By Rebecca Adams, CQ HealthBeat Associate Editor
January 7, 2014 -- Legislators in a few states will soon be resuming heated debates about whether or not to expand eligibility for Medicaid.
In New Hampshire, Democrats in the House plan to call a vote on this week on legislation that was amended to broaden Medicaid eligibility. That chamber is expected to approve the measure but whether the state Senate will go along is unclear.
Virginia's Democratic Governor-elect Terry McAuliffe plans to use his address to the General Assembly on Jan. 13, two days after his Inauguration, to press for Medicaid expansion. In Virginia, a commission that has been charged with coming up with a recommendation on expansion also is expected to hold a key meeting within the next two weeks, according to the vice chair of the panel.
In most states, the question of whether the state will broaden Medicaid is pretty clear. Twenty-five states and the District of Columbia are expanding their programs for the low-income this year, and most of the expansions took effect on Jan. 1.
Indiana and Pennsylvania are eyeing expansions later. In most of the other states, there is little momentum for expansion in the near term.
But New Hampshire and Virginia are two of the few states that could see further action on broadening Medicaid to more adults this year. Both have Democratic governors who are intent on opening up the program. Because the federal government will pick up all the costs for the newly-eligible adults for three years starting now, both governors argue that they would be giving up much-needed revenues if they don't approve changes that would allow people with income of up to 138 percent of the federal poverty line to get Medicaid.
Other states in which expansion cannot be ruled out include Florida, Utah, Tennessee, and even Montana. But the chances for quick approval are slim in those places.
Next Steps in New Hampshire
Democrats in the New Hampshire House are reviving a discussion that generated passionate debate during a special session in the state this fall. The House has twice passed legislation that would expand Medicaid, including a vote during the special session.
House Speaker Terie Norelli said in a statement that one of the first things Democrats will do in its legislative session is to amend a bill so that the measure will expand Medicaid.
"That is the quickest we can act on the subject, immediately sending the bill over to the Senate upon passage and minimizing New Hampshire's lost opportunity," said Norelli. "The state of New Hampshire and all of the people need us to pass a plan that works immediately. Each day that we wait means dollars not invested in our state's health care infrastructure, care not received by men and women who desperately need it, and good jobs not created in our state."
The measure would allow people who become eligible through the expansion to get the care through any of the three existing managed care plans that serve Medicaid now. Democrats estimate that about 58,000 residents would benefit.
As the marketplace created by the health care law (PL 111-148, PL 111-152) becomes more competitive, the Democratic measure would shift some of the people who qualify under the expansion to marketplace health plans. Currently, only one insurer offers coverage through the marketplace in New Hampshire.
The Medicaid expansion would occur in 2014 but the shift of some of them to marketplace plans would come later.
On Jan. 1, 2017, people who have income between 100 percent and 138 percent of the federal poverty line would start to get their coverage through the marketplace rather than the traditional Medicaid managed care program. But that change would only take place if at least three health plans offer coverage in the marketplace.
Some Senate Republicans are concerned about the costs of expansion when the federal payments decline. After the first three years, federal funding phases down until Washington is providing 90 percent of the money for newly-eligible people starting in 2020.
Other Senate Republicans have signaled a willingness to expand Medicaid but want to move people into marketplace plans more quickly. Democrats say it's important to wait until enrollees have a choice of more than one plan.
"Senate Republicans have said publicly they want to reach an agreement," said Marc Goldberg, a spokesman for Gov. Maggie Hassan, in an interview. "We will see if that plays out in the coming weeks."
Hassan is having conversations with House and Senate leaders about Medicaid expansion, Goldberg said, "and will work with any member of either party who is willing to negotiate in good faith toward a compromise that will work from day one and for the long term."
Searching for Common Ground in Virginia
In Virginia, the legislative session recently opened, shortly before McAuliffe's Jan. 11 inauguration. Legislators are watching to see what types of recommendations come from the Medicaid Innovation and Reform Commission, a panel including state legislators that the state empowered to move forward an expansion if the commission finds that the system is prepared to handle it.
McAuliffe aides say he is open to compromise on the type of expansion that happens in Virginia—as long as the program is broadened.
"He's not taking anything off the table," said spokesman Brian Coy in an interview. "He wants to take this money and grow jobs. So there is no proposal that he would rule out, out of hand, before getting stakeholders at the table."
When asked whether McAuliffe would support a proposal to use Medicaid dollars to buy consumers coverage through the new federal marketplace, Coy said the future governor is open to that type of approach. States such as Arkansas and Iowa have received federal approval to do that.
"He's familiar with those ideas," said Coy. "He's willing to make that part of the negotiations. There are various ways in which this could get done. He's looking forward to work with Republicans on something everyone can get behind."
McAuliffe sought to ameliorate concerns from Republicans by keeping on staff outgoing GOP Gov. Bob McDonnell's Secretary of Health and Human Resources Bill Hazel, a move that irritated some of McAuliffe's liberal supporters.
McAuliffe will have to work off McDonnell's proposed budget for this year, which doesn't include expansion. McDonnell also included language that would sunset any expansion in June 2016.
The legislature will debate that budget and McAuliffe will have the choice of signing or vetoing it. But Coy said that the Democrat does not expect to have to veto a bill if it doesn't include expansion because he is hopeful that the two sides will come together.
"Gov.-elect McAuliffe has reached out to every single member of the assembly to explain the virtues of doing this," said Coy. "It's certainly a topic he's discussed with all delegates and senators from all corners of the commonwealth."
Republicans in the legislature have been opposed to expansion and it's unclear whether they will come around. The House members of the Medicaid commission held an internal meeting last week to begin work on their own proposal to try to save money in Medicaid, which potentially could allow some members to feel more comfortable with expansion.
Steve Landes, a Republican legislator who is the commission vice chair, said that the package of ideas will probably include ideas such as creating a medical home for enrollees so that patients would be encouraged to go to the doctor's office instead of the emergency room. Landes said that the model of expansion that Arkansas and Iowa will use is getting some notice.
"Arkansas is definitely one of the things we've looked at," he said. "A little bit of concern is you're still taking the money and the potential is the money may not be there in the future" if federal reimbursements decline more than promised.
Matt Salo, the executive director of the National Association of Medicaid Directors, predicted that more states will take a closer look at expansion now that federal officials have approved the approach used in Arkansas and Iowa.
"In those states, clearly you've seen the administration move a little further," Salo said. "In each of those states, not everything they asked for, they got. But every time there's movement on the map, other people are saying, 'Oh, well, if they'll go this far maybe we can do that. Maybe we could get them to come a little further.'
We're weaving the tapestry as we go. What's approvable now is not what was approvable 12 months ago and who knows what will be approvable 12 months from now."
