By Parker Bolt

February 2014

In New Hampshire, the state’s Medicaid program is designed for parents, children, elderly and the disabled who meet certain financial guidelines. Every year, the state spends 39% ($2.1 billion) of its state budget on healthcare and social services, of which $700 million state funds go to Medicaid.  In comparison, California spends only 33% of its budget providing the same services with a population 29 times bigger than New Hampshire. California provides Medicaid for approximately 30% (6.8 million people) of its population[1], while N.H. provides for around 10% (137,000 participants) of its population.[2]

The Cost of Expansion:

To fully expand Medicaid in NH according to the Affordable Care Act, over seven years it would cost the state an additional $85 million dollars, but it is critical to break down this number on a yearly basis. The first two years save New Hampshire $10 million; this is the period that the Federal government pays 100% of Medicaid costs. After this though, the state first pays 5%, then 10% of the cost. Year six will cost New Hampshire $27 million, and when N.H. settles into its 10% share of the pay in year seven, the cost will be at least $40 million annually[3]. Conversely, if Medicaid is not expanded, over seven years, New Hampshire’s Medicaid costs would be reduced by $65 million-a swing of $150 million. It may not sound like a big increase but considering how much N.H. already spends on Medicaid as a percentage of its annual operating budget (which is 13%), $85 million is quite a large sum. The first 5 years are designed to entice a state into expansion, with savings for the first two years or so, gradually increasing a state’s share to 10% in the seventh year. Looking beyond seven years, the $40 million yearly cost is not simply a onetime expense but a permanent annual increase.

Lessons from Arizona and Maine:

A number of states have previously expanded Medicaid, but Arizona’s and Maine’s expansions are of particular interest because they expanded to the same population of childless adults that Medicaid expansion under the ACA seeks to cover. (Arizona and Maine expanded to 100% of Federal Poverty Level (FPL)[4] while ACA expansion covers up to 138% of FPL.)

When Arizona decided to expand Medicaid in 2000, it estimated that it would cost $2 billion based upon an estimated number of additional enrollees over a ten year period. In 2010, Arizona expected 47,000 parents to enroll; instead, 150,000 enrolled. They also estimated 75,000 childless adults to enroll in the same year, instead 206,000 enrolled[5]. Expansion cost $8.4 billion, just between 2002 and 2008 alone. Childless adults, who are a large part of the population that would be eligible, cost between two and four times as much as parents and children. All of this occurred, even though Arizona also only raised the Medicaid eligibility level to 100% of the FPL as opposed to 138% current proposed.

Arizona spent four times the originally estimated cost and received three times the estimated enrollment, yet the number of uninsured did not drop from pre-expansion levels. In fact, from 2005 to 2010 the number of uninsured actually increased[6]. However, the percentage of the population covered by private insurance sank from 62% in 2002, to 56% in 2010; while Medicaid coverage increased from 13% to 20%.

Similarly, after expansion, Maine’s percentage of population on private insurance dropped from 66% in 2002 to 59% by 2010, while Medicaid rose, and the uninsured stayed at its 2002 levels. Maine’s budget could not sustain the number of Medicaid enrollees, and there are 24,000 people on a waiting list for coverage under the program. Both Maine and Arizona saw a 7 percentage point decrease in coverage by private insurance, and a corresponding 7% percentage point increase in Medicaid. This means that the increase in Medicaid enrollments came from individuals who dropped private insurance and switched to Medicaid, not from the ranks of the uninsured. This phenomenon is referred to as the “Crowd Out Effect.” Of course, the intended purpose of Medicaid expansion is to provide coverage for the uninsured, not to shift people off of private coverage and onto government coverage.

Some argue that if the rate of uninsured by decreased even a single percentage point, then the cost would be worth it, however, in neither Arizona nor Maine did the uninsured decline. Both states independently expanded Medicaid, with the virtuous goal of expanding coverage to the uninsured population, yet both greatly underestimated the cost and were rewarded with a 7% percentage point decrease in the privately insured and no change in the rate of uninsured.


