New Hampshire Medicaid expansion population more costly

Participants in New Hampshire's expanded Medicaid program have higher medical costs than other people, but it's too early to say whether the program should be scrapped, Insurance Department officials said Monday.

Medicaid expansion, made possible through President Barack Obama's health care overhaul law, subsidizes health care for low-income people. New Hampshire's version uses federal dollars to put about 43,000 people on private insurance plans and will sunset at the end of next year if not reauthorized by lawmakers.

On Monday, the Insurance Department released a report it commissioned on what it cost insurers to cover claims for program participants last year. On average, health care costs for Medicaid recipients were 39 percent higher than costs for others in the individual market after adjusting for age and other factors, and if the program didn't exist total claim costs in the individual market would be 14 percent lower.

The department isn't making any recommendations about the program's future, however.

"There are a lot of moving pieces, even more than when the program was created," said Jennifer Patterson, an attorney for the Insurance Department and a member of a commission studying the program's effectiveness.

Tyler Brannen, the department's director of health economics, said if higher premiums drive healthy people to drop insurance it's possible the Medicaid recipients could act as a sort of ballast for the market because their participation doesn't depend on price.

The Insurance Department had asked Gorman Actuarial to do the analysis as part of its efforts to stabilize the state's individual health insurance market, which is in turmoil due to continued confusion in Washington, D.C., over the fate of the health care overhaul law. Some premiums in New Hampshire, where three companies plan to offer plans in 2018, are expected to increase by more than 40 percent.

The Insurance Department has been working on a plan to offset those hikes, but a legislative committee recently rejected a key part of the program it wanted to enact. Commissioner Roger Sevigny said Monday's report sheds light on the expanded Medicaid program but the markets will look very different in the future.

"These are times of unprecedented uncertainty for individual markets in New Hampshire and across the country — a factor that compounds the difficulty of the reauthorization question," he said.

Gorman will provide additional analysis in September about the possible impact of a fourth insurance company's departure from the market, the significant rate increases proposed by the remaining insurers and potential actions by the federal government. It will look at several scenarios, including leaving the Medicaid recipients in the individual market or moving them to a separate risk pool.