Editorial: State’s economy depends on Medicaid expansion

Last modified: 4/7/2015 12:25:57 AM
By 2017, its estimated that up to 55,000 New Hampshire residents, most of them previously uninsured, will be receiving health care coverage thanks to the state’s expanded Medicaid program. If lawmakers don’t reauthorize participation in the federal program, those people, more than the combined populations of Portsmouth and Rochester, will lose health insurance. If not resolved before then, the issue will be the most important factor in the 2016 state elections.

Gov. Hassan wants the program to continue and could veto a state budget that doesn’t include it. We would encourage her to do so.

The Medicaid expansion, which for the first time made adults without a disability eligible for coverage if they were poor enough, should be continued. It’s the moral thing to do of course, but morality aside, rejecting the $400 million per year in federal money that comes with Medicaid expansion would cost the state jobs, slow economic growth, and raise the premiums individuals and employers pay for health insurance.

Now is the time for all voters to let their state representatives or senators know that they support expansion because in some ways, the state’s economy depends on it.

The federal government, under the Affordable Care Act, currently pays 100 percent of the cost of adding someone to the rolls of the insured under the expanded Medicaid program. Federal support will then slowly decline, from 100 percent to 95-93-92 and finally 90 percent in 2020. Participation in the program is a great deal for states now, and it will still be a great deal at 90 percent federal rate of the future. Why? Because state costs will be offset in great measure or in full by savings in other sectors of state spending and in increased revenue.

If expansion isn’t reauthorized – the obstacle being House Republicans – the state will fall short of the match it must provide for the last six months of participation. Gov. Hassan included $12 million in her budget to cover that shortfall, but that spending will be offset by $11 million in additional state revenue from its tax on insurance premiums and savings in the state and county corrections systems.

Reauthorize the program and the state will be on the hook for 10 percent of its cost. Subtract from that 10 percent, however:

∎  Higher take in insurance premium taxes and lower hospital losses from care given patients who can’t pay, for which the state kicks in a share.

∎ Lower emergency room costs and losses. ER visits declined by 17 percent in the last quarter because more people had insurance.

∎ Growing corrections system savings if released inmates continue to receive mental health and substance abuse treatment on the outside, and thus don’t re-offend and return.

∎ Higher productivity from low-income workers who receive health care.

∎ Higher business profits and enterprise taxes, since much of the $400 million in federal funds will create jobs and go for health care workers who will spend it locally.

No expert, as far as we know, has crunched the numbers to provide a realistic estimate of what New Hampshire’s ultimate cost to insure low-income residents would be, but here’s what efforts in some other states found.

Colorado’s health foundation estimated that $4.4 billion in additional state economic activity will occur, increasing the state’s gross domestic product by 0.74 percent. “In each year, the combination of the additional revenue generated from the larger economy and savings in other general fund programs is sufficient to fund the state’s share of the cost of Medicaid expansion,” the study concluded.

In Pennsylvania, a Rand Corporation study estimated that 350,000 people will gain insurance, $2 billion of federal money will flow into the state every year, and savings from hospital uncompensated care alone will more than the cover the state’s cost of expanding Medicaid.

New Hampshire lawmakers can reauthorize the Medicaid expansion, do a lot of good for a lot of people and boost the economy, or cast a vote that means New Hampshire residents will get even less of their tax money back from Washington. What they do should determine how their constituents vote.

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