Last night, the Senate Finance Committee voted 4-2 to strike from its budget proposal, language allowing New Hampshire to accept hundreds of millions of dollars in federal funds through its Medicaid program to reduce the number of uninsured Granite Staters. The Committee instead proposed a commission to study “the potential costs and benefits of expanding Medicaid eligibility in New Hampshire.”
The benefits of the Medicaid expansion for New Hampshire are clear. Most directly, it would ensure that hard-working Granite Staters have access to quality health care when they need it most. As the Lewin Group documented in two extensive reports for New Hampshire’s Department of Health and Human Services, by 2020, extending Medicaid to people with incomes below 138 percent of the federal poverty line would mean affordable health care coverage for as many as 58,000 people. What’s more, it would provide an important economic boost to New Hampshire, resulting in as much as $2.5 billion in federal funds flowing into the state’s economy over the next seven years.
The costs of the Medicaid expansion are manageable and can likely be covered in their entirety by savings elsewhere in the budget. That is, based on the Lewin Group’s estimates, with Medicaid care management in place, the cost to New Hampshire for providing health benefits through the expansion would be just $27 million over seven years, but reduced expenditures for health care for state inmates and increased collections from the insurance premium tax would bring the net cost to zero.
Nevertheless, Senate President Peter Bragdon maintains that, by waiting, New Hampshire may be able to learn from other state’s experiences and should take the time to consider the approach Arkansas has taken to the Medicaid expansion.
NHFPI examined Arkansas’ “premium assistance” proposal in an Issue Brief it released earlier this week. As it explains, contingent upon further federal approvals, Arkansas would use federal funds to purchase private health insurance for newly-eligible Medicaid beneficiaries.
The Issue Brief finds that premium assistance may offer a novel approach, but may not be well suited to circumstances here in New Hampshire. For instance, it points out that, since New Hampshire faces some of the highest private market insurance rates in the nation and pays some of the lowest Medicaid reimbursement rates, the Arkansas model could actually be more expensive.