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Roy Proposal: Substantially Higher Costs, Far Less Coverage

September 10, 2013 Common Cents

During today’s meeting of the Commission to Study the Expansion of Medicaid Eligibility, Avik Roy, a Senior Fellow at the New York-based Manhattan Institute, offered one alternative to the approach New Hampshire is now considering for using federal funds to provide health care coverage to low-income Granite Staters.

While the full details of the proposal are not yet available, in general, it would appear to result in substantially higher costs to the state budget, provide fewer New Hampshire residents with health care coverage, and force those covered to incur greater out-of-pocket costs.

More specifically, the Roy proposal would appear to require that New Hampshire spend $46 million out of its own budget each year in order to cover 11,150 low-income residents.  Under the proposal, the state would act as an insurance carrier, contracting directly with physicians and paying them only $100 per month for primary care consultations.  The participants in such a plan would be covered solely for catastrophic events, but only after satisfying a $6,000 deductible.

In contrast, under the version of Medicaid expansion that was included in both the Governor’s and House’s FY14-15 budget plans, New Hampshire would spend a total of roughly $20 million over the next 7 years to cover 58,000 people.  In return, the federal government would pay $2.4 billion to help provide such coverage.  Under this version of Medicaid expansion, participants would face some cost sharing, but never more than $793 per year.

In other words, the alternative proposal presented to the Commission appears to suggest that New Hampshire should:

  • increase its own spending over the next 7 years from $20 million to approximately $320 million;
  • forego $2.4 billion in federal aid that would come into the state’s economy;
  • cover 80 percent fewer people;
  • leave 70 percent of the low-income uninsured without coverage;
  • offer participants bare bones benefits that could expose them to the individual mandate   penalty;
  • offer providers Medicaid reimbursement rates lower than current levels; and,
  • force participants to face cost-sharing requirements that could amount to as much as 40  percent of their gross annual pay.  A deductible of the size included in the Roy proposal may well drive people away from seeking the care they need.

Earlier this year, the Lewin Group found that “the ACA significantly boosts NH’s economy and revenues, and Medicaid expansion maximizes these economic and fiscal impacts.”  At first glance, the Roy proposal seems to fall well short of accomplishing the same result.  NHFPI will provide further analysis of the proposal as more details become available.

 

 

 

 

 

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House Fails to Pass State Budget, Process Moves to Senate

6 Apr 2017

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The New Hampshire House, for the first time in recent history, has opted to not pass the State Budget bills, introduced as House Bill 1 and House Bill 2. April 6 was the deadline set by legislative leadership to pass those bills out of the House and move them to the Senate, a day often referred to as “crossover.” The Senate phase of the budget begins after April 6, and the Senate has expressed an intent to move forward with a budget in the Senate Finance Committee. However, with no House Bill 1 or House Bill 2 crossing over, the Senate has to forge an alternative path to debate and amend the budget.