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The state could save up to $114 million from 2014 to 2020 by not expanding Medicaid under the Affordable Care Act, but state health care providers would lose out on $2.5 billion in federal revenue...
Nov. 16--CONCORD -- The state could save up to $114 million from 2014 to 2020 by not expanding Medicaid under the Affordable Care Act, but state health care providers would lose out on $2.5 billion in federal revenue.
The state would have to find an additional $85 million over those years if Medicaid is expanded, but would get the $2.5 billion, according to a consultant hired by the State Department of Health and Human Services.
On Thursday, Randall Haught, senior director of The Lewin Group, explained the first phase of a study to determine what effect Medicaid expansion would have on the department's budget, the state's economy, health care providers and other state programs.
He laid out the different scenarios available to the state, such as delaying expansion, changing eligibility and changing Medicaid services to capture the most federal dollars.
He said the expansion would add about 58,000 people to the program -- about half of the 113,000 people who would be eligible.
Without expansion, Haught said, 22,000 additional people will go on Medicaid due to penalties and other provisions of the ACA.
States across the country are determining if they want to expand Medicaid eligibility under the ACA after the Supreme Court said the federal government could not force states to increase program eligibility. The act requires eligibility be increased to 138 percent of the federal poverty level. For example, a single adult earning about $15,000 annually would be eligible.
Health and Human Services Commissioner Nickolas Toumpas has said it is up to the governor and the Legislature to decide if the state should expand the program.
In New Hampshire, House Speaker William O'Brien has pushed to block expansion of the program, but with Democrats gaining greater control of state government, expansion is now more likely.
Governor-elect Maggie Hassan said during her campaign that she supported expanding Medicaid. In a statement Thursday, she said the impact of the federal money would help the state's economy.
"I will closely review the findings of today's HHS report, which is an important first analysis of what Medicaid expansion means for our state that will greatly inform the decision-making process moving forward," Hassan said. "But to have a full understanding of the financial impact, we will also need to examine the phases of the report that are still in progress, including an analysis of the benefits to our economy from the influx of federal dollars and the reduction of uninsured emergency room visits."
Much of the savings of not expanding Medicaid comes in the Children's Health Insurance Program because the federal government increases its match to 88 percent under the ACA, Haught said.
Haught did acknowledge his figures do not include reductions in the federal Disproportionate Share Program, which helps hospitals with uncollected bills for care they provide the poor. Under the ACA, the program will be reduced under the assumption more and more people will be insured, with about half the money eliminated by 2020. Currently the state is eligible for $160 million annually under the program.
New Hampshire could see additional savings by moving some current Medicaid recipients into the "new" category, Haught explained.
Under the ACA, the federal government pays 100 percent of the cost of "new" Medicaid recipients from 2014 to 2016; the percentage gradually reduces to 90 percent in 2020 and thereafter.
The report also indicates the state would reap few financial benefits from a Medicaid managed-care program over the first seven years under the ACA. Lawmakers were counting on the change to managed care to save $16 million this fiscal year, although that is unlikely due to the delay in starting the program.
Tom Bunnell, policy analyst for NH Voices for Health, said the additional federal money for providers "would reduce the current pressure for providers and insurance companies to shift uncompensated care costs onto the business community, and onto all of us who pay the cost of private health insurance premiums."
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Garry Rayno may be reached at firstname.lastname@example.org.
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