There are four main points for New Hampshire legislators should ponder when assessing whether to expand Medicaid. First, the cost to New Hampshire must be considered by looking at year seven and beyond and by planning for increased costs due to Crowd Out. The best method to do this is to measure the increased costs and enrollments in Arizona and Maine and to increase our projections accordingly. Secondly, the problem of Crowd Out needs mitigated. Third, what if Medicaid Expansion proves to be unsuccessful? Once the government has promised people access to Medicaid, they cannot in good faith deny them. In practice repealing or scaling-back Medicaid expansion in a state is near impossible, hence we should consider Medicaid expansion permanent. Fourth, can Medicaid Expansion even accomplish its goal? Arizona and Maine did not expand as far as the ACA requirements, and still they encountered greatly increased costs with no drop in the rate of uninsured to show for it. Given the results in Arizona and Maine, the Expanded Medicaid does not accomplish its goal.



[3]Lewin Group. An evaluation of the impact of Medicaid expansion n New Hampshire.

[4] Federal Poverty Level is $19,530 a year for a household of three, this is the 2013 level

[5]Medicaid Cure: Policy Brief #3. March 11,2013. Medicaid expansion: We already know how this story ends.

[6] Medicaid Cure: Policy Brief #3. March 11,2013. Medicaid expansion: We already know how this story ends.



Charlie Arlinghaus

February 26, 2014

As originally published in the New Hampshire Union Leader

Some supporters of the Senate Medicaid Expansion Plan would have you believe the only two choices are their non-compromise and just saying no. As is typical, the reality is far more complicated. Most conservative opponents of the Senate’s Medicaid Expansion are more than willing to support a real compromise and have a more detailed knowledge of the plan and therefore its flaws than the public statements of some sponsors indicate they do.

A more detailed knowledge of the program suggests how and where compromise really is possible. The most obvious place is in the area of waivers. Senate Medicaid Expansion is best thought of as adopting the same program the governor proposed for a two year bridge period with the hope of changing it but only if the federal government grants us permission.

Sponsors of the program have claimed they can’t support the governor’s proposed expansion but can support the program the federal government may or may not approve.

Most conservatives believe that starting a program before the waiver is approved eliminates any real negotiating power with the federal government and then locks us into a program that will always be reauthorized because of irresistible political pressure. No significant social benefit program can be reversed.

Supporters are confident their program will be approved. But remember that we are asking the federal government to pay New Hampshire 100% of the costs of our program or the program won’t continue after December 2016 (see section XXV-c). In 49 other states the feds will only pay 90% so to continue the program we would be asking the feds to do something they can’t do. I’m all in favor of asking for anything but the feds have already turned down this request and can not realistically ever approve such disparate treatment.

Knowing that, we know with as much certainty as we can in a situation like this that the waiver will not be approved, at least not beyond the first year. So we are adopting the governor’s preferred expansion with no real concessions to conservatives about who is covered, the total size of Medicaid in the state, or how the benefits are administered.

In two years, the legislature will be asked to reauthorize a program that is providing health benefits to between 50 and 80,000 people. We will be told they tried to do something better and couldn’t but now we have no choice.

Why would it not be better to ask for all waivers up front? The plan is essentially a replication of Iowa’s. Iowa did not expand until the waiver was received. If the federal government had rejected any important component, Iowa would not have proceeded. That is clearly a stronger negotiating position that adopting something the federal government prefers and then hoping they’ll give us permission to make changes they and that are not being detailed.

Time is not that big an issue here. Iowa’s waiver took seven months from the bill’s passage even though they had to write a waiver from scratch with no examples to follow and the federal government had to rule on something they hadn’t seen before. In our case, we’re merely piggy-backing and the feds have seen every component of what we want before. Further, it is a poorly kept secret that the administration has been having informal conversations with the feds for months.

The second obvious area of compromise is in enrollment numbers. At this point, virtually everyone agrees that there ought to be a safety net. Most of us are willing to see Medicaid changed into a program with income based targeting of the benefit instead of categorical targeting. But the Senate Medicaid Expansion will increase the number of our citizens under Medicaid-funded social welfare programs from 135,000 to, by my estimate, 217,000 – an increase in the program’s size of more than half.

Would it not be reasonable to target the resources to the poorest 135,000 people? The governor showed us the way with her treatment of the breast cancer eligibility. Everyone in that program over 138% of federal poverty would receive the sliding scale subsidy offered by the exchange while those below would remain Medicaid eligible. If this same principle were applied to other populations it would alleviate much of the conservative concern about an enormous expansion of a dependency culture.

