CONCORD, N.H. – As states struggle to cut Medicaid (search) costs, New Hampshire has proposed going further by making the poorest of the poor — even families with no income at all — contribute to their coverage.
No other state has ever gone so far. And even if the idea makes it through the Legislature, New Hampshire is going to need to federal approval.
Under federal law, the very poorest do not have to pay anything for Medicaid coverage. Those making higher amounts pay premiums or other expenses on a sliding scale according to their income.
Under the New Hampshire proposal, families with no income would have to pay $10 a child per month, up to a maximum of $30. Families who have some income but are still in the lowest category would pay as much as $20 a month, for a maximum of $60.
The move would save the state roughly $12 million over the next two years in a nearly $9 billion state budget, or about one-tenth of 1 percent.
The New Hampshire House at first embraced premiums, but backed off. But the idea is still alive in the Senate.
Supporters of the proposal say tough fiscal times demand tough solutions. They argue that making the poor pay would make them thriftier health care consumers.
"In order to balance the budget, you do all sorts of things to try to bring issues to the fore," said state Rep. Neal Kurk (search). "The problem is real. The solution we've come up with is probably not as good as it needs to be."
But supporters of the idea have not explained how families with no income would come up with the money. And advocates for the poor say the move would drive away desperate families and force them to turn elsewhere — to emergency rooms for charity care, for example.
"They don't have enough money to cover rent in New Hampshire," said Sara Dustin, a member of the state's Family Assistance Advisory Council (search). "If they do rent, they have food stamps that run out by the middle of the month. Any extra cash they might have has to be spent on food. They don't have $10."
Medicaid is a federal-state program that insures 52 million poor, disabled, elderly or pregnant Americans. Medicaid eligibility and coverage differ widely from state to state.
Many states are struggling to cut Medicaid, which is growing so fast it is on track to overtake education as their biggest single expense. Some states are reducing benefits or making patients pay more. Some, like Tennessee, Mississippi and Oregon, are trying to drop tens of thousands from the rolls.
In New Hampshire, Health and Human Services Commissioner John Stephen, who proposed the premiums, has a reputation for championing dramatic changes to Medicaid. For example, he has proposed to penalize nursing homes that admit people with money who could fare just as well at home or in other less-expensive settings.
But no state has charged premiums for children from families with zero income, said Cindy Mann, a Georgetown University professor. She said poor families are extremely sensitive to even small premiums and copayments, and charging them for their care could lead some to drop out of Medicaid.
Mann said that when Oregon began charging $6 to $20 a month for poor adults in an optional Medicaid program two years ago, enrollment dropped by half in less than a year, from 100,000 to 51,000. "They didn't expect they would lose people," she said.
Washington state got federal approval last year to charge monthly Medicaid premiums ranging from $15 to $25 per child for the poorest of the poor. But the state held off charging the premiums because the economy improved. And in any case, families with no income would have been exempted.
Washington state Sen. Rosa Franklin (search) fought against the premiums.
"Five dollars to a poor family is like $100 or $500," said Franklin, a Democrat. "It is not that they do not care for their children, it is simply that they do not have the money."
In New Hampshire, the poorest of the poor are families whose income ranges from zero to 185 percent of the federal poverty level.
Steve Norton, the state's Medicaid director, said New Hampshire's proposed premiums would lead to a 5 percent drop in Medicaid enrollment, or about 3,000 children out of 63,000 now in the poorest-of-the-poor category.
One newspaper called the proposal an "infamous moment" in New Hampshire history comparable to the time a state senator suggested homosexuals should be allowed to donate blood "as long as they donated all of it."
"There's a hole in the logic behind the idea," the Concord Monitor said in an editorial. "Generally, people with little or no income have no money. Of course, crime is an option."