Editorial: A financial stress test for New Hampshire

Sunday, September 24, 2017

New Hampshire is like a patient awaiting the results of a biopsy and a stress test. The Republican-controlled U.S. Senate has just six days left to all but undo the Affordable Care Act by a simple majority vote. The act now provides health insurance for some 20 million Americans, including more than 50,000 New Hampshire residents. The current repeal, like its predecessors, deserves to fail.

The bill, named for its prime sponsors, South Carolina Sen. Lindsey Graham and Louisiana Sen. Bill Cassidy, is even meaner and more harmful than previous repeal proposals. It takes insurance coverage away from millions of low- and moderate-income citizens, cuts federal funding for health care and shifts billions in federal funds from states that expanded access to Medicaid to states that didn’t. That means largely from blue states to red, from states that voted for Hillary Clinton to states that voted for Donald Trump.

Though he’s declared himself no fan of Obamacare, Gov. Chris Sununu and fellow Republican governors John Kasich of Ohio and Charlie Baker of Massachusetts oppose the bill because it would cost their states money. Lots of money. New Hampshire would lose $1 billion in federal revenue between 2020 and 2026 which could force the state to, horror of horrors, consider the imposition of a sales or income tax, Sununu said. The alternative, of course, would be to reduce Medicaid benefits, raise eligibility levels and insure fewer people.

The biopsy results will come when or if the Senate votes next week. The vote, if held, will be close, but indications are the bill will fail and the Affordable Care Act will remain in place. Then comes the stress test.

So far, the federal government has paid 95 percent of the cost of covering an additional 50,000 New Hampshirites under Medicaid. Voluntary contributions from hospitals make up most of the 5 percent remainder. State taxpayers have had a free ride. Hospitals agreed to donate because the contribution represents only a portion of the savings they achieved through a reduction in unnecessary emergency room usage and fewer bills left unpaid by the uninsured.

The legality of the hospital donations, under federal Medicaid rules, has been called into question. But that’s only part of the problem. In 2020 the federal contribution drops to 90 percent. Currently the state’s share amounts to about $40 million every two years. That figure will at least double. It’s unlikely that voluntary contributions can or will make up the difference. That’s the stress test.

The state is also suffering an opioid epidemic that’s added to medical, judicial and social service system costs. Among them are the need to care for the neglected children of addicted parents. The state is working to meet its agreement with the Justice Department to expand access to mental health treatment, and it needs to find a way to adequately care for people with severe medical and behavioral disabilities. The Department of Health and Human Services, the state’s largest agency, has suffered repeated budget cuts and is understaffed. Its Division of Youth and Children rarely has more than two-thirds of the staff it needs to safeguard the state’s children.

Add the unmet needs of the corrections system, the need to replace the state’s aging infrastructure and the possibility of renewed litigation over inequitable school funding, and the bill grows. The state faces a big problem. Policy makers and the Legislature should begin the public debate over how to solve it now.