The Otter administration is proposing a state-funded partial alternative to Medicaid expansion that could deliver basic primary care for 78,000 Idahoans who now have little or no access to health care coverage.
The Governor’s Office and Department of Health and Welfare personnel have met with state legislators, business groups and health organizations to outline the proposal, the basic details of which call for state payments to primary care providers to cover basic preventive health care for people in the so-called coverage gap — people who earn too much to qualify for Medicaid but not enough to qualify for assistance obtaining health insurance.
The payments would amount to about $32 per month per individual covered — roughly $30 million in all. Emergency room visits, acute care, hospitalizations and prescriptions would not be covered, and the state’s existing reliance on county indigent funds and the state catastrophic fund to pay for crisis care would be retained.
Possible funding could come through higher tobacco taxes. Last raised in 2003, Idaho’s cigarette tax of 57 cents per pack is among the lowest in the nation. Tax-averse lawmakers, responding to the proposed plan, have encouraged officials to explore other sources of money.
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The proposal is a far cry from the level of coverage and funding available if Idaho were to expand Medicaid under the 2010 Affordable Care Act. Supporters acknowledge that it is not intended as a replacement, only a practicable first step toward assisting the uninsured.
Although legislators approved a state health-care insurance exchange in 2013 — a government-supervised market where uninsured Idahoans could purchase basic health insurance, sometimes with a government subsidy — state lawmakers opposed to further implementation of Obamacare have blocked Medicaid expansion here, as they have in 19 other states. Generally, opponents dislike federal government programs, cite costs and mandates of the federal plan, and believe that states could end up footing the entire bill if federal aid ends.
If approved, Idaho’s plan for expanding Medicaid could have saved the state $173 million over 10 years. Expansion could bring more than a $100 million worth of federal assistance to low-income citizens through 2025 if enacted in 2016.
PAY LESS NOW OR MORE LATER
The state plan, if implemented, could save government and hospitals money if people who are now uninsured get preventive care that reduces more serious, and more costly, health problems that taxpayers and hospitals end up paying for. A pilot program in Idaho shifted nearly 11,000 Medicaid recipients with chronic illnesses into small “medical homes” where they receive comprehensive, team-based primary care focused on prevention and staying healthy. The program has reduced hospital admissions, emergency room visits and average monthly member cost and delivered $10 million in savings from $1.9 million in fees.
“Ideally if we can get people cared for in a timely way up front we can drastically avoid a lot of those back-end costs,” said Ted Epperly, CEO of the Family Medicine Residency of Idaho, which trains doctors and operates clinics primarily for low-income patients. Epperly served on a governor-appointed panel that looked at Medicaid expansion for Idaho. “Given the political and ideological scenario in Idaho, this was a mechanism by which the Department of Health and Welfare strategically started to think about how to ensure care to this vulnerable population in a way that can save overall health care costs in the state.”
Neither the Governor’s Office nor the Department of Health and Welfare would comment on the plan, calling it a work in progress. Those briefed on the plan who have expressed tentative or qualified support are quick to point out that it is not a replacement for expanding Medicaid, but could be an important first step. Sen. Lee Heider, R-Twin Falls, who chairs the Senate Health and Welfare Committee, called it “a great proposal.”
“There has not been any disposition in the Legislature to expand Medicaid, and that gets back to a philosophical issue,” Heider said. “I’m really not interested in expanding Medicaid because I don’t think federal funds are available to handle the load. I think within the state we can come up with state funds that cover individuals that have medical needs. I think it’s a far better plan.”
He said any proposal funded by a tax increase, even in what are considered “sin taxes,” would prompt “an interesting debate on the floor in both bodies. I don’t know whether there will be the disposition to actually raise that money.”
Heider’s counterpart in the House, Rep. Fred Wood, R-Burley, said he was initially briefed on the proposal by Health and Welfare Director Richard Armstrong earlier this fall. Wood said the plan “gets us down the road to starting to take care of our indigent population.”
