Research & Commentary: New Hampshire Considers Rolling Back Medicaid Expansion

Published March 19, 2018

Ever since New Hampshire expanded Medicaid through Obamacare, the number of Granite State residents on the program has skyrocketed and its costs have spiraled out of control. But a new proposal by New Hampshire lawmakers promises to rein in the sprawling safety-net program.

State Rep. Neal Kurk (R-Weare) recently introduced legislation that would reduce the eligibility threshold for New Hampshire’s Medicaid program from 138 percent of the Federal Poverty Level to 100 percent for able-bodied, childless adults. Kurk promises these changes would refocus Medicaid back to its core mission of serving the truly needy, including the elderly, disabled, and pregnant mothers in poverty.

“[My bill] implements a very basic philosophy that is rampant in the Granite State, and that is: All people should be treated equally, and that when we wish to help our less fortunate neighbors, we should do so when they’re less fortunate, but not when they are not less fortunate,” Kurk said.

The individuals Kurk is referring to are the nearly 54,000 able-bodied and childless adults who signed up for New Hampshire’s expanded Medicaid program. A recent report commissioned by the New Hampshire Insurance Department found 59 percent of expansion enrollees are under the age of 40. These able-bodied individuals are imposing a severe financial burden on the state’s coffers. The same study found Medicaid enrollees spent 26 percent more on health care services than individuals with conventional private health insurance plans. While people with health insurance spend on average more than $5,000 on annual medical expenses, Medicaid expansion recipients spend nearly $6,500 on health care services annually.

Those who receive Medicaid unnecessarily not only force the state to impose higher taxes on residents of the Granite State, they also put lawmakers in a situation in which they have to divert critical resources that would have otherwise been allocated to services for the elderly and patients in dire need of Medicaid to survive.

Before New Hampshire expanded Medicaid to able-bodied residents in 2013, the program reimbursed doctors 80 cents for every dollar they received from individuals with private insurance. But as the state opened Medicaid’s doors to tens of thousands of newly eligible people, the program was forced to slash compensation to doctors. A 2016 survey by the Urban Institute found New Hampshire’s Medicaid program now reimburses physicians less than half of what they receive from private insurers.

Medicaid’s low physician compensation rate has been particularly painful for Medicaid’s most vulnerable patients. Roughly 260 children and adults with developmental disabilities, brain disorders, and other chronic issues are in desperate need of home- and community-based services to treat their debilitating conditions. However, because New Hampshire decided to provide Medicaid to healthy young adults, the state’s program lacks the funding to adequately treat these vulnerable patients.

Kurk’s proposal would refocus Medicaid’s resources on caring for the truly needy. By limiting Medicaid eligibility for able-bodied adults from 138 percent of the poverty level to 100 percent, New Hampshire can ensure Medicaid has the funding available necessary to care for sick children and adults.

New Hampshire’s neighbor, Maine, is a prime example of how to effectively reform Medicaid. Following Maine’s disastrous Medicaid expansion from 2000 to 2010, Gov. Paul Lepage (R) ended the program’s availability for childless and able-bodied adults. Since then, more than 80,000 individuals have exited Maine’s bloated Medicaid program. As a result, Medicaid in Maine is more effective for those truly in need. Funding for nursing facilities has increased 40 percent, and reimbursement rates for home care has increased 60 percent. Similarly, financing for intellectual and developmental disabilities grew by $100 million. Maine’s successful reforms prove that controlling Medicaid’s growth is essential for providing reliable health care access to the sickest, most disadvantaged patients.

By limiting Medicaid exclusively to those in need, New Hampshire would ensure its program is well-equipped to provide a reliable safety net for the state’s truly vulnerable.

The following documents examine Medicaid reform in greater detail.

Don’t Wait for Congress to Fix Health Care
In this Policy Brief, Heartland Senior Policy Analyst Matthew Glans documents the failure of Medicaid to deliver quality care to the nation’s poor and disabled, even as it drives health care spending to unsustainable heights. Glans argues states can follow the successful examples of Florida and Rhode Island to reform their Medicaid programs or submit even more ambitious requests for waivers to the Department of Health and Human Services – a suggestion the Trump administration has encouraged.

Research & Commentary: States Pursue Work Requirements for Medicaid–commentary-states-pursue-work-requirements-for-medicaid?source=policybot
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines efforts by several states to add work requirements to their Medicaid programs. “Implementing Medicaid work requirements would be a good first step for Medicaid-expansion and non-expansion states toward helping to limit the rising costs of Medicaid,” Glans wrote.

Five Key Questions and Answers About Section 1115 Medicaid Waivers
This Issue Brief from the Kaiser Family Foundation provides an overview of what Section 1115 Medicaid waivers are, how they are approved and financed, how states have used them, and how they have impacted health care reform.

Maine Releases Draft Waiver Request Proposing New Eligibility Requirements
Researchers at Manatt, Phelps, and Phillips examine Maine’s draft Medicaid waiver proposal. They discuss in detail how it would modify eligibility requirements and features of coverage for much of the state’s Medicaid population.

A Survey of State Medicaid Expansion 1115 Waivers
Tara O’Neill Hayes of the American Action Forum examines several recent Section 1115 waiver proposals and discusses how they seek to reform Medicaid.

Kentucky Seeks Stricter Medicaid Work Requirements
Nathaniel Weixel of The Hill examines Kentucky’s new efforts to reform its Medicaid program. Kentucky lawmakers have asked the Centers for Medicare and Medicaid Service for permission to impose stricter work requirements for Medicaid beneficiaries. The new waiver request updates a previous request to overhaul the state’s Medicaid program.

The Value of Introducing Work Requirements to Medicaid
Ben Gitis and Tara O’Neill Hayes of the American Action Forum examine the value of work requirements and argue more work requirements are needed in other safety-net programs, including in Medicaid.

The Oregon Experiment—Effects of Medicaid on Clinical Outcomes–effects-of-medicaid-on-clinical-outcomes?source=policybot
This article from The New England Journal of Medicine examines Medicaid outcomes in Oregon. Oregon gave researchers the opportunity to study the effects of being enrolled in Medicaid (compared to being uninsured) based on data from a randomized controlled trial, the “gold standard” of scientific research. The results showed no improvement in health for enrollees, but it did reveal better financial protections for patients and increased medical spending.

Why States Should Not Expand Medicaid
Writing for the Galen Institute, Grace-Marie Turner and Avik Roy outline 12 reasons states should not expand Medicaid and should instead demand from Washington, DC greater control over spending to better fit coverage expansion to states’ needs, resources, and budgets.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit The Heartland Institute’s website and PolicyBot, Heartland’s free online research database. 

If you have any questions about this issue or The Heartland Institute’s website, contact Charlie Katebi, The Heartland Institute’s state government relations manager, at [email protected] or 978/855-2992.