Editorial: State’s position on Medicaid is murky
Talk about incoherent!
Republicans at the State House have been trying as hard as they can to resist a common-sense plan to expand Medicaid eligibility in the state on the federal dime. Among their arguments: We don’t want to be beholden to the feds. We don’t trust them to keep their word. What if they renege on promises to pay up? What if Medicaid isn’t the best option for New Hampshire’s poor and uninsured residents? New Hampshire can go it alone!
But over in another corner of the capitol, legislators are contemplating a scheme to get even more money from the federal Medicaid program, at the expense of U.S. taxpayers and, perhaps, local medical facilities.
These seemingly conflicting impulses were on display this week in two separate hearings.
First, on Tuesday, the commission wrestling with Medicaid expansion heard a proposal by which New Hampshire would say no to the federal offer made as part of the Affordable Care Act and, instead, set up its own system of insuring a subset of those who would have been covered under the ACA version.
The plan, presented by Avik Roy, a senior fellow at the Manhattan Institute, would be fully state-funded, with no federal involvement. In 2022 it would cost the state $46 million and provide coverage for 11,500 people. (The ACA alternative would have the federal government pay the full cost of enrolling about 58,000 people for the first three years of the program; after that, the federal portion drops to 90 percent of the cost.)
The annual premium cost for an individual under Roy’s plan would be about $412, plus a $5,950 deductible. The state would assume the rest of the costs, including a $100 monthly payment to a primary care provider.
In other words: a big cost to the state, a less generous plan and coverage for fewer people.
It’s hard to understand the appeal of such a proposal unless the idea of joining forces with President Obama is so repellent to GOP legislators that they’re willing to embrace anything, rather than acknowledge that Medicaid expansion might just make sense for their constituents.
But if New Hampshire is so Medicaid-averse, what are we to make of the meeting that went on Wednesday, the one in which lawmakers considered plans in which it could broaden its hospital tax – perhaps greatly – in order to generate new revenue and, presumably, attract federal Medicaid matching money in the process?
At issue is a program called “Mediscam” in less polite circles. In New Hampshire, it’s been around for more than two decades. For 20 years it worked like this: The state taxed the hospitals so it could gain matching Medicaid money to pay for caring for the poor – not to mention other general government needs. The state then turned around and reimbursed the hospitals in full for their tax payments. So the hospitals weren’t hurt, and the state got a federal Medicaid bonanza. That changed in 2011 when the feds said states could no longer simply give hospitals all their money back; instead they had to distribute it according to a formula that actually took into account hospitals’ Medicaid costs. And then the Legislature went even further: maintaining the tax but cutting Medicaid funding to the hospitals by more than $130 million which, inevitably, led to a lawsuit.
Amid all this, lawmakers learned this week that they have been relatively conservative when it comes to Medicaid taxation. Turns out, the federal government allows states to apply hospital taxes to 19 categories, but New Hampshire is taxing just two: inpatient and outpatient hospital net revenue. Among the categories not captured by the current state tax: physician services and ambulatory surgical centers. And there may well be some crazy logic to broadening the state tax: Hospitals, after all, are being taxed these days for services that go untaxed if provided elsewhere.
In other words, the federal Medicaid program makes good sense when it gives New Hampshire a way to generate revenue and avoid more straightforward, more fair taxation.
But when Medicaid is to be used as a way to expand health care coverage to the uninsured, New Hampshire has a problem with that.
Is it any wonder Americans are having trouble understanding their so-called health care system?