Almost no conservative of any variety would have any quibble with a decision to cover the same number of people but target that coverage to the lowest income levels.

A real compromise is still possible and desirable. But it has to acknowledge at the start that the current proposals is mistaken in not asking for waivers up front, in not endorsing any cost sharing measures, and in not redirecting resources instead of just expanding. While any conservative could support real compromise, no conservative of any shade or stripe can embrace the lack of compromise called Senate Medicaid Expansion.

Without a doubt, Medicaid is the biggest issue this session in Concord. We have collected all of our work on the issue, as well as from like minded friends, to serve as a one stop shop on this complex issue.


Recent Columns:

A Real Compromise On Medicaid Expansion is Still Possible

Advice from Maine: Don’t Follow Our Lead on Medicaid Expansion

Wrong Policy for New Hampshire at the Wrong Time

Medicaid Expansion is Bad Medicine for New Hampshire

State Medicaid Plan in Not as Advertised

The Medicaid Compromise that Isn’t


Text of Bill Currently Under Consideration:

Senate Bill 413

Senate Bill 413 Status Docket


Oregon Medicaid Study Findings:

Several years ago, researchers were recently given the rare opportunity to study the effectiveness of Medicaid Expansion. Oregon opted to expand its Medicaid program to include some low income, uninsured adults. However, funds were only available to enroll only a portion of those eligible, so roughly 10,000 individuals were chosen by random lottery to receive coverage. While unintended as such, these conditions laid the groundwork to conduct a scientific study of the efficacy of Medicaid by creating a randomly selected sample (those chosen) with an established control group (those not chosen).

Medicaid Expansion Leads to Increased ER Usage

Medicaid Expansion: Little Bang for the Buck


Older Columns: (Note: May refer to older proposals)

Glitch Makes Republican Plan the Same as the Democrats

On Medicaid: A Tale of Two Commissions

Finding Common Ground on Medicaid Expansion will be Hard


Kenneth Fredette

Maine House Republican Leader

March 1, 2014

As originally published in the Concord Monitor

When I heard that the Great State of New Hampshire was considering an expansion of its Medicaid program under ObamaCare, the first thought I had was of a quote from Dante’s “Inferno”: “Abandon all hope, ye who enter here.”

I say this as the Republican Leader in the Maine House of Representatives and as someone who has served on my state’s Appropriations Committee, where we spent countless late nights trying to patch the Medicaid-induced leaks in our state budget after past expansions.

Maine and New Hampshire are two very similar states in terms of geography, culture, and population size.  They are two very different states, however, in terms of economic policy.  It wasn’t always this way.  Decades ago, Maine took a decidedly sharp left turn, heading in the direction of more government programs and higher taxation.  New Hampshire avoided the income tax, the welfare state, and other trappings of big government.

Despite starting out in similar situations decades ago with roughly equally-sized private sector economies, New Hampshire has rapidly outpaced Maine according to almost every economic indicator.

New Hampshire’s median household income is about $65,000 to Maine’s $48,000.  Your unemployment rate has been among the lowest in the country since the recession.  Liberals in Maine like to tout welfare programs that are designed to reduce poverty, but our poverty rate is 58 percent higher than yours, despite Maine ranking second in the nation for welfare spending as a percentage of overall state spending.

It’s interesting how liberals in Maine make excuses for New Hampshire’s success while liberals in New Hampshire make excuses for Maine’s failures.

We’ve made a lot of positive changes here in Maine thanks to Gov. Paul LePage and a Republican legislative majority in 2011-2012.  Those reforms began to lower taxes, trim regulations, reform welfare, and bring some fiscal sanity to Augusta, and people are starting to take notice.  But there’s a long way to go.

Mainers are hardworking and independent-minded people, and they’re sick of economic stagnation.  I’m confident we’ll stay on the right track.

In fact, our competitive advantage with your state would be greatly enhanced if we managed to resist ObamaCare’s welfare expansion while you embrace it.

Over the past 10-20 years, Maine has taken the bait of federal matching funds and expanded its Medicaid program considerably while New Hampshire has declined the money and its attached strings.

