Valerie Acres, Sheehan Phinney Capitol Group

One of the major policy issues facing our new governor and legislature is whether to expand the state's Medicaid program to include all adults up to 138 percent of the Federal Poverty Level.

The Affordable Care Act originally required states to do this; however, the United States Supreme Court made expansion optional. This decision will impact New Hampshire's business community. Business owners who provide employee health coverage are well aware that the difference between the cost of services delivered in the Medicaid program and the reimbursement rates paid by the state to healthcare providers is largely shifted to the private market through inflated insurance premiums. So, it would seem that adding more people to this group is a bad thing. But the analysis is not that simple. 

A number of factors come into play. For example, many employers (including the state itself, by the way) have employees who are under 138% of FPL and who, therefore, could be shifted from employer-subsidized coverage to Medicaid if the state opts in to expansion. The federal government will pay an enhanced match for certain services delivered under an expansion scenario thereby mitigating the cost delta that is currently shifted to the private market. And so on. The Department of Health and Human Services expert on Medicaid expansion, Lisabritt Solsky, stated it well when she said the question is not simply whether to expand Medicaid but whether to expand, under what model, and when.

To help policymakers balance the myriad of factors they should consider when deciding about Medicaid expansion, the Department of Health and Human Services hired The Lewin Group to conduct an in-depth analysis based on in-state data. Phase I of the study focused on the impact of various decisions and factors on the Department itself, and Phase II focused on the impact of those decisions and factors on other state programs, the uninsured population, healthcare providers, the state's economy in general, and the commercial insurance market. Both reports are available online at http://www.dhhs.nh.gov/ombp/publications.htm#doc.

Right now it is difficult to gauge whether New Hampshire will opt in or out of Medicaid expansion. Many advocacy groups for consumers, healthcare providers and others support opting in. Governor Hassan issued a press release that states:

"The independent report by the Lewin Group has made it clear that moving forward with Medicaid expansion under the Affordable Care Act will inject more than $2.5 billion in federal dollars into our state, create an estimated 700 jobs, and save Granite Staters more than $92 million - all while helping working families afford critical health coverage.

"By reducing the amount of uncompensated care at our hospitals, the average New Hampshire household will save an estimated $145 per year, a critical boost during these uncertain economic times.

"This is an important opportunity to help families and strengthen our economy. I look forward to continuing the dialogue with HHS, legislators, businesses and health care leaders to examine how we can best improve health coverage and reduce costs for New Hampshire families while making sure the state is protected financially into the future."

Former Speaker of the House William O'Brien has sponsored a bill to prohibit the state from pursuing expansion. The bill will be heard before the House Health, Human Services and Elderly Affairs Committee on February 5 and this will be a good place to get a sense of the direction in which the Legislature will head on this issue. More to come on this for sure.