What Medicaid Expansion Could Mean For New Hampshire Businesses
A top executive with one of New Hampshire's largest healthcare providers told a gathering of businessmen and women that they have a significant stake in how the state cares for low-income and uninsured residents.
At a Business & Industry Association forum at the Grappone Conference Center, Henry Lipman, chief financial officer for LRGHealthcare, said New Hampshire businesses are "bearing the burden" of cuts in Medicaid reimbursement rates and reduced payments to hospitals for uncompensated care.
The cuts have led to higher health insurance costs for New Hampshire employers, Lipman said. He cited a 2012 study by the Agency for Healthcare Research and Quality that found that "cost-shifting" has resulted in the Granite State having some of the highest commercial insurance premiums in the country.
"We're all going to be better off if the business community supports the political community in trying to get us to work together to solve this, because ultimately when we're in conflict the externalities that we're imposing on one another end up being picked up by business," he said.
Gov. Maggie Hassan has said that one way to reduce uncompensated-care costs would be to expand the state's Medicaid program under the federal Affordable Care Act. Hassan, a supporter of Medicaid expansion, says she will appoint a commission to study the issue.
In a report commissioned by the New Hampshire Department of Health and Human Services, the Lewin Group estimated that expansion would add about 58,000 people to the state's Medicaid rolls and reduce the number of uninsured residents from about 170,000 to 71,000.
Lipman was joined on the BIA's panel by three others: Nicholas Toumpas, state health and human services commissioner; Jennifer Patterson, health legal counsel for the New Hampshire Department of Insurance; and Steve Norton, executive director of the New Hampshire Center for Public Policy Studies.
Toumpas suggested expanding Medicaid could be complicated by a federal lawsuit filed in 2010 by 10 New Hampshire hospitals, including LRGHealthcare. The providers say the budget cuts have hurt the ability of Medicaid patients to access care.
The lawsuit has put the brakes on the state's effort to implement managed care for Medicaid recipients. The program was scheduled to start in July 2012, but the hospitals have refused to negotiate contracts with three managed care companies chosen by the state until the lawsuit is resolved.
Toumpas said the dispute has made it impossible for the companies to guarantee a statewide network of providers.
"Until we have that," he said, "there is not the ability for me to provide a 'date certain' in terms of when we move forward with the program."
Norton said the Affordable Care Act would have two significant impacts on New Hampshire business.
Subsidies provided by the ACA would help an estimated 75,000 New Hampshire residents buy private health insurance. That would "fundamentally change the health care system and also to some extent the incentives and disincentives that individuals and businesses have to purchase health insurance coverage," Norton said.
At the same time, he said, expanding Medicaid will likely reduce the number of people who purchase private insurance through their employer. Small businesses tend to have lower-income workers who would be eligible for expanded Medicaid coverage, reducing the burden on small businesses to provide insurance.
Whether expansion would lower premiums in the private insurance market is less clear. Norton said giving more people access to health insurance would reduce providers' uncompensated care costs. However, he noted that the Lewin Group projected the net incomes of hospitals would be greater without expansion.
"Capturing that, in terms of the business premiums and the premiums you pay, is difficult to imagine," he said. "Because that's a negotiation that occurs between the hospitals and the insurance companies."
Norton was more certain that health care reform, including Medicaid expansion, would have a positive impact on New Hampshire's economy. Citing the Lewin Group report, he said the ACA's private provisions would add a "significant chunk of money" to the state - about $2.8 billion compared to $2.3 billion without expansion, according to the Lewin Group.
The winners, Norton said, would be hospitals and insurance companies, who would see a growth in new customers "who are insured and covered and paid for."