(Opinion) NH stands to lose $430.4m in Medicaid through ‘34

Aging state and dwindling direct-care workforce show troubling signs for state’s future

Brendan Williams

HEALTHCARE

By: Brendan Williams

The federal budget reconciliation law enacted last year was particularly designed to punish states that expanded Medicaid under the Affordable Care Act, as New Hampshire did through its Granite Advantage Program.

It principally does so here by reducing a federal financing mechanism that runs through hospitals. Paradoxically, it rewards many states that have not made Medicaid coverage available to low-income adults.

For example, according to data from the RAND Corporation, Alabama stands to gain $1.24 billion under the law in new Medicaid funds from 2025-34. It can thank states like New Hampshire, as our state loses $430.4 million in Medicaid funds over that same period.

This hit would have been worse had Gov. Ayotte not been so successful in obtaining the partially offsetting one-time Rural Health Transformation Program funds available under the law. The future Medicaid cuts will damage hospitals that cannot deny ER care to uninsured patients.

Over that period, our state budget will also take a hit due to the law, losing a projected $652.2 million. As a proportion of the state budget, it’s the nation’s sixth-worst loss. Some other states proportionately losing more — like California, Colorado and Illinois — may be more apt to make up for the difference through tax increases. We know that’s unlikely in the no-new-taxes Granite State.

One can be bullish about New Hampshire and still worry about these impacts. Our state budget is strained enough without the federal government worsening matters, and our aging population brings with it healthcare needs increasingly hard to meet.

The partial exit of Easterseals New Hampshire from Medicaid in-home services can be regarded as a canary in the coal mine. As the nonprofit organization announced on Aug. 19: “Persistent workforce shortages have made recruiting qualified direct care staff increasingly difficult, while reimbursement rates have not kept pace with rising wages and other costs of delivering care.” On Aug. 27, the charity announced it would walk back some of its Medicaid exit.

Recruitment and retention are as challenging for long-term care facilities. The state average for annual nursing staff turnover in nursing homes is 44.1%, despite facilities making every effort to find and keep workers. One facility with a 56.3% turnover rate, for example, offers licensed nursing assistants no less than $23.69 an hour and $4,000 sign-on bonuses.

In my decade in this role, I have seen ages climb in the long-term care facilities that we represent. I recently met with a 107-year-old assisted living resident who was sharp as a tack. According to the most recent data, New Hampshire is now tied with Vermont for having the oldest average age for nursing home residents upon admission (79.4). It only trails the Dakotas and Vermont for the oldest average age of a long-stay nursing home resident (80.7).

This past session legislation was passed, and signed by Gov. Ayotte, to create a working group to examine Medicaid payments for nursing homes with an eye to “(t)he overall solvency of the nursing home sector” — a matter of some urgency with one rural facility in bankruptcy and another, last October, having become the first facility closure since 2016.

Of critical concern is an untenable quirk in the system that can cause even facilities caring for Medicaid residents with the most acute care needs to fail to get those direct care costs recognized.

New Hampshire’s average daily Medicaid rates are already over $200 below Oregon’s, for example — despite Oregon having younger, lighter-care, nursing home residents — so we can hardly afford making things worse.

Voters in our aging state need to press political candidates, both federal and state, on how they intend to address these issues.

Brendan Williams is the president and CEO of the New Hampshire Health Care Association.