How should New Hampshire handle national health care reform?
By: LFDA Editor
In March 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act, a federal statute that, along with the Health Care and Education Reconciliation Act of 2010, marks Congress's chief health care reform legislation. For the particulars of this act from the White House perspective, click here. Most of the Affordable Care Act (also known as "ObamaCare"), including the controversial individual mandate to purchase health care, was upheld by the U.S. Supreme Court in June 2012.
While there are many aspects of the Affordable Care Act, there are two major provisions that affect state government. First, each state must run an online health insurance marketplace (also called an "exchange"). Second, each state had to decide whether to expand eligibility for Medicaid.
Online Health Insurance Exchange
One of the primary requirements of Affordable Care Act was that every state establish an online health insurance exchange, often described as “one stop shopping” for consumers buying insurance. Each state had three options to establish the exchange: let the federal government create and operate the exchange, use federal funds to create and operate the exchange on the state level, or partner with the federal government on a limited basis.
HB 1297, passed by the New Hampshire legislature in 2012, forbid the state from using federal funds to create and operate the exchange on the state level. New Hampshire therefore had two choices: leave the exchange up to the federal government, or partner with the federal government on a limited basis.
In February 2013, New Hampshire agreed to partner with the federal government for the online health insurance exchange. Under the partnership the U.S. Department of Health and Human Service operates the exchange, while New Hampshire government regulates the insurance plans. New Hampshire is also responsible for consumer assistance for residents navigating the exchange.
In her February 2013 letter requesting a partnership, Gov. Maggie Hassan asserted that a partnership is the best way to ensure that the online exchange meets New Hampshire’s unique needs.
When the federal insurance exchange launched October 1, the website was plagued by problems. President Obama promised a fix by the end of November 2013.
The exchange was also criticized for only drawing one New Hampshire insurer, Anthem Blue Cross Blue Shield. Anthem was criticized in turn for offering a narrow network of health care providers. Anthem says the narrow network lowers costs and ensures quality. Opponents argue that the narrow network unfairly limits consumer choice.
A second insurer, Harvard Pilgrim Health Care, will join the exchange in 2015.
New Hampshire may withdraw from the partnership from the federal government if the state chooses. However, HB 1297 still forbids New Hampshire from creating an exchange at the state level, so unless state law changes, New Hampshire residents will have to use the federal exchange.
New Hampshire also had to decide whether to expand Medicaid eligibility under the Affordable Care Act. Originally the Affordable Care Act required states to expand Medicaid eligibility starting in 2014, or the federal government would stop matching state contributions to Medicaid. However, the U.S. Supreme Court ruled that the federal government cannot deny matching funds if a state decides not to expand Medicaid.
As part of a budget compromise in June 2013, the New Hampshire legislature agreed to study a Medicaid expansion over the summer. On October 8, 2013 that study committee voted in favor of expanding Medicaid. After three weeks of negotiations, a bipartisan plan broke down and the Republican-controlled Senate killed the expansion. Gov. Maggie Hassan (D) and Senate Minority Leader Sylvia Larsen
(D) said they hope to continue negotiations with Republicans and find a compromise.
Ideally a Medicaid expansion would decrease the number of uninsured patients, which in turn would decrease the shift of costs from uninsured patients to the insured. “Anytime you put more people into the pool, you maximize your ability to create efficiencies and control costs,” explained Ned Helms, former health and human services commissioner and co-chairman of President Barack Obama’s 2008 campaign in New Hampshire. The federal government will also reimburse states for 100% of the cost of expanded Medicaid through 2016.
However, opponents of the Medicaid expansion argued that allowing government greater involvement in health care would undermine competition in the market, therefore raising costs for everyone. Opponents also pointed out that federal reimbursement will decrease slowly over time, capping out at 90% in 2020. According to the Nashua Telegraph, “Medicaid is the single largest item in the two-year New Hampshire budget… New Hampshire’s cost is about $1 billion a year.” Opponents argued that cash-strapped New Hampshire cannot afford a Medicaid expansion.
In January 2013 the Lewin Group released a report prepared for the New Hampshire Department of Health and Human Services that analyzed how a Medicaid expansion would impact New Hampshire. The Lewin Group is a healthcare policy research and management consulting firm that has prepared reports for a variety of state governments, federal offices, and private enterprises. NHPR summarized the report as follows:
- Expansion will cost the state $85 million between 2014 and 2020. Not expanding saves the state $65 million over the same period.
- There are currently 170,000 uninsured people in New Hampshire. If the state expands Medicaid, that number drops to about 71,000. If the state doesn't expand, the number drops to roughly 93,000.
- No matter what the state does, the Affordable Care Act will mean jobs in New Hampshire's health care sector. 5,100 if the state expands. About 700 fewer if it doesn't.
- According to the report, hospitals in New Hampshire stand to profit more if the state doesn't expand the program.
- The total impact of expansion on the budget, due to cost savings in other areas, will be $18 million. The expansion would add an additional $2.8 billion to the state's economy.
Several legislators hope to change New Hampshire's implementation of the Affordable Care Act in 2014.
Rep. Sam Cataldo (R-Farmington) has requested a 2014 bill that would require the state Insurance Department to hold public hearings before approving any insurance plans to be offered on the exchange.
Sen. David Pierce (R-Etna) has requested a 2014 bill "requiring an insurer participating in the health exchange to include access to a hospital in each county of the state."
Rep. Bill Nelson (R-Brookfield) has requested a 2014 bill "requiring that all hospitals be allowed to participate in the health exchange."
Those three bills are in response to the New Hampshire plans offered by Anthem Blue Cross and Blue Shield on the health insurance exchange.
Rep. Thomas Sherman (D-Rye) has requested a 2014 bill "relative to deductibles, coinsurance, and out-of-pocket maximums under health insurance policies." The details of that bill are not yet public.
Rep. Neal Kurk (R-Weare) has requested a 2014 bill "relative to health insurance cost-reduction incentives." The details of that bill are not yet public.
Former House Speaker Bill O'Brien (R-Mont Vernon) and Rep. J.R. Hoell (D-Dunbarton) have requested a 2014 bill "allowing health insurance policies to be sold without mandates." The details of that bill are not yet public.
Rep. Thomas Sherman (D-Rye), Rep. Cindy Rosenwald (D-Nashua), and Rep. Peggy Gilmour (D-Hollis) have requested a 2014 bill "relative to access to health insurance coverage." The details of that bill are not yet public.