Medicaid and ACA Cuts Will Hit NH Hospitals, Mental Health Services and All of Us
Why Medicaid Matters to New Hampshire’s Health System
As a former Executive Director of NAMI NH and a member of the Board of Contributors to the NH Healthcare Cost Initiative, I understand, very clearly, how important Medicaid funding is to NH’s health and mental health care system. At the end of 2024, there were 186,000 Granite Staters enrolled in Medicaid, or about 13% of the state’s population. On average, about 55,000 people who have Medicaid Insurance receive mental health and or substance use treatment services through the Community Mental Health Center service system (CMHC). Medicaid is the largest insurance provider of mental health and substance use disorder treatment in NH, and as we know from the news, it is planned to take large cuts. What happens to Medicaid impacts the entire NH Healthcare system. All health insurances, whether public, private or self-insured are inextricably linked, so a change in insurance coverage for one group is likely to impact another.
In addition, the approximately 65,000 NH residents enrolled in the ACA (Obamacare) because of enhanced tax credits under the Biden American Rescue Plan and Inflation Reduction Act are likely to lose that benefit by the end of this year. Combine this fact, with the proposed cuts to Medicaid both federally and in NH, and the continued rising cost of insurance the impact on the individuals, families, businesses, hospitals and health and mental health providers can be nothing like ever experienced in my 30 years working in NH.
Even with insurance coverage growing, we live in a time when health cost and affordability are problems for many; in the US, including in NH, approximately 41% of the population have some medical debt, leading to bankruptcies. In NH the NHFPI reported that medical debt decreased with Medicaid Expansion because more people had insurance. Thus, it stands to reason, if as predicted, if those in the Medicaid population (and those in the ACA with tax credits) lose their insurance, then it is likely that more will experience debt, and/or will end up using more intensive and expensive service because they deferred care and need expensive hospital emergency medical care.
Community Mental Health Centers Are Also in Jeopardy
The network of 10 Community Mental Health Centers relies heavily on Medicaid to support its programs and operations, and help support their ability to offer low-cost or free care on a sliding scale. New Hampshire’s 10 nonprofit community mental health centers (CMHCs) receive the largest amount of their total revenue from the Medicaid program-between 70 and 90 percent, depending upon the particular center. In the past few years the DHHS’s has moved forward two important mental health initiatives, within the CMHC system, that are in great jeopardy with proposed budget cuts; the 10-Year Mental Health Plan which envisions a mental health system that provides access to a full continuum of care for all populations – community education, prevention and early intervention, outpatient supports, step-up and step-down options, and crisis and inpatient services – across the state and; the Mission Zero initiative, intended to eliminate ER boarding-housing mental health patients in a hospital emergency room, without treatment-until a bed is a psychiatric bed is available. Mission Zero has a number of critical components which are focused on providing intensive, coordinated community-based, less restrictive services for a patient to be stabilized during the crisis rather than in a hospital.
These two initiatives, which NH has already invested resources in, are in jeopardy if the Medicaid system is undermined by budget reductions proposed by our NH legislators. Combine these mental health program impacts with other factors: 1) that payments for inpatient psychiatric services in NH have not kept pace with actual costs to deliver those services which has meant that over the past decade a number of psychiatric inpatient facilities have closed and therefore psychiatric beds, when needed, are not available, and 2) that there is a shortage of mental health workers, many unfilled positions in the CMHC system, which makes it harder to get an appointment, longer wait times and more untreated illness. This is especially the case for psychiatric and child and family services; 3) the cost and affordability of healthcare overall for NH residents is out of reach, and many individuals, families, and businesses think they are no longer getting their money’s worth from insurance.
A Domino Effect for the Health Care System
All of these factors, combined with cuts in Medicaid funding, don’t just hurt individual recipients or community mental health centers; they ripple through our entire state. When people can’t get the care they need, they defer care, and they’re more likely to end up in emergency rooms, long-term care facilities, or crisis situations that could have been prevented. The burden on law enforcement and the EMT system will likely increase because they are likely to be engaged in many more mental health and health emergencies. People are likely to be held in jail on minor charges stemming from their mental illnesses or addictions, when they did not commit a crime, and what they needed was treatment. Overall, lack of mental health services places a heavier burden on hospitals (Emergency Departments), law enforcement, county jails, and social services, often at a greater cost to taxpayers and many in rural communities far from providers and the centers of care.
The ripple effects are especially impactful in rural hospital communities, which rely heavily on Medicaid payments, because the population is poorer, for the medical services they deliver. These payments have not kept pace with increasing workforce and operational costs. Over the years, hospitals and provider practices have closed or consolidated because they were no longer financially viable. Inadequate payments and hospital consolidation are likely to be accelerated by the changes in Medicaid funding, including the Children’s Health Insurance Program (CHIP), especially if NH and National policy makers continue along the track they are on. Studies show that when consolidation occurs, prices for healthcare increase. The Hospital mergers — market consolidation — can lead to health care price increases of anywhere from 3% to 65%, according to a 2022 RAND Corporation review and a KFF study. Everyone pays more when insurance payments are inadequate to cover costs, and when there is increased uncompensated care provided by hospitals because people have no insurance or are underinsured. It means hospitals and providers have to increase their prices, which, in turn, will mean our insurance rates will likely increase again.
A Call to Action for Legislators
Good mental health is fundamental to good overall health. Getting the right care at the right time in the right place can make all the difference to one’s health and well-being. I ask federal and state legislators to reject proposals that would outright cut Medicaid or restrict access to Medicaid by establishing work requirements that have not been shown to reduce costs, but just eliminate insurance enrollees because of administrative and procedural burdens. I am sure there are places to improve efficiencies in our healthcare system and save money, and I am confident that providers and health advocates would be willing to work with legislators to find those inefficiencies.
But, to just cut Medicaid and not subsidize the ACA doesn’t solve the problem; it makes it worse. Our healthcare insurance and financing systems are interconnected. Cutting Medicaid will put a financial burden on other private and self-insured health insurance systems, because providers will need to raise prices to make up the difference to cover their costs from the loss of Medicaid patients. The health of public insurance patients impacts the health of all, especially those in rural areas of the state. The quality of NH’s mental health and overall health rests with our legislators and the Governor. They need to do the right thing.
About Michael Cohen
Michael Cohen is principal consultant at MJC Health Solutions, LLC. Previous work included serving as an Executive Director of the National Alliance on Mental Illness, NH. His work has led to an understanding of how to meaningfully engage consumers in health policy making and advocacy. Working collaboratively and including all voices-stakeholders-has been an effective strategy for finding solutions to problems and building mutual understanding and trust in the healthcare delivery system. He served as a staff consultant to the Health and Aging Services Group and the Psychiatric Research Center, Geisel School of Medicine, Dartmouth College, developing and implementing health services research designed to improve health outcomes.