All of the promises of Medicaid expansion have fallen flat.  Emergency room usage goes up, not down, with Medicaid coverage.  Charity care provided by our hospitals has tripled.  Federal matching rates have been slashed.  Physical health outcomes are no better.  Cost and enrollment levels were not manageable; instead, expansion shattered its original cost estimates.

What this has meant for Maine’s budget, taxpayers, and economy is very tangible.  Maine’s total income tax revenues collected equal the difference in cost between Maine’s and New Hampshire’s public welfare departments.  So if our DHHS was the size of yours, we could eliminate our income tax.

Medicaid’s share of the state budget has doubled since 1998 and now sits at 25 percent of all state spending.  By 2024, medical welfare will consume 36 percent of our budget.  State aid to municipalities is under siege, taxes continue to go up, and politicians have even raided oil spill cleanup funds to plug the perennial budget gap in our Medicaid program.

I understand that the proposal currently being considered in Concord uses federal Medicaid expansion funds to expand subsidized private coverage on the exchange.

That’s a better deal than the one originally offered by the feds under ObamaCare, and you can credit Republican leaders in your state’s senate with that.

But it’s still an expansion of state government and a major strain on taxpayers over the long term, similar to what we’ve experience in Maine, and I would caution you to avoid it.

The most important thing to remember, as citizens of the Granite State, is that the “New Hampshire Advantage” is not by accident; it is by design.  Your elected officials have made good economic decisions over the years and it has paid off.

Maine has gone down the path of Medicaid expansion before.  Take it from me.  You don’t want to follow us.

Michael and James Sununu

March 3, 2014

As originally published in the Nashua Telegraph

Politics and governing aren’t the same thing, but they are inevitably intertwined. As much as we would like otherwise, political considerations often drive policy decisions. Sometimes the repercussions are small. In the pending decision over Medicaid expansion, however, the stakes are huge and it would be a serious mistake for Republicans in the state Senate to make this a political decision. The potential for the largest-ever expansion of state government should be considered only on the merits of “Is this good public policy?” Unfortunately, in the face of significant evidence that this policy will not work, it looks like the strongest driving force on this issue for the Senate GOP is that, politically, “we need to do something.”

Republicans champion individual freedom and limited government that intervenes only when necessary. Our policy decisions should reflect this. We fight expansion of the welfare state because it makes people more dependent on government and creates perverse incentives against work, independence and income mobility. But Senate Republicans appear to be on the abyss of enabling a new and significant round of dependency, one that will still not solve the problem at hand.

Supporters of expansion say we have to reduce the uninsured population. They argue the cost of the uninsured is too high and by insuring them through the government (albeit through taxpayer support for private insurance premiums) we will lower the overall cost of health care. Except available evidence shows us it doesn’t work. Maine expanded Medicaid coverage in 2002 for the same reason, but it was a huge failure. Before expansion, 12 percent of their population was uninsured. After Medicaid expansion? Still, 12 percent uninsured. Markets adjust when government gets more involved, so while Medicaid rolls expanded, private insurance rolls fell, costing taxpayers and businesses more money.

Another argument for Medicaid Expansion is to reduce emergency room visits, increase preventative care all while lowering the overall cost of health care. Again, the evidence doesn’t support this claim. A recent study published in the journal Science reached the opposite conclusion. Economists at MIT and Harvard studied Oregon’s Medicaid experiment. They compared similar populations, part of which “won” the lottery to enroll in Medicaid and part that remained uninsured. They found that expanding Medicaid “generated no significant improvement in measured health outcomes”.

More importantly, the study also found that emergency room use increased among those added to Medicaid, exactly the opposite of the desired outcome.

Proponents of expansion in New Hampshire will argue their plan is different because they support the use of private insurance. But once the market adjusts, we could end up with undesirable outcomes and no real net benefit, at the cost of tens or hundreds of millions of dollars.

It is puzzling that hospitals and many in the business community are supportive of this expansion. Hospitals are mired in their own battles over uncompensated care, the Medicaid Enhancement Tax, and low reimbursement rates. Yet somehow shifting tens of thousands of patients from private insurance to a system with lower reimbursements is going to help matters? And the business community should certainly know better than to support any large-scale expansion of government. When the program costs more than projected, or the federal government fails to meet its obligations, where do businesses think the state will turn for more revenue?

