, Kingston, NH

November 21, 2013

My Opinion: November 21, 2013

By NH State Representative L. Mike Kappler
Carriage Towne News

---- — RAYMOND - The Democrats plan for Obamacare Medicaid Expansion is wrong for New Hampshire.

1. Important things to remember.

Medicaid Expansion is part of the “Affordable” Care Act a.k.a. Obamacare, a law that before it is even implemented is having significant issues, unanticipated costs, problems and economic impacts.

Many states have said “No” to expansion or opted to propose their own solutions to providing health care access to low income citizens, including helping them get on high quality private insurance rather than government insurance (Medicaid).

2. The special session House bill SSHB1’s dangerous divergence from Medicaid commission recommendation.

Repeals the prohibition on a state health insurance exchange/marketplace (Section 12) and establishes a state health insurance exchange/marketplace (Section 8). Contrary to a bipartisan unanimous vote by the House Commerce Committee less than one month ago to kill a bill proposing to undo the prohibition, the same provision has been slipped into SSHB1. This was NOT part of the commission’s recommendation.

HIPP waiver required but not as a precondition for starting the program, which will go into effect on 1/1/14, regardless of whether the HIPP waiver has been granted. (Relative to RSA 126-A:71 - page 5, line 9). If this waiver is not in place prior to 1/1/14, we will run the risk of thousands of citizens moving from private, employer sponsored to government funded Medicaid. This will cause a number of individuals to possibly churn back and forth from Medicaid to private insurance. This is contrary to the commission’s recommendation. {HIPP or “Health Insurance Premium Program” means the program established by the Department pursuant to Section 1906 of the Social Security Act of 1935, as amended, (42 USC, Section 1396e), to purchase employer-sponsored group health care coverage. This is the part that uses government dollars to help pay for staying on their employer-sponsored insurance, rather than jump on to Medicaid}.

Allows DHHS to use up to 5% of insurance premium tax revenue to fund the “cost of implementation” of the program in fiscal years 2014/15. This could be up to $10M of state funds diverted to pay for the program (Section 6). Despite promises from expanded Medicaid proponents that this would not cost any state taxpayer dollars for the first 3 years, we now see a direct tapping of existing tax revenue to fund government growth as part of this program.

This was NOT part of the commission’s recommendation.

3. Impact on patients and providers.

A surge of tens of thousands of new patients will likely put a strain on providers ability to provide a high level of care and could cause longer waits for services.

NH’s Medicaid reimbursement rates are among the lowest in the nation. Having to provide care at rates much lower than that of Medicaid or private insurance hurts providers bottom lines.

In order to offset these low rates, providers will charge higher rates for people on private insurance thereby increasing the cost of premiums for private policies.

Private policyholders will be subsidizing Medicaid patients care by paying higher rates. This includes individual, small group and large group plans, plus self-insured ERISSA plans and the state employees insurance. So everyone who is insured pays more, except those on Medicaid and Medicare. {ERISSA or “Employee Retirement Income Security Act”, which, in part, is the law that governs pension plans and health plans provided as part of a pension plan}.

4. Impact for state budget.

Federal funding for expanded Medicaid drops from 100% to 90% by 2020 leaving NH taxpayers to pick up the balance. There is NO guarantee that federal funding would remain at 90% thereafter. It could drop lower, exposing NH to hundreds of millions of dollars in costs down the road. This amounts to an unfunded mandate.

From 2020 forward, data from DHHS and the Center for Public Policy Research suggests that State costs could be in the neighborhood of $40M per year. That assumes costs of healthcare do not increase more that 1.5% per year, and also assumes the estimated number of enrollees is not under-estimated. Both very unlikely.

These dramatic rises in Medicaid costs are unaffordable and would undoubtedly push NH towards a sales or income tax to pay for them. This is unacceptable! I would never vote for either.

There is no cap on the cost of this program or costs to the state. There is no cap to the number of enrollees to the program.

We’ve seen the consequences in the current Medicaid program from the absence of a cost cap: the only way the state can afford to continue the program and avoid more taxes is to cut payments to providers, and that is cost-shifted in the form of higher health insurance premiums for everyone else.

5. Social impact.

Eligibility is determined by income only. Someone with $1M in assets, but little or NO income could theoretically be eligible for free government health care.

There are no personal responsibility requirements with this expanded Medicaid plan. No co-payments. No deductibles. No work requirements. Those on the expanded Medicaid rolls have no real incentive to get off of Medicaid and have no “skin in the game” by contributing at least something to the cost. Cost sharing provisions increase personal responsibility and incentivize patients to make smarter life and care choices.

(Editor’s Note: NH State Representative Mike Kappler can be reached at