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Medicaid expansion in NH to be decided in next few months

State House Bureau

January 09. 2013 11:57PM

CONCORD - Lawmakers will have to decide in the next few months whether to expand Medicaid coverage to more state residents under the Affordable Care Act.

Tom Bunnell, a University of New Hampshire Law School professor and consultant for NH Voices for Health, briefed members of the House Health, Human Services and Elderly Affairs Committee Wednesday about the federal health care reform act.

Bunnell focused on the expansion of the state's Medicaid program to all adults earning 138 percent of the federal poverty level or less. States have the option of expanding their Medicaid programs with some states already opting out.

"For New Hampshire's budget, it's an interesting proposition all of you will be asked to think about over the next few months," Bunnell said.

In New Hampshire, about 58,000 people are expected to become eligible under an expansion, bringing $2.5 billion in federal money to health care providers over seven years and costing the state about $85 million, according to a report done for the state Department of Health and Human Services by the Lewin Group.

During the first three years, the federal government will pay 100 percent of the cost for new recipients and then the percentage will decrease incrementally to 90 percent by the seventh year.

Under some scenarios, the state may be able to reduce its cost to zero, Bunnell said, if the state's 50 percent share of the costs of several exiting programs can be decreased and federal money covers 100 percent.

Expanding Medicaid will not only provide health insurance to 58,000 state residents, he said, it should also reduce the amount of care hospitals provide the poor for free, which in turn should reduce the cost shifting that drives up premiums for businesses and organizations providing employee health insurance.

If Medicaid is not expanded, Bunnell said, it is likely providers will continue to shift costs to those who do pay and that will send premiums higher.

He did note the state reimburses providers at the low end of the scale compared to other states for its Medicaid patients and another section of the ACA helps the state address that issue.

For the next two calendar years, the federal government will pay the difference between a state's Medicaid reimbursement rate for primary care services and the higher Medicare rate.

Health and Human Services officials are preparing to amend the state's Medicaid plan to take advantage of the federal money to increase the payments for primary care services, Bunnell said.

However, the program is only for two years, and the state's next biennial budget is in place six months longer. Budget writers are now looking at what the state's obligation would be for those six months, he noted.

Bunnell also told committee members that, while it is too late for the state to run its own health insurance exchange to allow small businesses and individuals to compare policies and prices, it is not late for the state to partner with the federal government in establishing a state exchange.

But he noted, the state has to have "a blueprint" to federal officials by Feb. 15 to form a partnership.

The last Legislature prohibited the state from running its own exchange, but Bunnell noted a bill has been introduced to repeal that law.

Bunnell told committee members that the second phase of a study by the Lewin Group for the Department of Health and Human Services on the effects of expanding Medicaid under the ACA will be released Friday and should provide additional details for lawmakers to consider.

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