The notion that “we need to do something” seems to have been hatched and nurtured inside Concord’s version of the Beltway. The first attempt at Medicaid Expansion died last year, and there was hardly an outcry from the general public. Yet Senate Republicans still feel they have to pass a “compromise” that is in reality a bad deal. What’s worse is that in the future, if the program doesn’t live up to expectations it will be almost impossible to pull the plug. A sunset provision is nice, but only if you have the nerve to let it sunset – and political “Profiles in Courage” are pretty scarce in Concord these days.

For the sake of argument, though, let’s add some political context. In 2012, the Republican nominee for President was in the difficult position of having supported a large government intervention into health care in his state and could not aggressively attack Obamacare. But the unfolding Obamacare disaster will be front and center in the 2014 elections. New Hampshire Republicans should be pointing out the folly of large-scale interventions in health care, not strapping themselves to the mast of a sinking ship because they are afraid Ray Buckley will accuse them of class warfare. Bulletin: Ray Buckley will accuse Republicans of that no matter what.

New Hampshire’s corner office has lacked leadership and direction for far too long. Senate Republicans have often been the only bulwark against bad public policy, and deserve credit for such victories as a responsible budget and limiting regulatory overreach. They should continue this approach with Medicaid expansion and say “not this policy, not right now.”

Josh Elliott-Traficante

February 2014

January saw 5,417 Granite Staters select an insurance policy on the federal exchange. Since open enrollment began in October a total of 16,863 have selected coverage.

The Department of Health and Human Services with each successive monthly report continues to add more demographic data, giving a more detailed look at the insurance pool and what type of coverage they have purchased.

Plans Purchased:

Looking at the different polices purchased (Bronze, Silver, Gold, Platinum, Catastrophic) there has been very little change in percentages of each since last month’s report. The January numbers however, seem to indicate a shift, albeit minor, towards the less expensive plans.






New Hampshire






Change over Dec







A Demographic Look:

A possible cause for this trend towards the lower metal levels may be a result of a marginally more youthful pool. New Hampshire pool saw small up ticks in the proportional size of the 18-25 and 35-44 cohorts, with a corresponding decrease in the 55-64 cohort over last month. The all-important 18-34 cohort saw its share of the total pool increase a single percentage point to 23%. This reflects trends nationally, which also saw the share of 18-34 cohort increase by a single percentage point to 25%. Despite this improvement, this still leaves the 18-34 cohort well behind of the intended goal of it making up 40% of the pool.









New Hampshire









Change over Dec[ii]











The percentage receiving subsidies for coverage increased slight to 74%, up from 72%. That translates to 12,450 receiving a subsidy, while 7,610 are not.

For the first time, the Department of Health and Human Services has included subsidy data, cross referenced with plan level. For those who did not qualify for subsidies, there was roughly an equal distribution between the three metal plans, with a small number opting for a catastrophic plan.[iii] In contrast, those receiving subsidies overwhelming chose Silver level plans over the other three options. This is not unique to New Hampshire but a national trend.

One possible cause the Cost Sharing Subsidy, which reduces the co-pays, deductibles and out of pocket limits of the insurance plans. In order to qualify for the subsidy, one must be below 250% of the federal poverty limit and purchase a Silver level plan. This type of incentive would naturally make the Silver level plan a much more attractive option over the other three options.

New Hampshire





With Subsidies





Without Subsidies





[i] Note: Anthem does not offer any Platinum level plans in New Hampshire

[ii] Note: Percentages may not equal 100% due to rounding

[iii] Note: Catastrophic level plans are only available for purchase by those age 30 and below.

John Stephen

February 12, 2014

As originally published in the New Hampshire Union Leader

The recently announced deal in the New Hampshire Senate of a “framework” to expand Medicaid is a bad deal for our state’s future. The fundamental problem is not just that the plan implements a key component of Obamacare here, but it continues to build on a profoundly flawed Medicaid program desperately in need of reform.

Medicaid, in its current form, is a bulky, inefficient program that hasn’t kept up with the times. It was created in 1964 and, like most government programs, simply hasn’t evolved as proficiently as other market-driven products. Other than Corvettes, pretty much everything we buy today is better and less expensive than the 1964 counterparts, but Medicaid’s basic identity hasn’t changed, and that’s a real problem.

