclude if participants will go to the doctor less frequently over time.  It is possible that access to cheap care will even enable participants to go to the hospital when they do not really need to.
  • The health costs for Medicaid expansion enrollees are higher than costs for other individuals who purchase health insurance. This may be because New Hampshire opted to enroll expanded Medicaid patients in a plan with very low copays. Those low copays might entice Medicaid expansion patients to visit the doctor more frequently than they really need to.

 

LEGISLATIVE HISTORY

Killed in the House

Changes the notification deadline if federal funding for expanded Medicaid falls below a certain level, from "immediately" to "on or before June 15, 2018."

Interim Study

Extends New Hampshire's expanded Medicaid program; requires work requirements for expanded Medicaid to match those for Temporary Assistance for Needy Families; requires the Department of Health and Human Services to establish a procedure to handle "medically complex" enrollees in expanded Medicaid; eliminates the voluntary hospital donations to fund expanded Medicaid; and allows state general funds to be spent on expanded Medicaid.

Killed in the House

Requires the Department of Health and Human Services to seek a federal waiver reducing eligibility for expanded Medicaid coverage from 138% to 100% of the federal poverty level.

Interim Study

Requires insurance policies issued under New Hampshire's expanded Medicaid program to be kept in a separate pool from private individual health insurance policies. According to the Insurance Department, it is likely that this would result in higher premiums for expanded Medicaid participants - which are paid for by the state - and lower premiums for individuals who buy insurance on the Health Insurance Marketplace.

Signed by Governor

Continues New Hampshire's expanded Medicaid program. This bill makes several significant changes to the program. First, it moves participants off private insurance and into managed care, similar to traditional Medicaid enrollees. Second, it adds a work requirement for participants. Third, it removes funding from voluntary contributions by health care providers, which the federal government said is illegal. Instead, bill sponsors say the program will use revenue from alcohol sales to fund the program.  SB 313 also establishes the Granite Workforce program, which will use some federal welfare funding to establish a program that will help place low income individuals in jobs in areas with workforce shortages.  

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.

Tabled in the Senate

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

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.

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?

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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

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

Gov. Sununu signed a 2018 bill to continue expanded Medicaid eligibility. The bill, SB 313, makes several notable changes to the program. 

Read more about SB 313 and how it will change expanded Medicaid

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