November 17. 2013 12:23AM

Garry Rayno's State House Dome: Battle likely on expanding Medicaid eligibility

State House Bureau

With all the talk in Concord and Washington about Medicaid expansion, one piece not getting much attention is the cost to states for those already eligible for Medicaid, but who have not signed up. Under the individual mandate coming Jan. 1, those who go onto the federal insurance marketplace will be put on their state's Medicaid program.

Under the Affordable Care Act, the federal government initially pays 100 percent of the cost for the newly eligible. But it pays only the existing federal percentage if the person was already Medicaid-eligible. In New Hampshire, that's a 50-50 split with the feds.

In a letter to the administrator for the Centers for Medicare and Medicaid Services, U.S. Sen. Kelly Ayotte says she believes "it is important to highlight the true costs of the law to our states."

One of the key elements of the act is expanding Medicaid, she says, although it is optional for states thanks to a U.S. Supreme Court ruling on the ACA.

"While states are no longer required to expand their Medicaid programs, we believe it is important that states better understand the program costs they can expect to see after Jan. 1, 2014," Ayotte wrote along with fellow Sen. Lindsey Graham of South Carolina.

In that light, she asks three questions:

Will the percentage of federal matching funds remain the same for those previously eligible for Medicaid that now enroll in the program?

What percentage of the nation's new enrollees in the expanded Medicaid program were previously eligible for the program?

What percentage of New Hampshire's new enrollees were previously eligible for Medicaid?

"As senators representing South Carolina and New Hampshire, we want to understand fully the underlying costs to states' Medicaid programs," Ayotte and Graham wrote.

State Senate Majority Leader Jeb Bradley, R-Wolfeboro, said he was unaware of the letter, but is aware of the problem and said delaying the individual mandate would have been good to do along with the one-year extension President Obama announced last week for existing insurance policies that will not meet the requirements of the act in 2014.

In terms of the current debate in Concord over expansion, Bradley said, he is not sure the letter would have much effect.

State Health and Human Services Department officials expect about 1,657 people who were previously eligible will be added to the Medicaid program in 2014, and the number will grow to 3,208 by the year 2021.

Paying 50 percent of the Medicaid cost for those individuals is expected to cost the state $46.6 million over the eight-year period, according to information supplied by the DHHS.

But the agency also predicts about 2,000 people will leave Medicaid and go on private insurance and the number to grow to slightly less than 4,000 by 2021, saving the state $71 million.

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LITTLE STEPS: Another week passed and Democratic and Republican lawmakers inched only a little closer to an agreement on expansion of Medicaid eligibility with the crucial vote Thursday. Neither side is willing to give on the "essential components" of their plans.

Republicans do not want to create an open-ended entitlement program that puts taxpayers on the hook for health care with questionable outcomes, while Democrats talk of hard-working waitresses and carpenters who desperately need health care at no cost to the state for three years.

The key words for Senate Republicans and their plan are private insurance, reforms, and triggers, while the key words for Democrats are competition, federal money and access.

Key words left out of the spin are budget neutrality, something the federal government is not likely to bend on. The cost of private insurance and the additional services required for the Medicaid program such as transportation cannot be more than it would cost in the "regular Medicaid program."

Little has been done to demonstrate that private insurance coverage and the "wrap-around services" would be no more expensive than the state's new managed care program.

Medicaid currently pays providers about 54 cents on a dollar, while private insurers would have to pay something close to 100 percent of the cost or more. That makes budget neutrality difficult to achieve.

Bradley says the savings from requiring those qualifying for Medicaid with insurance through their employers to remain on those plans saves enough money to make the Senate's plan budget neutral.

Currently, there are about 150 people on the Health Insurance Premium Payment Program (HIPP), which has saved about $1 million annually, DHHS officials told lawmakers last week.

Expanding the program to include 13,000 to 14,000 in the next three years could be expected to bring the state savings of about $10 million, according to DHHS, because the federal government pays most of the cost.

Is that enough to make up the difference? You can't answer that unless you know what the private insurance premiums will cost and that is yet to be determined beyond 2014.

Until the real cost of the private insurance is known, it is impossible for either side to make a convincing argument. Lawmakers need real data, but that will not come until the program is expanded.

Under the Senate plan, expansion would end within a year if the state does not receive the necessary federal waiver. Republicans cling to their belief the Obama administration will give states more flexibility, which it may not.

Also the Senate plan ends after the three years the federal government pays 100 percent of the cost, requiring lawmakers to vote to reauthorize the program.

House Democrats and Gov. Maggie Hassan want the program to continue in perpetuity unless the feds renege on the promised money or require more expensive benefits.

Somehow the two proposals need to come together with evaluation periods so that the state can assess how well the managed care program is working for say two years and then the private insurance provision for another two years.

Unless they both agree to give up key elements of their plans, Thursday will be a long, bitter and partisan battle.

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NO HIDDEN AGENDA: Senate Republicans agreeing to the leadership's plan are between a rock and a hard place.

On the one hand, hospitals and their health-care systems want Medicaid expansion. While they would like the higher private insurance reimbursement rate, they will accept what Medicaid pays because something is better than nothing.

It is much easier for hospitals to target 24 Senate members than 400 House members.

On the other hand, the right-wing of the GOP does not want Medicaid expansion or any part of the ACA.

Several weeks ago at a press conference, Aaron Day, the new chair of the Republican Liberty Alliance, warned Republicans they will have a primary if they vote for Medicaid expansion.

The organization's home page has a picture of an empty Senate chamber with a box on the right titled "RINO (Republican in Name Only) Hunting.

"Join the team that's helping to stop Obamacare's Medicaid expansion and prevent a New Hampshire state income tax," is displayed prominently on the group's Home Page.

Clicking the box brings up pictures of 11 of the 13 Democrats and says "Click on the picture of the RINO Senator to obtain contact information and recommend primary candidates" and a place for your name and other information.

The only two Republican senators not on the list are Andy Sanborn of Bedford, and Sam Cataldo of Farmington, who both appeared at the press conference where Day made his statement.