Official: Medicaid expansion may bring disruptions
CONCORD — Adding 22,000 people to the health care system may cause some short-term disruptions, a state insurance official told the commission studying Medicaid expansion Tuesday.
However, Tyler Brannen, health policy analyst for the state Insurance Department, said within six to 10 months providers will respond to the new payers and make adjustments.
He said the system is currently serving low-income, uninsured people in emergency rooms. Under Medicaid and a managed care system, they would be served much more efficiently, he said.
Insurance officials also told the commission appointed by the Governor, Senate President and House Speaker to study the effect Medicaid expansion under the Affordable Care Act that subsidizing private insurance premiums for low-income individuals could be problematic under current ACA guidelines for the state.
Some lawmakers believe the state should consider the Arkansas plan to use Medicaid money to pay private insurance companies to cover low-income adults who qualify for Medicaid.
Deputy Insurance Commissioner Alex Feldvebel told the commission such a plan would require a waiver from the federal government and additional services to match those required under Medicaid.
The cost would have to be no more than the cost for Medicaid, when the Congressional Budget Offices estimates private insurance will cost about 50 percent more than Medicaid, he noted.
Last week state health and human services officials said one problem with the Arkansas plan to use private insurers to expand Medicaid is the federal requirement that consumers have a choice. They said only one company has been approved to participate in New Hampshire's exchange, which will be run by federal officials.
Feldvebel said he believes the requirement is for at least two qualified plans, which Anthem Blue Cross will be offering in the exchange.
While the deadline has passed for adding qualified New Hampshire insurers to the exchange, agency officials said a national company could still be added by federal officials. The three managed care companies the state hired to run the yet-to-be implemented Medicaid managed care program could also join the exchange, said life and health legal counsel Jennifer Patterson, but not until 2015 because the deadline has passed for 2014.
Brannen noted adding more competition to the marketplace does not necessarily drive costs down. If too many carriers are in the market, he said, their leverage with providers is diluted and they will not win the 30 to 35 percent discount the state's three large insurers — Anthem Blue Cross Blue Shield, Cigna and Harvard Pilgrim — enjoy today.
He told the committee the biggest cost factors for insurers are medical claim costs, provider contracts and the health status of its members.
Brannen noted that in 2011 health insurance premiums increased 4 percent but benefits decreased by 5 percent and in 2010 premiums increased 3 percent, but benefits were reduced by 10 percent.
"If you take that out over 10 years," Brannen said, "no one will have health insurance."
He said reduction in benefits comes through employees paying more of the costs. "The bottom line is people have more skin in the game," he said.
If New Hampshire decides to expand Medicaid eligibility to 138 percent of the federal poverty level, state health officials say that will add 48,358 people to the program over the next 7½ years, while the federal government will pay $2.4 billion to health care providers. The state is expected to spend about $18 million for expansion over the period.
Under Medicaid expansion, the federal government would pay 100 percent of the cost for the first three years and then gradually reduce its share to 90 percent.
The commission was created during the budget-writing process when the Republican-controlled Senate balked at expanding Medicaid eligibility as Gov. Maggie Hassan and the House had proposed.
The commission has until Oct. 15 to make recommendations on expansion.
The commission meets Tuesday to hear from a panel of national experts on Medicaid and then meets again Aug. 13 and 27.