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, see: http://www.whitehouse.gov/healthreform. Most of PPACA (known as "ObamaCare"), including the controversial individual mandate to purchase health care, was upheld by the U.S. Supreme Court in June 2012.
In 2013 New Hampshire must navigate two major aspects of Obamacare. First, New Hampshire will partner with the federal government create an online health insurance marketplace. Second, New Hampshire must decide whether to expand the eligibility for Medicaid. Obamacare policy decisions are overseen by the New Hampshire Joint Health Care Reform Oversight Committee, a twelve-member joint legislative committee with members nominated by the Governor, Insurance Commissioner, and Health and Human Services Commissioner.
One of the primary requirements of ObamaCare is that every state establish an online health insurance marketplace, often described as “one stop shopping” for consumers buying insurance. In 2012 the New Hampshire legislature passed HB 1297, a bill which prohibited New Hampshire from creating the federally mandated marketplace. After the U.S. Supreme Court upheld the constitutionality of Obamacare in June 2012, the federal government offered New Hampshire one last means of participation in the creation of New Hampshire’s marketplace: a partnership. Such a partnership was not expressly forbidden in HB 1297.
On February 12, 2013, Gov. Maggie Hassan and the Joint Health Care Reform Oversight Committee agreed to partner with the federal government in the creation of an online health insurance marketplace. Under the partnership the U.S. Department of Health and Human Service will operate the marketplace, while New Hampshire government will regulate the insurance plans. New Hampshire will also handle consumer assistance for residents navigating the marketplace. The marketplace must be operational by January 1, 2014.
In her letter requesting a partnership, Hassan asserted that a partnership is the best way to ensure that the online marketplace meets New Hampshire’s unique needs. She also noted that the creation and operation of the marketplace will be funded entirely by federal grants through 2014.
Opponents of the partnership caution that New Hampshire may still incur unexpected costs related the marketplace. In April the Joint Health Care Reform Oversight Committee voted to freeze funds from the federal government earmarked for the consumer assistance program until the federal and state government provide more detail on how the funds will be spent. On June 6 the Senate voted against HB 668, a technical bill requested by the New Hampshire Insurance Department that would bring New Hampshire regulations in line with federal Obamacare regulations. If the House and Senate do not agree to some form of HB 668 during conference committee in June, the federal government may take on responsibility for regulating the insurance plans offered on the exchange.
New Hampshire may still choose to withdraw from the partnership at any time. Alternatively, federal policy would allow New Hampshire to take complete control of the exchange, provided the state repeals HB 1297.
New Hampshire must also decide whether to expand Medicaid eligibility under ObamaCare. Originally PPACA 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.
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 would also reimburse states for 100% of the cost of expanded Medicaid through 2016.
However, opponents of the Medicaid expansion argue that allowing government greater involvement in health care would undermine competition in the market, therefore raising costs for everyone. Opponents also point 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 argue 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 analyzes 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.
On June 6 the Senate voted against expanding Medicaid as part of the state budget, contrary to the House version of the budget. Budget deliberations, including whether or not to expand Medicaid, will continue in the House and Senate through June.
For the latest status on the implementation of ObamaCare in New Hampshire, see the “Issue Status” box to the right of this summary.