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My Turn: Medicaid expansion is no way to run a state

For the Monitor
Last modified: 2/27/2016 1:05:00 AM
Right now, the New Hampshire House is considering reauthorizing Medicaid expansion under Obamacare. Doing so would be a big mistake that our state simply cannot afford to make.

In 2014, New Hampshire expanded its Medicaid program under the Affordable Care Act. Previously, to qualify for Medicaid a person needed to be both poor and medically needy (pregnant women, children or disabled). Under Medicaid expansion, a person needs only to be below 138 percent of the federal poverty level. That means that able-bodied adults, even above the poverty line, would have taxpayers buy health insurance for them.

The measure that was passed in 2014 ends on Dec. 31, 2016. That means that if the program is not reauthorized, eligible able-bodied adults would no longer have taxpayer-funded health insurance.

The reauthorization bill currently sits before the House Finance Committee to make sure our Medicaid policy is on a solid financial footing. Given the total size of the program – close to $500 million per year – this seems like a prudent step.

The reauthorization bill relies on three funding mechanisms: Federal taxpayer funding, diverted insurance premium taxes, and voluntary contributions by hospitals and health insurance companies. These three components make up the “funding stool” for expanded Medicaid under Obamacare.

Federal funding, which started at 100 percent of the program cost in 2014 to encourage states to participate, drops to 90 percent by 2021. This makes up the first leg of this “funding stool.” In 2017, the federal share will be 95 percent, amounting to over $400 million.

These dollars are used to purchase “silver” health insurance plans for the expanded population of roughly 50,000. The insurance tax payments for these plans would add up to $9 million. This makes up the second leg of this “funding stool.” The final leg of the “funding stool” is made up of voluntary donations from New Hampshire hospitals and health insurance companies. The value of voluntary donations will be used to fund the rest of the non-federal share.

In the world of finance, all of these funding sources would be considered temporary.

The federal government has already signaled that funding for this program is contingent on partisan battles taking place in the House and Senate. Both the House and Senate have voted to end funding. Moreover, House Speaker Paul Ryan has said that the high federal matching rate is unsustainable. If the federal funding ends or drops, that also means an end to the premium tax revenue for the state. It’s clear that both of these funding sources are, at best, contingent.

The third funding source, voluntary contributions by hospitals and health insurance companies, is also temporary. Hospitals and health insurance companies have committed to these voluntary contributions only for two years, until 2018.

When one considers these factors, the “funding stool” for expanded Medicaid looks pretty shaky. It is as if the state were entering into a mortgage that has a balloon payment due in 2018 and there is no plan for how we will make the payments after that.

Fool me once, shame on you. Fool me twice, shame on me.

Some argue that if we cannot come up with another funding mechanism that Obamacare Medicaid expansion will simply cease. We were told the same thing in 2013 when it was initially authorized. It is also in direct contradiction to those arguing for reauthorization today. Those same voices say that it would be immoral to give people health insurance and then take it away. If it were immoral today, would it not be immoral in 2018, after they have had the benefit for four years and not just two years?

Those pushing for reauthorization are scrambling to find a way to make this program permanent. Yet, they continue to offer only temporary funding options. Let’s not pretend that they view extending Medicaid as a temporary program. Let’s have an honest debate about whether it truly is good for New Hampshire, including how the state would fund this program long term.

As a member of the House Finance Committee, it is my job to look out for the finances of the state and the taxpayers. If I were advising an individual or a business about a deal like expanded Medicaid, I would point out the shaky financial footing and tell them to be very wary. I encourage the state to do the same. While it’s a bad idea to give taxpayer-funded health insurance to able-bodied adults, it’s even worse to do so without a sound funding source in place.

(Rep. Frank Edelblut, a Wilton Republican, is a candidate for governor.)


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