Concord, NH – Proposed federal changes to Medicaid could cost the state up to $493 million annually, creating significant challenges for New Hampshire’s State Budget and its residents’ access to health care, according to an analysis from the New Hampshire Fiscal Policy Institute released today.

The analysis is based on preliminary discussions of potential federal policy changes currently under active consideration, point-in-time expenditure projections from the New Hampshire Department of Health and Human Services,  and calculations from the Center on Budget and Policy Priorities. NHFPI Research Director Phil Sletten estimated the financial impact of proposed federal policy changes by modeling how reductions in federal funding rates would shift additional costs to New Hampshire.

“Medicaid provides access to health services for over 180,000 Granite Staters. The proposed changes could substantially impact access to health care and the financial capacity of our state to fund public services,” said Phil Sletten, NHFPI Research Director. “A reduced federal match rate could lead to the repeal of critical programs, leaving New Hampshire with difficult budget choices in an already challenging fiscal environment.” 

Medicaid is a fiscal partnership between the federal government and states to enhance access to health services for adults and children with low incomes and limited resources, people with long-term care needs, and individuals with disabilities. Nearly half of Medicaid enrollees in New Hampshire are children. The federal government and the state government split the cost of funding eligible services for enrolled Granite Staters.

Key findings from the analysis, Potential Federal Medicaid Policy Changes Could Shift Substantial Costs to States, include: 

• Total Cost Impact: Two key proposed changes to the federal Medicaid funding formula could – if implemented together – increase New Hampshire’s state-level costs by $493 million annually, including reductions to funding for Medicaid Expansion and standard Medicaid programs. 

• Granite Advantage at Risk: The analysis underscores the precarious position of the Granite Advantage Health Care Program, New Hampshire’s Medicaid expansion program. State law mandates the program’s termination if the FMAP drops below 90%, which could leave nearly 60,000 residents without coverage.

• Budgetary Consequences: Only three State departments have appropriations this fiscal year that are larger than the $493 million cost of the combined funding reduction proposals, demonstrating the severe potential strain on state resources.

• Broader Challenges: Proposed funding changes would worsen New Hampshire’s already challenging fiscal environment, with declining revenues, legal settlements, and other rising costs making filling budget gaps difficult. 

“If federal support were substantially reduced, New Hampshire would struggle to maintain current service levels, let alone address additional costs,” Sletten noted. “The state’s capacity to find sufficient savings to offset lost revenue is limited, especially as the state faces declining tax receipts and other budgetary pressures.” 

The report emphasizes that the potential cost increases come at a time of fiscal uncertainty for New Hampshire. State revenues are falling short of previous years’ levels, and policymakers already face rising costs from legal settlements, prison construction, and potential education funding changes. 

“As the state’s largest program in dollar terms, any reduction in federal Medicaid funding could substantially impact the state budget overall and force tough decisions about funding health services, education, and public safety,” Sletten added. 

To read the full analysis, visit https://nhfpi.org/blog/potential-federal-medicaid-policy-changes-could-shift-substantial-costs-to-states/. 

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The New Hampshire Fiscal Policy Institute is an independent, nonprofit, nonpartisan organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals. Learn more at www.nhfpi.org.   

Contact: 
Holly Shulman, New Hampshire Fiscal Policy Institute 
hshulman@nhfpi.org 
603-715-4321