Report: N.H. Medicaid Expansion Patients Younger, Costlier Than the Rest of Individual Market

Aug 28, 2017

A new report commissioned by the New Hampshire Insurance Department shows that the people covered by New Hampshire's expanded Medicaid program are younger — but also more expensive — than expected. That’s raising new questions for lawmakers to consider as they grapple with how the program should continue beyond its current expiration date at the end of 2018.

The report, produced by Gorman Actuarial, looked only at data for 2016 — and so, author Bela Gorman said, its findings could change amid lots of other changing factors in the insurance landscape. (Gorman presented the findings to the Commission to Evaluate the Effectiveness and Future of the Premium Assistance Program on Monday afternoon. The full report is available here.)

Those covered through the Premium Assistance Program, or expanded Medicaid, made up 42 percent of the individual market in 2016. During that time, Gorman told the panel, the big-picture takeaway based on an initial look at the expanded Medicaid population: “They are younger, they’re enrolled in more comprehensive plans, they have higher risk scores, and there are greater claims costs” than the rest of the individual insurance market.

More than a third of patients covered through New Hampshire's Medicaid expansion were between the ages of 19 and 29, according to the report, compared to just 14 percent of those receiving other kinds of coverage on the individual market.

Because of that, Gorman said, one would expect costs to be lower among the expanded Medicaid population — but analysts found the opposite. Overall, the average expanded Medicaid patient’s costs were found to be 26 percent higher than those outside the program.

It’s not entirely clear what’s driving the higher costs, Gorman said, but there are a lot of factors that could be at play. The Medicaid expansion patients are enrolled in platinum-level plans with lower cost-sharing — which could lead people to seek out more medical services, because there are fewer financial hurdles.

The fact that people can enroll in expanded Medicaid on a rolling basis could also be a factor, because someone might seek out coverage in the aftermath of a costly health emergency. Gorman also noted that the ongoing opioid crisis could also play a role, because of the large number of people seeking behavioral health and other substance abuse treatment services.

More study is needed to fully understand the costs and demographic trends of the program, Gorman said. Lawmakers briefed by Gorman on Monday asked for further analysis comparing the expanded Medicaid population to other subgroups within the state’s insurance market.

Gorman Actuarial is also planning to release another report in September examining broader changes in New Hampshire’s insurance landscape, including changes in carriers and possible changes in federal regulation.

Meanwhile, a state panel will spend the next month digging into this and other data on how the program is working, and will report back on what the program should look like, if it’s reauthorized again next year.

Senate Majority Leader Jeb Bradley says his first priority is figuring out what the program should look like — and then, later, how to pay for it.

“That’s the last thing to be discussed — not the first thing,” Bradley said Monday, when asked about future financing of the program. “I think we need to agree on the model, is it going to be a current model, or is it going to be something that looks more like managed care? Once we’ve ascertained that, then I think the cost discussion happens then.”

Last month, the federal government warned New Hampshire that its current plan, which funds expansion in part through hospital donations, could be illegal. The state has until the end of 2018 to come up with a new plan, or risk losing federal funding. That deadline is also when the existing program is set to sunset without further action from the Legislature.

The Commission to Evaluate the Effectiveness and Future of the Premium Assistance Program plans to meet again at 1 p.m. on Sept. 6.