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Study: Medicaid expansion would cover 22,300 but cost N.H. $85.5m over seven years

Concord — Accepting federal money to expand the Medicaid program would extend health coverage to 22,300 New Hampshire residents who otherwise would remain uninsured, at an additional cost to the state of about $85.5 million over seven years, according to a new study.

On the other hand, the study concluded, not expanding Medicaid could save the state as much as $114 million over the same period.

Expanding Medicaid is one of the pillars of President Obama’s 2010 health care reform law. Starting in January 2014, New Hampshire can receive billions in federal aid to cover the majority of the cost of extending the program to more low-income residents, all adults earning up to 138 percent of the federal poverty level.

But the June ruling from the U.S. Supreme Court that upheld Obamacare as constitutional also gave individual states the option of not expanding Medicaid. Nick Toumpas, commissioner of the state Department of Health and Human Services, said state policymakers wanted more information before making that decision.

“It’s not a DHHS issue. It’s not a New Hampshire Insurance Department issue. It’s an issue that affects 1.3 million people in this state, and it’s important that we have the data,” Toumpas said.

So, Toumpas said, the state hired a consultant, the Lewin Group, with funding provided by the Endowment for Health and the New Hampshire Charitable Foundation. The first part of the Lewin Group’s report, dealing with Medicaid expansion’s effect on the DHHS budget, was released yesterday; a second report dealing with “secondary effects” such as the impact on the state economy will be released next month, said Randy Haught, senior director at the company.

During a presentation yesterday in Concord, Haught said an estimated 76,800 New Hampshire residents who are now uninsured will gain coverage under Obamacare even if Medicaid is not expanded. If Medicaid is expanded, a total of 99,100 uninsured people will get coverage.

“It’s going to leave a bit of a void in the system if you don’t expand,” Haught said.

Medicaid enrollment in the state could increase by 58,000 if the program were expanded, he said, but that figure includes people who have insurance now or who would find coverage through another program if Medicaid were not expanded.

It would cost the state an estimated $85.5 million over seven years, 2014 to 2020, to cover its share of the expansion’s cost, Haught said. Depending on enrollment, that figure could be as low as $38 million or as high as $102 million.

And policymakers could modify the program to reduce the cost, he said. For example, implementing the expansion under a Medicaid managed care program would reduce the estimated cost to $69.5 million. Delaying implementation by a year or two could also lower costs, he said, as could moving some Medicaid-eligible residents into other programs.

On the other hand, Haught said, the state will save between $66 million and $114 million if it doesn’t expand Medicaid, in large part thanks to additional federal money it will receive in either case to expand coverage for poor children.

Gov.-elect Maggie Hassan has voiced support for expanding the Medicaid program. In a statement yesterday, she said she looked forward to reviewing the Lewin Group’s analysis — especially the second report, expected by year’s end.

“I will closely review the findings of today’s HHS report, which is an important first analysis of what Medicaid expansion means for our state that will greatly inform the decision-making process moving forward,” Hassan said.

“But 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.”

(Ben Leubsdorf can be reached at 369-3307 or bleubsdorf@cmonitor.com or on Twitter @BenLeubsdorf.)