THE SHRINKING HEALTH COVERAGE GAP

At a NH House hearing in late January, dozens of people bided their time, waiting to speak about what is likely to be one of the biggest issues of this legislative session: Medicaid expansion, also known as the NH Health Protection Program. Supporters, wearing "Vote Yes on HB1696" stickers, lined the ramp heading into the hearing. The bill calls for extending Medicaid expansion through 2020. If no action is taken, the current expansion ends at the end of 2016, leaving about 47,000 currently covered Granite Staters without insurance.

Why the fervor? New Hampshire prides itself on local control and limited government involvement. Opponents of Medicaid expansion argue it possesses the same deficiencies they see in the Affordable Care Act-big government intruding on states-and they claim the expansion will take away incentive for those who are unemployed to seek work. Supporters, which include Republican leaders of the NH Senate, say the plan would use government money but keep the government out of selecting plans as the insurance will be provided through the exchange.

The debate comes down to money. Uncompensated care at NH's urgent care hospitals dropped from $427 million in 2014 to $277 million in 2015 based on NH Hospital Association data. There was a corresponding 27 percent drop in emergency room visits and 23 percent drop in outpatient hospital visits for the uninsured between June 2014 and 2015. Expanded Medicaid was implemented in 2014.

Medicaid expansion is now 100 percent covered by federal funds and will decline to 95 percent in 2017. Under the proposed plan, House Bill 1696, the 5 percent not covered by federal funds in 2017, or about $12 million, will come from insurance premiums and voluntary contributions ffom hospitals and insurers. The bill also has work requirements and incentives for efficient use of health care resources (See sidebar).

Medicaid in its expanded form covers individuals who earn up to 138 percent of the federal poverty level, or $16,240 annually for a single person. Under the proposal, those who make under 100 percent of the federal poverty level receive free services while those between 100 and 138 percent must pay certain fees. Plus, all program participants who are unemployed would be required to meet a work requirement.

The bill passed the NH House and needed House Finance Committee approval as of press time, but passage is expected in the Senate if it makes it there as Senate Majority Leader Jeb Bradley is a sponsor and Senate President Chuck Morse and Gov. Maggie Hassan support it.

The Business Case

Michael Skelton, president and CEO of the Greater Manchester Chamber of Commerce, got his turn to speak three hours into the hearing. He was willing to wait for many reasons. When it came to barriers to business growth, health insurance costs are consistently in the top four issues that businesses cited on a menu of more than a dozen challenges when surveyed by the chamber. And when asked open ended questions, chamber members often raised managing double-digit increases in health care as a concern.

"What are the options if we don't reauthorize? The reality is not a good situation. Those costs would flow back into the premiums paid by businesses and citizens buying insurance," says Skelton, who chose not to speak on the issue in 2014 but has now seen the success of expanded Medicaid. "Uncompensated care is a hidden tax."

Skelton is part of ExpandNH, a coalition of businesses organizations and business leaders supporting the continuation of Medicaid expansion. The Business and Industry Association also supports Medicaid expansion.

At the hearing, Republican Sen. Jeb Bradley, the majority leader, called uncompensated care a "stealth tax," noting that the $427 million was the state's highest tax. Next in line is the Business Profits Tax, which was $340.9 million for the fiscal year ending June 2015. Under this definition, the drop to $277 million still puts it second between the Business Profits and the Business Enterprise Tax.

The expectation is that costs for uncompensated care will keep going down. "As people get the coverage they need, those costs will continue to decline, and that is a benefit to everyone because the costs will not be passed on," says Jeff McLynch, executive director of the NH Fiscal Policy Institute in Concord. "Now, over 30 states have some form of Medicaid expansion. New Hampshire has taken a very New Hampshire approach, if you will. Along with a handful of other states, instead of expanding traditional Medicaid, what it has done is use federal funds to purchase private insurance through the exchange."

McLynch adds that the bill extends the program through 2020 but makes the extension contingent on allowing NH to offer Medicaid expansion through the exchange using private insurers. And he says since the expansion took effect in 2014, the number of people on the NH Health Protection Program was "considerably higher" than the current 47,000, suggesting people are increasing their income, getting back to work and leaving the program.

Deciphering the Uninsured

Supporters of Medicaid expansion point to the many groups of people who have benefitted from the expansion including individuals between 100 and 138 percent of poverty level and people with substance abuse issues who previously had no coverage to get treated.

But the problem is not solved. New Hampshire's uninsured numbers dropped from 140,000 (or 11 percent of the population) in 2013 to 94,000 (or 7 percent of the population in 2015).

A Kaiser Family Foundation report finds that 39 percent of NH's uninsured are eligible for Medicaid and 18 percent are eligible for a tax credit on the health care exchange. The remaining 40,420 uninsured fall into one of three categories: They make too much to receive any subsidies, they could get insurance from their employer but decline it or they are undocumented immigrants.

Data was not available on how these numbers break down, but a national poll of the uninsured by Kaiser in January found the following: Seven in 10 people did not try to figure out if they qualified for Medicaid or a subsidy on the exchange in their state, only one in 100 knew the penalty for being uninsured in 2016 was going up to $695 or 2.5 percent of household income, and two-thirds said they were not contacted about signing up for coverage. Furthermore the survey found that 31 percent of the uninsured do not plan to get insurance.

"I serve as a volunteer for my local hospital. I learned first hand how it benefitted my community," says Rep. Joe Lachance, R-Manchester, the prime sponsor of the bill. "There are thousands from Manchester and surrounding communities who have access to heath care services who didn't before. If there is a way to continue the program without impacting the taxpayer, I want to be part of that debate."