New Hampshire legislators are nearing a deal that would expand the state’s Medicaid program, using a model similar to one employed in Arkansas, where federal Medicaid dollars are used to purchase private medical insurance. Currently, New Hampshire’s Medicaid program covers low-income children, parents with non-disabled children under age 18, pregnant women, older residents, and people with disabilities. The proposed expansion would add about 50,000 Medicaid recipients, including anyone under 65 who earns up to 138 percent of federal poverty guidelines.
The plan under consideration would expand Medicaid in two groups. About 12,000 people could receive coverage before July if they qualify for a current program that provides a subsidy for employer-based coverage, and 38,000 would receive federal Medicaid dollars to purchase private insurance. If the state legislates the expansion, the federal government will cover the full cost until 2017. The plan would require three federal waivers to be approved by March 31, 2015.
Like the Arkansas “private option,” this plan has several shortcomings. First, despite the private-market feel of the program, it still represents an expansion of Medicaid, where multiple aspects of the insurance plan are dictated by the federal government, such as cost-sharing, and the beneficial aspects of real market competition are lost. Second, expansion would be extremely difficult to roll back. These criticisms have led the Arkansas legislature to vote four times in recent weeks not to fund the state’s private option.
Although other states have not prepared for the possibility of reduced federal funding, New Hampshire’s proposal would end the expansion if federal funding drops below 100 percent, unless the legislature voted to continue the program. Also, the program would end at the end of 2016 if the legislature chooses not to reauthorize it.
The Heritage Foundation estimates Medicaid expansion would cost New Hampshire taxpayers $126 million more than if the state does not expand. They also found Medicaid expansion is likely to increase emergency room use by 40 percent, resulting in longer wait times and higher costs. Recent research also casts doubt on whether Medicaid expansion improves the care patients receive. A study published in the New England Journal of Medicine (NEJM) examined outcomes from Oregon’s Medicaid program and found expansion fails to achieve the principal goal of any health care reform: improving people’s overall health.
Without significant reforms, Medicaid will continue to be fiscally unsustainable. Instead of expanding a flawed, overly costly model that delivers subpar health care and shifts more power to the federal government, New Hampshire lawmakers should turn instead to reform options like those piloted in Florida that reduce costs and offer better care to patients in the existing system.
The following articles offer additional information on state Medicaid expansion.
Ten Principles of Health Care Policy
This pamphlet in The Heartland Institute’s Legislative Principles series describes the proper role of government in financing and delivering health care and provides reform suggestions to remedy current health care policy problems.
State Senate Unveils New Medicaid Expansion Plan
This article from the New Hampshire Union-Leader examines a proposal in the New Hampshire legislature that would bring expanded health insurance coverage to about 50,000 of Granite Staters below 138 percent of the federal poverty level using 100 percent federal funding for the next three years.
The Medicaid Expansion Compromise That Isn’t
Charlie Arlinghaus of the Josiah Bartlett Center for Public Policy discusses the New Hampshire compromise and argues it does not represent a real compromise and instead expands the state’s Medicaid program by 50 percent.
Expanding Medicaid will Hurt New Hampshire’s Families with Lower Incomes and Fewer Jobs
Wendy P. Warcholik of the New Hampshire Center for Economic Policy argues Obamacare’s expansion of Medicaid is not “free,” because it will create serious repercussions for the long-term health of New Hampshire’s economy: “Clearly, the better option is to shelve Medicaid expansion and reduce government spending which would, in turn, expand the private sector. The private sector could then get back to work increasing incomes and creating new jobs.”
Conservatives Blast Medicaid Expansion Deal
This article outlines the responses from conservative groups in New Hampshire that are calling on Republicans to oppose the Medicaid expansion plan.
Medicaid Expansion Is Bad Medicine for New Hampshire
Writing in the New Hampshire Union-Leader, John Stephen, former state commissioner of health and human services, argues the fundamental problem with the New Hampshire Medicaid expansion plan is that it continues to build on a profoundly flawed Medicaid program desperately in need of reform.
The Empty Promises of Arkansas’ Medicaid Private Option
The Foundation for Government Accountability examines what it calls the empty promises of Arkansas’ Medicaid Private Option—using supporters’ direct quotes from sources including media interviews, floor speeches, and social media posts—and rebuts them point by point.
Policy Tip Sheet: Medicaid Expansion
Kendall Antekeier of The Heartland Institute explains why states should avoid Medicaid expansion and instead reform their fiscally unsustainable programs in ways that will offer better care at lower costs to taxpayers.
Research & Commentary: The Medicaid “Cure”
Writing for The Heartland Institute, Kendall Antekeier examines the Medicaid Cure, a pilot program established in five large Florida counties, which uses a premium support model in which 290,000 Medicaid recipients are given a range of premiums and plans from which to choose.
A Medicaid Cure: Florida’s Medicaid Reform Pilot
The Foundation for Government Accountability gives insight into the Florida Medicaid Cure’s success, stating, “When the patient is the priority, government and HMO bureaucrats are finally held accountable. Costs flatten and patient health and satisfaction improves.”
The Private Option: Medicaid Expansion by Another Name
Americans for Prosperity’s state policy manager, Nicole Kaeding, breaks down what could be in store for Arkansas after the vote to expand Medicaid in the state.
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 Health Care News at http://news.heartland.org/health, The Heartland Institute’s website at http://heartland.org, and PolicyBot, Heartland’s free online research database at www.policybot.org.
If you have any questions about this issue or the Heartland Institute Web site, contact Heartland Institute Government Relations Director John Nothdurft at [email protected] or 312/377-4000.