A great Affordable Care Act flashpoint has been the volatility of insurance premiums. Premiums – along with out-of-pocket costs like deductibles – have increased sharply. Risk drives costs, even if partisans disagree over what’s driving risk.
It’s against this backdrop that an ongoing New Hampshire experiment must be assessed. Years ago, a law was passed requiring that Medicaid be managed by private insurers. This seemed a reasonable way of managing Medicaid expansion that was beyond the capacity of the short-staffed Department of Health and Human Services to administer itself.
This experiment has had complications; principally ballooning managed care costs. An emergency May bailout was required for DHHS, driven by an unanticipated $24 million in higher rates, and $10 million in higher caseload. Despite these unexpected increases, some, in looking at this, would quote the old Bobby McFerrin song, “Don’t Worry, Be Happy.” They would double-down on this experiment to immediately cover long-term care as well.
Mercifully, prudence has prevailed in the Legislature. Last year a bill, Senate Bill 553, was passed into law requiring the state look before it leaps. A working group was created to study how best to integrate long-term care services into managed care. This year the Legislature passed into law a bill, Senate Bill 155, postponing this integration until July 1, 2019, and setting up a study by the New Hampshire Association of Counties of a possible alternative.
Back to risk driving costs. Were managed care expanded to cover long-term care, it would encompass a population guaranteed to have health issues – the elderly and those with disabilities. This has created problems in other states, like Iowa. There managed care companies signed contracts, immediately complained they were losing money, then dealt with unexpected costs by failing to pay providers, refusing even to pay for wheelchairs, and holding the state hostage for ransom. Secret negotiations are ongoing over payments retroactive to July 1. The system itself was designed in utter secrecy by the current head of the Centers for Medicare and Medicaid Services, Seema Verma. Newspapers have been denied access to the calculations used by the state’s actuarial consultant (the same one used by New Hampshire).
Further, what are the benefits to managed care? Some will say cost control, but how would interjecting out-of-state intermediaries reduce cost? New Hampshire already avoids cost. Its payment rates cover only 64.4 percent of nursing home Medicaid care costs, before a provider assessment makes up some of the shortfall. In the eight years since July 1, 2009, nursing home rates have gone up 7.1 percent, or roughly half of inflation. Meanwhile, the stock of the leading managed care insurer doing business here has gone up over 900 percent over that same period.
Home- and community-based services, or HCBS, are similarly starved. Assisted-living rates have been stuck at $49 a day. Home care wages are stagnant due to Medicaid underfunding. Some claim managed care can “rebalance” a system weighted toward nursing home care. No evidence supports this. New Hampshire has the nation’s second-oldest population. Those in nursing homes need their care. Rectifying HCBS underfunding doesn’t require robbing underfunded Peter to pay underfunded Paul, or shipping money out of state – it just requires leadership.
Without managed care, Oregon, spending the highest proportion on HCBS, also spends more than $100 per day more on each nursing home resident than does New Hampshire.
If nothing else, the ACA should have taught us some lessons about keeping our eyes open in making public policy. Time will tell if New Hampshire learned anything.
(Brendan Williams is the president and CEO of the New Hampshire Health Care Association.)