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Garry Rayno's State House Dome: Coming down to crunch time

State House Bureau

June 02. 2013 12:24AM

The Senate is expected to approve its budget proposal this week - although Democrats will try to make changes - and then the budget war begins.

Front and center in that war between the House and Senate will be Medicaid expansion. It is perhaps the one issue that could doom negotiations and send both sides back to their corners to regroup.

As most Concord watchers know by now, the Senate Finance Committee budget plan does not expand Medicaid under the Affordable Care Act, also known as Obamacare, and instead establishes a commission to work for a year-and-a-half to assess the effect of expansion on the state.

Gov. Maggie Hassan and the House want to expand Medicaid eligibility, making it available to those with incomes up to 138 percent of the federal poverty level, which would add about 60,000 people to the state-federal health insurance program.

Along with providing insurance coverage, the big draw for expansion supporters is the $2.5 billion in federal taxpayer money that would flow into the state over the next several years to pay health care providers for Medicaid services. The state's obligation during that period ranges from $27 million to $85 million.

Opponents such as Senate President Peter Bragdon, R-Milford, and former House Speaker Bill O'Brien, R-Mont Vernon, said they don't trust the federal government to live up to its promises, particularly in light of the growing federal deficit and debt.

If the federal government fails to pay what it promises, Medicaid expansion will blow a huge hole in the state's budget, O'Brien and others have argued.

The other reason given by Republican senators for opposing expansion is the unknown factor involved in implementing a new program. As Sen. Andy Sanborn, R-Bedford, argued recently, expansion and its ramification are very complicated matters. Time is needed to sort all that out, he says, before lawmakers can decide what is best for the state.

Medicaid expansion is one point of a triangle that includes managed care and the Medicaid Enhancement Tax, which is tied to uncompensated care provided by the state's hospitals.

In theory, expanding Medicaid would lower the amount of free or charity care that nonprofit hospitals provide to low-income patients who cannot pay for the services they receive.

Currently, the Medicaid system is a point-of-service model that pays for the services provided. Under managed care, each patient would need to have a personal care physician or "medical home" to manage care. The goal is to stop Medicaid recipients from using hospital emergency rooms as doctor offices. The patient's doctor would manage care by determining whether lab tests or a specialist are needed instead of the patient deciding as in a point-of-service model.

The managed-care aspect is expected to save the state money on the Medicaid program - about $16 million was expected this fiscal year but not realized when the program failed to get off the ground. An expanded Medicaid program is expected to lower the amount of free care hospitals have to provide.

The problem, however, is hospitals have balked at joining the networks of the three companies hired to run the state's managed care program.

The hospitals view the situation as an opportunity to leverage higher Medicaid reimbursement rates from the state. The rates do not come close to covering the cost of services. Ten of the state's largest hospitals have sued over the issue in federal court, but the case is still pending.

The third point of the triangle is the Medicaid Enhancement Tax and what the state returns to hospitals toward the cost of providing uncompensated care. Two years ago, the previous Legislature essentially stopped returning the tax money assessed on patient services to all but the small, critical-access hospitals and used the money instead for other things.

To entice hospitals to join managed care, both the House and Senate increased the money for uncompensated care reimbursement in their budgets this spring.

Also in the picture are the three national managed care companies that the state hired to run the program under the assumption Medicaid would be expanded. At the time, expansion was mandatory under the Affordable Care Act (ACA), but the U.S. Supreme Court ruled otherwise.

Will those companies be willing to stick around if Medicaid is not expanded? That remains to be seen.

So the equation everyone is trying to decipher is whether expanding Medicaid by 60,000 people would reduce uncompensated care costs enough to lower what the state pays to hospitals to offset it and whether Medicaid costs would be reduced enough under Managed Care to pay for that expansion?

The Democratic-controlled House and Hassan say the ACA would allow the state to increase the number of insured people at little cost to the state while $2.5 billion in federal tax dollars would boost the state's economy.

Republicans are not so sure the numbers add up.

If the expansion happens, the state would receive more than $400 million in federal dollars in the upcoming biennium while spending very little money beyond administrative costs, according to Health and Human Services officials, while the state would not have to contribute until three years down the road.

Ultimately, the two sides are arguing about $5 million or $6 million in the next biennium budget, and that is small change in a budget between $10.7 billion - the Senate version - and $11 billion - the House version.

And then there is the raw partisanship of Republicans trying to block the ACA in any way possible to make it even more unpopular going into the next two elections, while Democrats are pushing to make it work for their party's sake.

What is really at stake here is a question of political philosophy, and that is why this is going to be such a contentious issue and one that may ultimately leave the state without a budget when the fiscal year ends, June 30.

The stakes are very high for both parties and neither wants to lose this one.

The ultimate question becomes, if the Legislature comes to a stalemate, does Hassan move forward on her own to expand Medicaid?

The current budget has a provision that prohibits changes in eligibility requirements for Medicaid, but neither the House nor the Senate budgets include such a provision for the next two years.

Moving forward by executive order would surely make New Hampshire a test case. Other states' governors have backed expansion, but as yet no legislature has blocked their governor's decision.

It could indeed be a long, hot summer.

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Continuing the Pressure: Hassan will be one of the featured speakers at press conference Tuesday dubbed "Why NH Can't Wait for Medicaid Expansion."

Hassan will be joined by at least three state residents currently without health insurance who would be covered if the state decides to expand Medicaid.

The press conference is being organized by New Hampshire Voices for Health with other organizations, including the New Hampshire Hospital Association.

The press conference is at 11 a.m. in the Legislative Office Building.

The Senate votes on its budget -- without Medicaid expansion -- on Thursday.

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Black Book Ponderings: There are a number of books that contain information on the legislators and staff, including a roster of all House and Senate members, and what's called the Black Book, which includes additional information such as home addresses, staff members, House and Senate rules and the state's constitution.

This year's Black Book had some interesting changes.

Reporters and their news organizations that cover the Legislature are usually included, but were not this time.

Also, two positions that used to be listed as officers of the Senate - the Senate clerk and the Senate sergeant at arms - are now listed as Senate staff while the House continues to list the House clerk and House sergeant at arms as House officers.

Senate officials say no slight was intended, and the positions have been both ways in past Black Books.

They said the clerk is not a constitutional officer but rather elected and paid by the Senate, so is part of the staff.

They had no explanation for why the reporters and news organizations were left out.

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A Thank You: Sens. Nancy Stiles, R-Hampton, and Lou D'Allesandro, D-Manchester, were absent from Thursday's Senate session.

They were in Jordan at the invitation of the king, who wanted to thank them for their work to allow the American University of Madaba, which is located in Jordan but incorporated in New Hampshire, to confer degrees.

The two senators sponsored the bill. Stiles is also the chairman of the Senate Health, Education and Human Services Committee. D'Allesandro sponsored a similar bill for a university in Italy.

The Senate Finance Committee hurried through its final work on the state budget Tuesday so D'Allesandro could leave on his trip.

Was the weather as hot in Jordan as was here at the end of the week?

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