For starters, Medicaid’s incentives are poorly aligned with the reality of the marketplace.

In 1964, the program was put in place to provide some compensation to doctors and hospitals for those who couldn’t pay their bills. However, these same providers quickly viewed this new government program as a new payer. While states assumed that providers would be happy to get something for what had been charity care, the low reimbursement rates meant that many doctors would take Medicaid patients and hospitals would rapidly shuttle out Medicaid patients to make room for higher-paying customers.

That’s why no one should be surprised about the quality of Medicaid care. A study of Medicaid expansion in Oregon shows that Medicaid patients fare no better on health outcomes than the uninsured. Even more damning is a University of Virginia study that shows that Medicaid patients are 13 percent more likely to suffer serious negative outcomes as a result of surgery than the uninsured and 97 percent more likely than those on private insurance.

What keeps many from using the emergency room for routine medical issues is the high copayments that private insurance charges. Under Medicaid, though, states are not allowed to charge more than minuscule copays, which explains why a recent Harvard-MIT study showed that Medicaid patients increase their emergency room use by 40 percent over the uninsured.

The free market knows that incentives matter, and Medicaid shows us glaring examples of that, and why it should not be a model any state should follow.

There is a better way to care for the truly poor of the state than Medicaid expansion.

In 2008, I worked with Rhode Island on what remains the most innovative Medicaid waiver that the federal government has ever granted. The waiver did not expand Medicaid, but allowed the state unprecedented flexibility to manage its program — for example, spending more on community care rather than expensive nursing home care. As a result, Rhode Island has since reduced Medicaid spending by more than $2 billion.

Instead of trying to force the state to implement an outdated, expensive expansion of Medicaid that would force tens of thousands of New Hampshire residents on a program that may lower their quality of care, the state should use this opportunity to begin negotiations on a Medicaid waiver that would transform a broken program to one that could evolve with a changing health care landscape. Not only would this save considerable taxpayer money, but it would deliver higher quality outcomes for those involved.

The start of this effort is to send a clear and unequivocal announcement to the federal government that New Hampshire will not participate in Medicaid expansion under Obamacare. That is the only way that state leaders can gain leverage with a federal government that is focused on implementing President Obama’s signature policy initiative. Taking federal Obamacare funds means that we will need to continue with a broken, ineffective Medicaid program.

Then, the state must make clear that the only way in which New Hampshire will work with the federal government to offer coverage to the able-bodied adults that are covered under Obamacare is if the Obama administration is willing to give us the flexibility to find savings in Medicaid and use those funds to provide coverage for the 22,000 residents who could gain coverage in the process. Without this pressure, there is no way the federal government will back off its plans to bring a Washington solution to the Granite State.

The solution to our health care problems is not in more government, it is in bringing real innovation to a 1960s era program. It’s worked elsewhere, it can work here.

John Stephen of Manchester is the former state commissioner of health and human services and 2010 Republican nominee for governor. He is the managing partner of the Stephen Group, a health care and government solutions firm.

Charlie Arlinghaus

February 19, 2014

As originally published in the New Hampshire Union Leader

The Senate Medicaid Expansion Plan was released this week so we could all see the details and find out that the spin and the reality of the program are not quite the same.

Let’s start by dismissing the assertion that this program is somehow a unique New Hampshire approach. That just isn’t so. Iowa passed this same Medicaid expansion plan last May and a few states have had similar ideas in the interim. The New Hampshire version differs in slight ways, none of which make it better.

Notably, Iowa passed a more detailed version of a plan and did not expand Medicaid until the federal government had approved the necessary waivers from federal rules. Making coverage contingent on waiver approval was an incentive for the federal government to act more quickly and to approve at least some changes that had previously been considered unlikely.

In contrast, New Hampshire intends to ask for a waiver – with important details to be filled in at a later date – but in the interim will adopt the same expansion plan the governor proposed as early as last July.

In Iowa’s negotiations with the federal government, the feds needed to approve changes they were not predisposed towards or else no one would be covered. In New Hampshire’s negotiations, we will adopt a plan that some lead sponsors don’t like but the federal government really likes and then ask them to approve changes they like a lot less. You can see why an experienced negotiator might not expect good results from our negotiate-from-weakness strategy.

