Editorial: Expanding Medicaid is a good deal

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Gov. John Lynch held a wide-ranging discussion with the Monitor editorial board this week and, in classic Lynch fashion, shined a businessman’s light on decisions facing the state. One of those decisions is whether to take the federal government up on its offer to expand Medicaid enrollment to anyone with an income below 133 percent of the federal poverty level. The feds are offering to foot the whole bill for expanded coverage for the first three years and then gradually reduce their share to 90 percent in 2020.

It’s a deal that lawmakers should take, Lynch said. We agree. For just $133 per person per year, according to a state Health and Human Services Department estimate, as many as 60,000 uninsured New Hampshire residents could get health coverage. Some estimates place the cost to the state much higher, but much depends on how many of those eligible for expanded Medicaid coverage take advantage of it.

It’s theoretically possible, as opponents of expansion fear, that a future Congress could reduce or eliminate the federal contribution to Medicaid. Politically, however, once the program is up and running in a majority of states, that would be difficult if not impossible.

Expanding Medicaid to provide low-income residents with not just access to care when they’re injured or ill, but also with routine health care that may prevent illness, is the moral thing to do. Like Lynch, Gov.-elect Maggie Hassan favors the expansion. But expanding Medicaid is also a sound financial decision, in part because if New Hampshire doesn’t, the state will lose about $1.1 billion in federal payments that would stimulate the economy, create jobs, and slow the increase in health insurance premiums.

Currently, about one in 10 New Hampshire residents is covered by Medicaid. Most of them are children and indigent elderly residents in nursing homes. Expanding Medicaid would add tens of thousands of adults with incomes too low to afford even federally-subsidized insurance to the Medicaid rolls. Right now, many of those adults go to the emergency room when they need care. Not only is the cost of care in that setting inordinately expensive, but hospitals are rarely paid for delivering it. The loss is enormous; more than $100 million per year for Dartmouth-Hitchcock Medical Center alone. The bill for uncompensated care must either be written off or passed on to insured patients and their employers in the form of higher premiums. If Medicaid is expanded, hospitals will see their losses from uncompensated care shrink dramatically, as will the need to shift costs to the insured.

Savings will come simply from removing the financial barrier that keeps low-income people from seeking medical care until they’re really ill and treatment is costly. More money will be saved because when more of the poor have access to care whose cost is borne largely by the federal government, state spending on public health services should shrink. The switch to managed care for most of the state’s Medicaid population is also expected to reduce health care spending. That transition, and the savings that should result, will be threatened if Medicaid isn’t expanded, since the companies offering coverage were figuring the bigger insurance pool into their calculations.

It’s possible that the combined savings from expanding Medicaid could exceed the state’s share of the cost of the expansion. Lawmakers would be foolish not to do the right thing by low-income residents and expand coverage, especially when doing so has the potential to save money and lives.