FAQ: New Hampshire Looks At Expanding Medicaid

Jul 24, 2012

Q. What does the state have to decide in terms of Medicaid expansion?

A. The Supreme Court decision upholding the Affordable Care Act gives states the choice to either maintain their current Medicaid program or extend it to more low-income residents. In states that choose to expand, adults who bring home less than $15,000 a year and a family of four who earns less than $30,000 a year will qualify. In New Hampshire, expansion would add about 56,000 people to the state's rolls, according to the Kaiser Family Foundation.

Q. What's the argument against the expansion?

A. The cost. In New Hampshire, Medicaid expansion would cost about $1.2 billion. The federal government has promised to pay the full cost from 2014 until 2016, when the states will be required to start paying their share. New Hampshire's costs to expand are estimated to be about $63 million, or about 5 percent. But some lawmakers are skeptical of the federal government's commitment to the expansion, given the federal budget deficit, and they fear the states will ultimately have to foot more of the bill.

Q. What are the benefits of an expansion?

A. In addition to providing more low-income people with health insurance, it would lower uncompensated care costs for hospitals. Right now, hospitals lose about $300 million treating Medicaid patients and the uninsured. Most of that is recovered through a program called disproportionate-share hospitals, or DSH, which is funded through a combination of state and federal revenues.

Q. DSH is important to New Hampshire's decision to expand Medicaid. Why?

A. Because the legislature withheld $250 million in state and federal DSH revenues in the 2011-2013 budget to use for other purposes. That eliminated uncompensated-care reimbursement for half of New Hampshire's 26 hospitals. The other 13 hospitals — smaller, mostly rural facilities known as critical-access hospitals — received about 25 percent less in DSH than they spent to treat Medicaid patients and the uninsured. Under the Affordable Care Act, federal DSH allotments to states will be sharply reduced or eliminated in 2014. The idea is that more people will have health insurance, so fewer health care costs will go unpaid for. But because of the way the state has used the DSH payments to balance the budget, the state will have yet another budget hole to fill when the program goes away. Expanding Medicaid would make that task a little easier.

Q. Do the hospitals have the most to gain from a Medicaid expansion?

A. Financially, yes. To cite just one example, Dartmouth-Hitchcock, the state's largest provider lost $107 million on uncompensated care last year. Officials there and at other hospitals predict no end in sight to those kinds of losses under the state's current Medicaid policies. But they also point out that at least some of the cost of treating the uninsured is passed on in the form of higher private insurance premiums. And they say opting out of the expansion would hurt New Hampshire's health care system for the poor, which is already underfunded because of the legislative cuts.

Q. The Joint Health Care Reform Oversight Committee is likely to take up the expansion when they meet Wednesday. What role will politics play in the discussion?

A. Politics will likely be a significant factor in the debate, especially with an election coming up in November. While the Democratic candidates for governor have said they support the Affordable Care Act, including the expansion, the two Republican candidates have come out firmly against the entire law. The state's Republican majority is opposed as well. The legislature already rejected one provision of health care reform, blocking the creation of a health insurance exchange. And earlier this month, House Speaker Bill O'Brien removed the only Democrat on the Joint Health Care Reform Oversight Committee, meaning at least that part of the debate will be dominated by Republicans.