The bill does say that if the federal overseers of Medicaid don’t approve the changes we want then, after two years of coverage, the program would technically expire and need to be reauthorized or else 50-80,000 would have their Medicaid coverage taken away from them.

No rational person honestly believes this expiration is anything but procedural. No legislature elected in recent memory of whatever partisan flavor could ever bring itself to cancel pre-existing benefits, especially health benefits, for such an enormous population. It will not ever happen and everyone knows that including federal regulators.

Public statements from sponsors describe the plan as having significant personal responsibility measures (like premiums and co-pays). But the plan doesn’t actually. The Iowa prototype included significant changes which required waivers, some of which were not allowed in the end.

In contrast, New Hampshire suggests co-pays be included “to the greatest extent practicable.” Practicable is never defined and we know in advance that state regulators are strongly opposed to just about every co-pay except one or two in nominal, non-incentive providing amounts. That makes them not practicable in their opinion. The bill pays lip service with the practical effect of no changes which helps explain why strong opponents of co-pays and cost-sharing are co-sponsoring the bill.

Some of the bill’s authors have implied that the new entitlement comes with a work requirement – recipients will be required to actively seek employment. Whatever their hope, it isn’t what the bill does. The actual bill merely says recipients “shall be referred to the Department of Employment Security.”  Those who are currently unemployed will be given the phone number of the state’s unemployment office – not exactly a work requirement.

Further, sponsors routinely describe the bill as providing a benefit to 50,000 people. That’s just plain wrong. The bill makes an estimated additional 100,650 people eligible. The analysis of a year ago suggested that 83% of the half of the eligible population without insurance would take the free coverage (I use their higher end estimate because we are now spending millions recruiting people to coverage which seems likely to be more effective than when we spent nothing).

That analysis estimated that only 12,000 of the half of the newly eligible with existing private coverage would cancel their current plan and switch to Medicaid. But the offer now is for them to keep their existing coverage and merely have the state pay all their premiums and co-pays – hardly invasive or inconvenient. A better estimate is that 80% of that population will permit the state to send them free money.

When sponsors say 50,000, replace that number with 80,000 and increase their cost estimates by 60%. I presume cost estimates, not yet available, will emerge sometime before Senators vote.

So the Senate poised to pass a plan to increase the state’s Medicaid population from 135,000 to 215,000 with no cost sharing requirements of note and to abandon any negotiating strength by adopting the federal government and governor’s preferred position as the default program beginning immediately.

Some people are better at compromise than others.

Charlie Arlinghaus

February 12, 2014

As originally published in the New Hampshire Union Leader

This week Republican Senate leadership announced a plan to significantly expand the state’s Medicaid program. While the deal was announced, the details are not yet available. Evaluating whether the deal involves any significant element of compromise or is just a slight variant of a dramatic expansion of the state’s Medicaid system depends on the details but early reports are not promising.

The federal health reform popularly known as ObamaCare or the ACA rests on three major components: individual and employer mandates to buy insurance, a regulatory and purchasing structure called an exchange (or sometimes confusingly referred to as a “marketplace”), and a roughly trillion dollar expansion of Mediciad.

One of the primary metrics to consider in any potential expansion plan is what the effect be on total Medicaid enrolment. Today Medicaid is not a program for all low income citizens. Instead Medicaid covers people only within certain categories (like children, certain disabled populations, pregnant women or women with breast or cervical cancer). Other low income categories of people, most notably single childless adults, are not covered at all.

The primary goal of Medicaid expansion it to change the program so it covers every low income person regardless of category. One compromise proposed has been to follow the Governor’s example. She proposed covering the lowest income Breast and Cervical Cancer patients through Medicaid and letting those eligible for exchange subsidies be covered instead through that federal program. The state program would be targeted to the lowest income levels while others would be shifted out of this particular program. A compromise might do such a thing but this one doesn’t.

In New Hampshire, prior to any expansion, average state monthly Medicaid enrollment was roughly 135,000 people or about 12% of the state’s population under the age of 65.The newly eligible population being considered for the expansion program amounts to 100,600 people according to the consultants hired by the state.

