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February 25. 2014 5:27PM

Charles Arlinghaus: A real compromise is still possible


 

Some supporters of the Senate Medicaid Expansion Plan would have you believe the only two choices are their non-compromise and just saying no. As is typical, the reality is far more complicated.
Most conservative opponents of the Senate plan are more than willing to support a real compromise and have a more detailed knowledge of the plan and therefore its flaws than the public statements of some sponsors indicate they do.

A more detailed knowledge of the program suggests how and where compromise really is possible. The most obvious place is in the area of waivers. Senate Medicaid Expansion is best thought of as adopting the same program the governor proposed but for a two year "bridge period" with the hope of changing it if the federal government grants us permission.

Sponsors of the program have claimed they can't support the governor's proposed expansion but can support the program the federal government may or may not approve.

Most conservatives believe that starting a program before the waiver is approved eliminates any real negotiating power with the federal government and therefore locks us into a program that will always be reauthorized even if it technically sunsets. Politically, no significant social benefit program can be reversed.

Supporters are confident their program will be approved. But remember that we are asking the feds to pay New Hampshire 100 percent of the costs of our program forever and ever while offering 49 other states only 90 percent (see section XXV-c). I'm all in favor of asking for anything, but the feds have already turned down this request and can not realistically ever approve such disparate treatment.

Knowing that, we know with as much certainty as we can in a situation like this that the waiver will not be approved. So we are adopting the governor's preferred expansion with no real concessions to conservatives about who is covered, the total size of Medicaid in the state, or how the benefits are administered.

In two years, the Legislature will be asked to reauthorize a program that is providing health benefits to between 50,000 and 80,000 people. We will be told they tried to do something better and couldn't but now we have no choice.

Why would it not be better to ask for the waiver up front? The plan is essentially a replication of Iowa's. Iowa did not expand until the waiver was received. If the federal government had rejected any important component, Iowa would not have proceeded. That is clearly a stronger negotiating position than adopting something the federal government prefers and then hoping they'll give us permission to make changes they hate.

Time is not that big an issue here. Iowa's waiver took seven months from the bill's passage even though they had to write a waiver from scratch with no examples to follow and the federal government had to rule on something they hadn't seen before. In our case, we're merely piggy-backing, and the feds have seen and ruled on every component of what we want. Further, it is a poorly kept secret that the administration has been having informal conversations with the Feds for months.

The second obvious area of compromise is in enrollment numbers. At this point in history, virtually everyone agrees that there ought to be a safety net. Most of us are willing to see Medicaid changed into a program with income based targeting of the benefit instead of categorical targeting. But the Senate Medicaid Expansion will increase the number of our citizens under Medicaid-funded social welfare programs from 135,000 to, by my estimate, 217,000 — a 50 percent, $350 million increase in the program's size.

Would it not be reasonable to target the resources to the poorest 135,000 people? The governor showed us the way with her treatment of the breast cancer eligibility. Everyone in that program over 138 percent of federal poverty would receive the sliding scale subsidy offered by the exchange while those below would remain Medicaid eligible. If this same principle were applied to other populations it would alleviate much of the conservative concern about an enormous expansion of a dependency culture.

Almost no conservative of any variety would have any quibble with a decision to cover the same number of people but target that coverage to the lowest income levels.

A real compromise is still possible and desirable. But it has to acknowledge at the start that the current proposal is mistaken in not asking for waivers up front, in not endorsing any cost sharing measures, and in not redirecting resources instead of just expanding. While any conservative could support real compromise, no conservative of any shade or stripe can embrace the lack of compromise called Senate Medicaid Expansion.

Charles M. Arlinghaus is president of the Josiah Bartlett Center, a free-market think tank in Concord.


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