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HHS releases report on Medicaid expansion in NH

Norma Love, Associated Press

CONCORD, N.H. (AP) -- New Hampshire could save up to $114 million if it decides not to expand Medicaid under the new federal health care law, but it would lose $2.5 billion in federal aid toward health care for the state's uninsured.

The state Health and Human Services Department on Thursday released the first part of a study on the impact of expanding Medicaid that examines the cost to the state from 2014 to 2020. The report offers preliminary estimates of what the state might save if it decides not to expand the program as well as estimates of what it would cost.

If New Hampshire expands Medicaid, it could cost an estimated $85 million over seven years. But New Hampshire's health care providers would share in the $2.5 billion flowing into the state from the federal government over that period.

The agency hired the Lewin Group to look at the pros and cons of expanding the program. The U.S. Supreme Court ruled in June that expanding Medicaid was optional under the Affordable Care Act.

The second part of the report is expected to be released next month and will examine the impact that expanding the program would have on the economy, health care providers, other state agencies and health insurers.

Health and Human Services Commissioner Nicholas Toumpas said the decision on whether to expand Medicaid to cover more of New Hampshire's uninsured — largely adults — rests with the governor and Legislature.

Under the federal health care law, people under age 65 will qualify for Medicaid if they earn up to 138 percent of the federal poverty guideline. For a single adult, that means about $15,000 a year. The federal government will pay 100 percent of the cost to insure these newly eligible enrollees for three years beginning in 2014. Eventually, the federal government's share of the cost begins to shrink annually until it is 90 percent in 2020, and the state pays the rest.

The study took into account the so-called woodwork effect of people eligible for Medicaid who aren't enrolled. Under the new law, their medical costs are matched at the current 50-50 rate with the state.

Randall Haught of the Lewin Group estimated that 58,000 of the 113,000 eligible for Medicaid under the new law would enroll. He said 22,000 people would enroll in Medicaid even if the state doesn't expand because of penalties for not being insured and other provisions in the law.

Haught said the study doesn't take into account the loss of federal aid to hospitals to help cover their costs of caring for the poor starting in 2014. The state qualifies now for up to $160 million a year in aid matched with the same amount of state money. The federal law assumes hospitals would have fewer poor people using emergency rooms for basic care if they are covered by Medicaid or buy insurance through a yet-to-be-created health exchange. Haught estimated the aid available could be half what it is now by 2020.

Democratic Gov.-elect Maggie Hassan campaigned in support of expanding Medicaid to extend coverage to people who can't afford insurance.

Hassan said in a statement Thursday that the injection of federal health care funding would help the economy. She said she would review the report but cautioned that "to have a full understanding of the financial impact, we will also need to examine the phases of the report that are still in progress, including an analysis of the benefits to our economy from the influx of federal dollars and the reduction of uninsured emergency room visits."