Op-Ed: Sanborn & Kurk: Expand Medicaid? Only If You Want a State Tax Increase

Many people in New Hampshire believe that low-income New Hampshire adults should have health insurance. Some low-income adults have it now through their employers, but many do not.

Expanding Medicaid under Obamacare is one way to provide health insurance to low income adults, but unless real safeguards are put into place and until we believe we can rely on the federal government, the ultimate result in New Hampshire will be a new tax, perhaps a broad-based income or sales tax — in other words, higher taxes for the middle class, who will be charged with paying for the expansion.

Medicaid is currently a federal-state partnership that pays for health services for poor people in particular categories of need, including children, pregnant women, and the disabled. Under Obamacare, states have the option to expand the program to cover able-bodied, poor adults even if they are not in a listed category of need, with the federal government picking up all of the cost for the first three years, slowly decreasing to 90% of the cost in 2021 and beyond.

Expanding Medicaid under Obamacare would add some 50-60,000 individuals to the program. The state’s 10% cost share in the early 2020s is estimated at around $40-45 million each biennium. This would increase the state’s budget enough to require a new tax. In fact, this would be the largest single expansion of government spending this state has ever seen.  New Hampshire residents don’t want a sales or income tax, and we already have the third highest business taxes in the nation. New Hampshire’s economic growth and its ability to attract and retain employers would be damaged by any such tax.

Unfortunately, these estimated costs – as high as they are – may be too low.  States like Arizona and New Mexico, which recently expanded Medicaid, had program costs significantly higher than estimated. One should not be surprised if the cost estimates for New Hampshire’s program were similarly flawed.

The sad reality is that, once NH expands Medicaid under Obamare, it will be politically impossible to stop it. Why? Because, for example, when costs inevitably rise, expansion supporters will successfully argue that the state cannot deprive 50-60,000 low-income individuals of their health insurance.

There are other, perhaps more significant, issues surrounding the expansion of Medicaid under Obamacare.

Will insuring additional people without increasing the number of doctors and nurses increase waiting times for medical and surgical appointments for those who are already insured?

Are we discouraging people who are currently working part-time or in an entry level job from striving for full-time or a higher paying job, just to stay on tax-payer funded health care?  What effect will this have on our economy?

Why should fiscally-prudent New Hampshire participate in a federal program that increases the annual federal deficit and the national debt (at least $2.4 billion from New Hampshire alone)?

How can we rely upon the federal government not to make cuts to the program and further increase our state’s financial obligations, knowing that both Democrats and Republicans in DC have already said potential cuts need to be implemented now?

Is it fair to those who pay their full premiums, deductibles and co-pays to have fewer choices of hospitals and doctors than those who pay nothing for their health costs under Expanded Medicaid?

Is it fair that eligibility for expanded Medicaid is based on income only and not assets, so that a 50-year old who lives on a yacht and has a very low income qualifies for free health insurance?

Expanding Medicaid under Obamacare is not the New Hampshire way to make health care more affordable or accessible for anyone.

Laurie Sanborn is a State Representative serving Bedford and Amherst, and is the Republican Policy Leader in the NH House. 

Neal M. Kurk is a State Representative serving Deering and Weare, and is a ranking member on the House Finance Committee.