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Medicaid expansion
New funding, delivery mechanisms

04/12/18



 The bill that would reauthorize expanded Medicaid sailed through the Senate and recently passed the full House on a policy vote. It would change how the program is funded and managed and includes new language for work and community engagement requirements.

Funding
One of the biggest changes to the state’s expanded Medicaid system, which covers about 52,000 low-income people in the state, will be how it’s paid for. Primarily, it’s funded by the federal government, but by 2020 the state will be on the hook for 10 percent of the program.
In the past the state was able to cover its side of the cost with the help of voluntary contributions from hospitals and insurance companies. Hospitals benefit from expanded Medicaid because it reduces things like unpaid ER visits. In 2014, before the program was fully in place, hospitals in New Hampshire swallowed a total of $427 million in uncompensated care. So hospitals and insurance companies agreed to give less than $10 million annually over a two-year period to help the program and cut down on uncompensated costs.
But the federal government said New Hampshire can’t do that anymore. Last year the Centers for Medicare & Medicaid Services said the state would have to find another funding mechanism or risk losing federal funding.
The new reauthorization bill aims to get its funding from the state Alcohol Fund, which is funded by a percentage of liquor sale revenues and would contribute about $10 million to Medicaid expansion annually, according to Michele Merritt, the president and CEO of New Futures.
Merritt said the total cost of the program for the state is estimated to be about $28 million to $30 million over the next authorization period, which is five years.
But the state may be continuing business as usual, while meeting the legal requirements set forth by CMS. The day after the House passed the expanded Medicaid bill on April 5, the governor announced the New Hampshire Hospital Association will be contributing $50 million into the Alcohol Fund over the next five years. While it is intended to bolster state support for treatment and recovery services, it is the exact amount the fund is expected to contribute to Medicaid expansion. Gov. Chris Sununu mentioned the Medicaid vote during the announcement, saying, “Following yesterday’s strong vote from the House of Representatives in support of the Granite Advantage Health Care Program, we are very confident with its prospects moving forward.”
Delivery
The other major change to the expanded Medicaid program is how the plan is managed and delivered. Right now, new enrollees get coverage through Managed Care Organizations before they’re transitioned into the private market. But because of the volatility and high costs within the private market, the bill would transition everyone back to the MCOs, which are expected to be less expensive and more stable.
But Merritt cautions that the cost savings might not be as significant as lawmakers hope, since those presumed savings might be largely based on lower reimbursement rates. This same bill, however, has a provision that directs the commissioner of the Department of Health and Human Services to address low rates particularly for mental health providers. The concern is that if they get reimbursed at rates that are too low, they won’t take Medicaid.
“If you don’t address rates then providers won’t accept that type of insurance and you’re going to end up with waitlists,” Merritt said. 
Politics
New language for work requirements is still up for approval from a federal waiver process, but Merritt thinks that approval is likely since it hews closely to that of other states that received approval from this administration. 
And the changes from the House Health, Human Services and Elderly Affairs Committee are an improvement, she said, since they provide for self-employed individuals and add flexibility for seasonal workers and people who don’t have steady hours.
The Senate had originally required a minimum of 100 hours of qualifying work or community engagement per month. The House changed that to 600 hours per six months.
Though the bill passed the House on the basis of policy language, the vote was 222 to 125. Those who voted against were all Republican or Libertarian. All Democrats voted in favor along with a bloc of Republicans. The bill is now in the hands of the House Finance Committee. 
“A lot depends on what Finance does and what they propose and if they’re going to have changes,” Republican House Speaker Gene Chandler said.
If there are no significant changes, Merritt expects the next vote to be similar to the last. Chandler said the next vote is set to happen on May 2 or May 3. If the bill fails to pass the House, the state could end up losing coverage for 52,000 people. 
“To lose Medicaid expansion would be catastrophic for this state, particularly in light of crisis that we’re up against and we’re handling,” Merritt said, noting that 90 percent of the people entering Safe Station and the drug court system get coverage through expanded Medicaid.
“If you have to turn away nine out of every 10 individuals coming through Safe Station and telling them you can’t help them, that is unacceptable,” Merritt said. 





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