In 2010 President Barack Obama signed into law the Patient Protection and Affordable Care Act, also called “Obamacare.” Part of that law allows states to expand eligibility for Medicaid, a program that gives states federal dollars to cover much of the cost of providing health insurance to low income individuals and individuals with disabilities.
Medicaid is a government-run health insurance program intended to help low income individuals, senior citizens, and individuals with disabilities pay for health care. There are different types of Medicaid rules for who is eligible depending on income, age, and disability.
New Hampshire’s expanded Medicaid program is called the Granite Advantage Health Care Program (formerly the New Hampshire Health Protection Program).
Eligibility for expanded Medicaid in NH
Granite Advantage allows adults earning up to 138% of the federal poverty level to get coverage through one of the state's Medicaid managed care plans - New Hampshire Healthy Families or Well Sense Health Plan. In 2019, an individual earning up to $1,346 a month or a family of four earning up to $2,782 would be eligible for expanded Medicaid.
New Hampshire added a work requirement to its expanded Medicaid program in 2019. However, before the program went into effect, a federal judge blocked it.
At the end of January 2019, about 52,000 New Hampshire residents had insurance through Granite Advantage. In comparison, about 129,000 residents were enrolled in standard Medicaid.
A unique approach to expanded Medicaid
After almost a year of negotiations, New Hampshire passed SB 413 to expand Medicaid eligibility in New Hampshire starting July 1, 2014.
Rather than simply allowing more individuals to enroll in standard Medicaid, New Hampshire’s program — the New Hampshire Health Protection Program — subsidized private insurance for low income individuals. A combination of federal and state money covered the cost of premiums, but enrollees were responsible for copays.
Most other states that expanded Medicaid eligibility under the Affordable Care Act simply expanded their standard Medicaid rolls. Only five other states — Arkansas, Indiana, Iowa, Michigan, and Montana — created a special expanded Medicaid program, like New Hampshire’s.
The New Hampshire Health Protection Program ran through to the end of 2018. At that point, it was replaced by the Granite Advantage program, which dropped the private insurance factor and instead covered participants through one of the state's standard Medicaid plans.
Funding for expanded Medicaid in NH
Under the Affordable Care Act, the federal government covered 100% of the costs for expanded Medicaid eligibility through 2016. That reimbursement now decreases over time, dropping to 90% in 2020, where it is set to hold.
New Hampshire draws on a number of different funding sources to pay its share of expanded Medicaid costs. These include:
- Taxes on insurance premiums paid for customers who are enrolled in the program;
- A portion of liquor commission profits (these are designated to pay for substance abuse treatment or behavioral health services);
- Fees paid by health insurance companies (these are based on the number of expanded Medicaid enrollees who would have previously been considered part of the state's high-risk pool);
- Additional gifts or donations.
If those funds aren't enough to cover the state's cost, the state can take money from the liquor commission fund to make up the difference. If costs exceed what the liquor commission fund has available, the program is to be terminated.
New Hampshire's share of expanded Medicaid costs is projected to be somewhere between $35 and $39 million per year.
Challenges for expanded Medicaid in NH
Objections to funding sources
When expanded Medicaid was re-authorized in 2016 for an additional two years, legislators had to think of ways to cover the costs. One way they did that was through inviting hospitals and healthcare providers to make voluntary donations to the program. Health providers were willing to do this because expanding Medicaid eligibility reduced the number of uninsured people seeking uncompensated care at their facilities. Donating to keep the program running was cheaper than paying the bill for that extra uncompensated care.
In August 2017 the Centers for Medicare and Medicaid Services published a letter to New Hampshire officials stating that it is against federal law to use voluntary provider donations to fund a Medicaid program.
Federal law specifically outlaws any relationship between a donation from a health care provider and payments that provider receives from Medicaid. Without this law, it would be possible for providers to more or less get “kickbacks” of federal Medicaid dollars in exchange for making private donations.
According to the New Hampshire Department of Health and Human Services, there was no relationship between how much a provider donated and how much that provider got in Medicaid payments. The donations were managed by a charitable foundation, and so state officials had no knowledge of which hospitals donated or how much they donated. The Centers for Medicare and Medicaid Services said there was a relationship because state law required New Hampshire to terminate its expanded Medicaid program if providers did not donate enough money to cover costs.
