The Anteroom

NH Health Protection Program to Advance Medicaid Expansion Policy Nears Completion in State Legislature

Norelli Kennedy and Larsen

Pictured left to right:  NH Speaker of the House Terie Norelli, US Ambassador to Japan Caroline Kennedy and NH State Senator Sylvia Larsen

On June 28, 2012 we were attending a small mid-morning fundraiser at Senator Larsen’s house where Caroline Kennedy was attending and campaigning for Senator Sylvia Larsen and other state Senate candidates.  In the middle of the event, folks’ cell phones started lighting-up and we tuned-in to CNN.  The Supreme Court had just ruled that the Affordable Care Act was constitutional, but that any expansion of Medicaid would require the consent of the states.  At that time, John Lynch was Governor, Bill O’Brien was Speaker and Peter Bragdon was Senate President; and, there were about 170,000 uninsured adults in NH.

That day kicked-off an important, intense political and policy campaign that has:  lasted for months; been part of the state general election; been subject to 2013 legislation; seen late night committee of conference meetings on the state budget; created a summer study commission; required a special session of the legislature; sparked a House floor amendment on the first day of the 2014 session; seen a Senate Rules Committee vote to let in a new bill (SB 413); and generated a bi-partisan agreement to alter the state’s approach to this issue (details below) — an important, bi-partisan 18-5 vote to pass SB 413 in the Senate last week.

This Senate vote was the most important political development on the issue.  It signaled that the process is headed to closure, and NH will accept nearly $2 billion in federal funds to provide health coverage to thousands of low income, working class families.

The Policy

The Affordable Care Act (ACA), sometimes called ObamaCare, seeks to address the issue of the uninsured through two major programs.  The first is a program that offers a sliding-scale subsidy for folks above 138% of poverty (about $16,000 a year) to purchase private health insurance.  This insurance is being purchased through the health care exchange, now called the marketplace.  It is anticipated that as many as 50,000 NH individuals might be eligible for this program, but that the take-up rate will end closer to 30,000.  As of early March, nearly 17,000 individuals have enrolled in marketplace plans.

The second major program for the uninsured is the expansion of Medicaid to adults who earn less than 138% of the federal poverty level.  These people are the real working poor in NH:  retail workers; food and hospitality industry workers; school bus drivers; and other working folks who do not have employer-sponsored health insurance.

By expanding Medicaid to cover this population, it is estimated that about 50,000 to 60,000 people will be enrolled.  Under the terms of the ACA, the federal government will pay for 100% of the cost of this coverage for the first three years; then it will gradually scale back its financing to 90% over a seven-year period.  The 90% federal match will then stay in place permanently.

While the Governor and the NH House supported expansion of benefits to this specific population very early in the process, Medicaid expansion fell short in the Senate in 2013; and as a result, it failed to get the votes needed to pass.  A slim majority of Republicans in the Senate opposed expansion, but seemed to agree that providing some type of coverage and accepting billions of federal dollars was important.  So, for months, the framework of an alternative existed, but never seemed to get over the goal line. (More details on the politics of this below).

The final structure of the bi-partisan Senate bill is to use federal Medicaid dollars to purchase private health insurance for the Medicaid expansion population.  This approach addresses the political concern that Medicaid expansion would create a new major entitlement program in NH.

The final bill includes three main elements:

1.  An expansion of NH’s Health Insurance Premium Payment (HIPP) Program, in which low wage workers who have an employer-sponsored insurance program will be enrolled in the private program.  Medicaid dollars will be used to pay the employee portion of the premium, so long as it doesn’t cost more than covering them under standard Medicaid.  As many as 12,000 people may be eligible under this section of the bill.

2.  The Bridge Program, in which those without employer-sponsored insurance in the expansion population will be enrolled in standard Medicaid managed care for 12 to 18 months, while the new private sector marketplace is stood up and federal approvals are crafted.  In order to move the expansion population into the private marketplace, a waiver must be granted by the Centers for Medicare and Medicaid Services (CMS).  While this waiver will be similar to those granted in other states, it will still take time for CMS to consider it.  The major items they will look at are:  whether the marketplace system will be cost effective, meaning it will not cost more than just leaving folks on Medicaid; and whether those eligible for this federal program are able to access the level of care they would have received under Medicaid.  Another reason for a delay in moving to an opt-in marketplace is that in order for CMS to approve this type of waiver, consumers need to have a choice of insurance plans by a variety of carriers.  In NH today, there is only one insurance company selling health products in the exchange/marketplace.  It is anticipated that others will file to begin selling products over the next 12 months, in time for the expected Marketplace program, but not in the immediate future.  Thus, in order to provide individuals coverage sooner, they will be enrolled in a bridge between non-coverage and private coverage.

3.  Premium Assistance in the Marketplace:  Under the NH plan, eligible adults whose income is below 138% of poverty, will transition out of the Bridge Program and will instead receive their health coverage through Qualified Health Plans, purchased in the marketplace using federal Medicaid dollars.  This transition is anticipated to begin in January of 2016.

The Politics

The Election:  The 2012 state general election set the stage for the likelihood of Medicaid expansion with the election of Governor Hassan, a Democratic House and more Democrats (or at least less Republicans), and a moderate Senate.  As Medicaid expansion played-out in 2013, given the partisan make-up of things, the plan was for the expansion to be part of the Governor’s budget, to get the House to include it in the budget and then push the Senate to adopt it.  Steps one and two worked-out, but when the budget went to the Senate, party discipline took over and things slowed-down.