Oddly, elected officials like to describe the program as covering an additional 50,000 people. That public relations number assumes that only half of those eligible will take up the free health care being offered to them. In contrast, the Urban Institute found nationally that 72% of the currently eligible are actually enrolled in Medicaid. There aren’t New Hampshire specific numbers but certainly among children, the vast majority of our current Medicaid cases, our take-up percentage is four points higher than the national average.

Since early estimates came out, many factors have made Medicaid more attractive to the newly eligible population. All current expansion proposals requires those with access to private insurance to take it and have the state pay for all premiums and co-pays. In those circumstances, why would anyone not keep their existing insurance and just have the state make their payments?

What’s more, the state has started to implement a $5.37 million grant to promote both Medicaid enrollment and the exchange. One insurance executive on the board of the grant administrator described “New Hampshire specific outreach and education about the marketplace, the insurance options and available financial assistance.”Another $580,000 was given to take two large groups who have been lobbying for expansion and hire them as“navigators”to help people interact with the exchange, the majority of whose participants are Medicaid eligible.

Policymakers should ask what the expected total enrolment in Medicaid will be and if anything is being done to apply the notion of sliding eligibility scales to higher income populations.

Further, while language is sometimes used to pretend there is a substantive difference the approach that recently passed the House and the so-called compromise, there is no real difference. For anyone with existing insurance or access to it, the plans are literally identical. For the rest of newly eligible 100,000 population, both ideas would use the same Medicaid dollars to provide the same Medicaid coverage to the same Medicaid population through the same Medicaid providers administered by the same three private companies we are now contracting out regular Medicaid to. You might be forgiven for thinking that’s the same thing.

The only real difference is that the Senate plan would reimburse providers at private insurance rates which are roughly three times as high as Medicaid rates – that hardly seems designed to lower costs.

Compromises typically involve both sides getting something they want. In that respect, this compromise doesn’t look typical. Perhaps when the details come out in the next couple weeks this won’t look simply like a 50% expansion of the state’s Medicaid program that is simply what the governor proposed six months ago but with a different title.


January 2014

Josh Elliott-Traficante

According to the US Department of Health and Human Services, a total of 11,446 New Hampshire residents have selected a health insurance plan through the Federal Exchange. This represents a net increase of 9,877 in the month of December.

Since open enrollment began, the federal exchange has received 19,441 applications from Granite Staters for insurance coverage for 30,204 individuals. Of these thirty some odd thousand, 26,621 were ruled eligible to get policies on the exchange, with just over half (13,516 to be exact) qualifying for subsidies.

For the first time, the Department of Health and Human Services, in addition to enrollment numbers, released the breakdowns of the types of plans being purchased, as well as the percentages receiving subsidies. On the exchange, plans are ranked by metal: Bronze, Silver, Gold, and Platinum, with Bronze being the least expensive.





New Hampshire





Of the 11,446 newly covered, 72% are receiving subsidized coverage, while the remaining 28% are not. Given the distribution of the completed applications, it appears that the percentage of those getting subsidies will decrease, while those not, will increase. However, it remains to be seen if all of those completed applications will result in the selection of a plan.

For the first time, the Department of Health and Human Services has released demographic data about the people who have selected plans on the exchange. New Hampshire has largely mirrored the nation as a whole in terms of gender and age breakdowns.


















Death Spiral?

Garnering the most attention in the recent enrollment report was the percentage of enrollees between the ages of 18 and 34. Nationally, 24% of enrollees were in this age bracket (vs 22% in NH). 40%, however, has generally been regarded as the critical number for Obamacare to work as planned. With 40% belonging to the 18-34 age group, there are enough young and healthy people in the pool to keep down prices and cross subsidize older enrollees. The ‘Death Spiral’ occurs when too few of this group enroll, forcing prices to increase, leading health people to drop insurance due to the cost, forcing rates even higher, continuing the cycle.

The non-partisan Kaiser Family Foundation has done some work on the issue of young adult enrollment and used 25% as a worst case scenario. Under that scenario, the cost of plans would be roughly 2.4% higher than the charged premiums.  That of course would necessitate a hike of in premiums the following year to make up the short fall, on top of any healthcare inflation. Kaiser researchers do not see this as being enough to trigger a death spiral, although the critical enrollment level to spark the Death Spiral is disputed.