“I think it’s an excellent first step. I think it’s an Idaho solution,” said Wood, a retired physician. “I don’t view this necessarily as a substitute for (Medicaid expansion). I view it as now Idaho is making an attempt to take care of the indigent population for which we have an obligation, and we’re doing it with a solution that we think that we can afford.”
Wood said he told Armstrong to look for sources of funding other than a cigarette tax increase.
ACCESS TO CARE
The key to making this modest program save money, he said, depends on establishing for those in the gap group a default primary care facility and physician, he said.
“Part of the logic here is that all 78,000 of that gap population will have a medical home assigned by either themselves or the (Health and Welfare) Department,” Wood said. “They will have a physical address and a physician to go to.”
Other lawmakers, especially Democrats, have not given up on expanding Medicaid. The federal government covers the cost in full through 2016, scaling back to 90 percent coverage from 2020 onward.
“Instead of being a good first step, it’s a poor second choice,” said Rep. John Rusche, the House Democratic leader from Lewiston, of the state plan. “It’s all state money. State taxpayers are already paying for Medicaid expansion. We’re not getting any benefit from it, and instead, we’re going to tax you again to pay for this program.”
Rusche said he planned to introduce a Medicaid expansion bill in the next session. Likely opposition from Republicans could deny the measure even a preliminary hearing.
Outside of government, health care and business groups tentatively, or perhaps tepidly, endorsed the effort. Discussing the plan Friday, the members of Idaho Hospitals Association decided to wait on taking an official position pending more details. The association commended Armstrong for working to obtain coverage for the gap group, but noted that the plan does not cover costs of hospitalization or care for acute or chronic illness.
“This is not Medicaid expansion and, as a result, it does not fully address all of the needs that are out there, but it certainly does get us down the road in trying to provide access to care,” said Brian Whitlock, IHA president. “There will still be a large element of health care that will be unmet with this proposal and that needs to be understood throughout the debate on this issue in the coming session.”
Administration officials are expected to continue fine-tuning the proposal leading up to the Jan. 11 start of the 2016 legislative session. Legislation, if introduced, would likely begin in the House early in the session as lawmakers, facing election next year, look to wrap up the year’s work early.
By the numbers
78,000: Number of Idaho adults unable to obtain health insurance under Medicaid or the Affordable Care Act. Their medical costs are covered out of pocket, via charity or taxpayer-funded indigent funds, or they forgo care.
$30 million: Projected outlay by the state to provide the gap group with basic primary care, possibly funded by an increase in state cigarette tax.
$32: Monthly per-person payment to primary care facilities for coverage.
57 cents: Idaho cigarette tax per pack, the seventh-lowest tax in the U.S. It was last increased in 2003.
$36.4 million: State’s cigarette tax revenue for fiscal year ended June 30.
19th lowest: Where Idaho’s cigarette tax would rank nationally if it were doubled to fund primary care coverage for gap group.
Health insurance in Idaho
Of Idaho’s 1.6 million residents:
▪ 750,000 have employer-sponsored health insurance
▪ 264,000 have private insurance or are eligible for plans offered under the state health exchange
▪ 269,000 are on Medicaid
▪ 249,000 are on Medicare
▪ 78,000 are uninsured.
Medicaid expansion by state
Thirty states and the District of Columbia have implemented Medicaid expansion that is provided for under the 2010 Affordable Care Act. Nineteen states have not. One state, Utah, is deliberating. The latest developments:
▪ Montana and Alaska enacted expansion this year. Montana legislators approved expansion in April with a federally approved waiver that requires most of those in the state’s gap group to pay 2 percent of their income toward coverage.
▪ In Alaska, Gov. Bill Walker expanded Medicaid coverage in July on his own authority after the Legislature failed to approve it. The legislature is suing, but the expansion went into effect in September.
▪ In Utah, Republican lawmakers killed a Medicaid expansion plan in October. Alternatives are under discussion.