The Senate:  During the Senate deliberations of the budget, a great deal of public advocacy came to bear, with the hope that two or three Republicans would side with the Democrats and include Medicaid expansion in the budget.  However, more conservative forces both outside and inside the Senate mounted a campaign to reject this expansion.  At the time, this was part of a national Republican effort to attack the ACA at all stages of implementation.  This back-and-forth about expansion in the budget came to a head during the committee of conference on the budget in late June.  The House and the Governor pushed hard on Senate leadership.  In the end, party discipline prevailed and former Senate President Bragdon held the line, but agreed to a process that would allow for a study commission over the summer and fall.

The Commission:  The Commission to Study Expanded Medicaid Eligibility was convened in July, with appointments made by the Governor, Speaker and Senate President.  The group met over the long, hot summer and spent their time reviewing the current system as well as options to consider.  A lot of posturing and rhetoric about Medicaid went on.

  • In the midst of the Commission, two major events shifted momentum toward a deal.  First, Senate President Peter Bragdon gave up his role to take a job with the Local Government Center.  Senator Chuck Morse moved into the Senate President position.  Morse had been Chairman of the Senate Finance Committee and his new leadership seemed to signal a more practical, less partisan review of the expansion in term of its impact on state budgeting and improving the Medicaid system at the state level.  In addition, in October, the federal government shut-down began to change public opinion away from partisan intractability and created a sense of the public’s interest in advancing the ball.  (This momentum swung again later in the process when the health exchange website failed.)
  • The Commission’s report recommended moving forward with expansion by a slim margin, but it did have the support of Senator Nancy Stiles, a Republican from the Seacoast.  Thus, a bi-partisan recommendation emerged.
  • The Special Session:  Following the Commission’s work, the Governor called for a special session in November 2013.  In the early stages, a Republican plan led by Senate President Morse and Majority Leader Jeb Bradley was announced at a news conference attended by all but three of the GOP senators.  Initially, it looked like an expansion bill would pass, including the main elements of the bill that will pass in the weeks to come.
  • The Right Wing Freaks-Out:  The special session was only three weeks long, but those opposed to Medicaid expansion and ObamaCare went to work.  With the help and financial support of Americans for Prosperity, a large amount of out-of-state money was used to push back hard on Republican senators.  News conferences with far right conservative activists at the barricades announced they would “primary” anyone who voted for the bill.  Internally in the Senate, some of the early GOP supporters began to recede.
    • In part, to fend off internal fights, the GOP Senate Caucus took the position that they wanted most of the Republicans (if not all of them) on-board with the bill and would not allow it to pass with 11 Democrats and only two or three Republicans.  It caused quite a bit of frustration for expansion supporters to know that while there was a majority in favor of the Senate Expansion plan, informally a super majority was needed to pass the bill.  Despite hard work to find a compromise that would win over that super majority, debate moved off policy and then partisan politics took over.  In the end, the special session failed to find a majority in the Senate.
  • 2014:  The Special Session, and particularly how it ended, left a lot of hard feelings over the tactics used to fight the bill.  But a desire to continue working and find a way to pass legislation remained.  Quietly, in the aftermath of the Special Session, a bi-partisan group of Senators and staff got to work to find a solution. Meanwhile in the public process, the House made the first move and sent a Medicaid expansion bill over to the Senate on the first day of the 2014 Session.  While Senate leadership did not rush to support this bill, they didn’t reject it either.  By late January, a new Senate approach emerged. The new agreement stepped away from Medicaid Expansion as it was known and instead offered a new, New Hampshire approach that transferred the Medicaid population into the private market.  With a deal in hand, the Senate Rules Committee allowed a new bill in.  A public hearing was held and the Committee voted to pass SB 413.
    • Here again, the right wing freaked-out and initially pushed back hard in and around the State House.  Meanwhile, the combination of healthcare proponents, business leaders and Senate leadership presented strong and well-considered advocacy.  This, combined with a strong grassroots effort, created an environment for passage.  Far-right opponents of the bill did make a strong attempt, beginning an outside advocacy effort which asked local Republican Committees to vote to oppose their Republican leaders in the Senate.  This action created a lot of ill will.  Likely, this situation will last for some time and impact the 2014 primary elections.
  • The Senate Vote:  On March 6th, the Senate voted 18-5 to pass SB 413 and set the stage for an expansion of health coverage to thousands of NH families.

What Happens Next?

1.  Over the next three weeks, SB 413 will leave the Senate.  A hearing and vote will be held in the House, and it will likely get to the Governor for signature before the end of March.

2.  From April first to July first, a series of state plan amendments, Fiscal Committee votes and rulemaking will need to take place.  This will allow for enrollment of the expansion population into the Medicaid Bridge Program.  This population will likely be covered by July 1st, 2014.

3.  Several months of work will be needed to prepare a major Medicaid waiver to allow the expansion population to move into the marketplace.  In addition, work will need to be done to shore-up new insurance companies in the marketplace.  The test will be in May 2015, when new insurance providers must file with the NH Insurance Department for coverage year 2016.

4.  In June 2014, the election filing period will open and the threat of primary retaliation will be known.  The primary will be held in September, and NH will know if the vote on SB 413 had an impact on the Republican Senate.

June 2012 to March 2014 has seen an intense and important healthcare, anti-poverty policy debate in New Hampshire.  At times, the political rancor threatened to overtake policy development; but in the end, the State House seemed to find a center of gravity to ensure that tens of thousands of NH families will be covered by health insurance.

For more information on this story, speak with the author Jim Monahan, Vice President of the Dupont Group.