The federal government ordered the New Hampshire legislators to devise a new way to fund expanded Medicaid if the state continued the program past December 31, 2018. The bill that extended expanded Medicaid past that deadline — SB 313 (2018) — used a different mix of funding sources and removed the specific provisions for voluntary hospital and provider donations, though the fund is still open to accepting general "gifts, grants and donations".
When the New Hampshire Legislature reauthorized expanded Medicaid in 2016, they included a requirement for participants to work or attend school at least 20 hours per week. The Obama administration rejected these work requirements.
However, a second round of extending the life of expanded Medicaid in 2018 resulted in a new work requirement. With a different administration in Washington, the requirement was approved.
Supporters argue that work requirements ensure the state is not providing welfare to able-bodied adults who should be able to support themselves.
Opponents argue that most participants in expanded Medicaid are already working or seeking work, and the requirements just add burdensome and expensive bureaucracy.
Other changes at the federal level
Despite several attempts, thus far Congress has not passed a bill to revise the Affordable Care Act. However, Republicans still want to try to change Medicaid into a block grant program.
Under a block grant program, each state would get a set amount of money for Medicaid from the federal government. Each state could decide how to spend that money, including who would be eligible for Medicaid benefits. This is different than the current system, which gives states only some flexibility to manage Medicaid, and matches state spending on Medicaid no matter what the final dollar amount is.
A block grant would probably decrease federal Medicaid funding overall in New Hampshire. So far legislators have opposed drawing on any more New Hampshire tax dollars to fund Medicaid, so a federal block grant might mean the end of expanded Medicaid eligibility in the Granite State.
“New Hampshire was right to expand Medicaid eligibility, using private insurance wherever possible.”
- Expanded Medicaid eligibility covers the many individuals who are not poor enough to qualify for standard Medicaid but who cannot afford private insurance. If New Hampshire ends its expanded Medicaid program, those roughly 50,000 citizens would be left without an affordable option for health insurance and without the money to pay for care out of pocket. It is unethical to deprive low income residents of access to affordable health care.
- Thus far New Hampshire has been able to fund Medicaid expansion without raising any taxes.
- At the end of 2017, roughly 4,000 New Hampshire residents per month had paid for drug addiction treatment through expanded Medicaid. In the middle of a drug addiction crisis, it is critical that New Hampshire continues the program to ensure that residents have access to these treatment services.
- According to a 2017 literature review in the New England Journal of Medicine, “coverage expansions significantly increase patients’ access to care and use of preventive care, primary care, chronic illness treatment, medications, and surgery. These increases appear to produce significant, multifaceted, and nuanced benefits to health.” The same report concluded that these positive health outcomes will ultimately save taxpayers money in the long run by lowering the costs to treat unhealthy citizens without insurance.
“New Hampshire was wrong to expand Medicaid eligibility, using private insurance wherever possible.”
- So far the Legislature has been able to fund expanded Medicaid without raising any taxes. But it is possible that in the future, the federal government will make some changes to federal funding for expanded Medicaid, leaving states with a bigger price tag for the program. Even if the Affordable Care Act stays in place, federal funding for expanded Medicaid will decrease in the next few years. All of these factors suggest lawmakers will need more money from taxpayers to fund expanded Medicaid eligibility in the coming years.
- While studies may show that increased insurance coverage leads to increased access to care, that increased access comes with a price tag. For example, a landmark study from academics at Harvard and MIT found that expanded Medicaid programs are likely to increase emergency room visits, which are very expensive. Advocates of expanded Medicaid argue that over time participants will get healthier, leading to fewer hospital visits. However, these expanded Medicaid programs are still too young to conclude if participants will go to the doctor less frequently over time. It is possible that access to cheap care will even enable participants to go to the hospital when they do not really need to.
- The health costs for Medicaid expansion enrollees are higher than costs for other individuals who purchase health insurance. This may be because expanded Medicaid patients have very low copays. Those low copays might entice Medicaid expansion patients to visit the doctor more frequently than they really need to.
- The all-or-nothing structure of eligibility for expanded Medicaid may actually incentivize some participants to keep their incomes low in order to avoid crossing the threshold where they would lose their coverage. This keeps people trapped in a cycle of dependency instead of empowering them to become more self-sufficient.