Just weeks before the primary election for Wyoming governor, incumbent Matt Mead surprised some members of the public by saying he’s exploring options for Medicaid expansion.
In an interview on Wyoming Public Radio, Mead said, “I don’t think we can just sit here and do nothing.” He voiced concerns about the $200 million in uncompensated care at Wyoming hospitals, then added that Wyoming is missing out on millions of Medicaid dollars that other states are receiving under the expanded program.
Some listeners might have interpreted that to mean Mead now supports Medicaid expansion, but members of his staff say that’s not the case. He is simply following up on negotiations with the Center for Medicaid and Medicare Services (CMS) at the behest of the legislature.
“He opposes the Affordable Care Act, and all of his concerns about Medicaid expansion remain in place,” said Mead’s policy director Mary Kay Hill. “At the same time you have this legislative footnote that provides that he have a conversation with CMS about what kind of Wyoming approach might be undertaken.”
At the end of the 2014 legislative session, lawmakers adopted an amendment to the budget bill saying Gov. Mead “may” meet with Medicaid officials to explore options for designing a Medicaid expansion plan for Wyoming. In mid-July, the first of those meetings took place, but brought no conclusive solutions.
The amendment carried several parameters for designing a Wyoming-specific plan for expanding Medicaid.
“I think he interprets the footnote as establishing an expectation that we look into these things,” Mary Kay Hill said. “In this issue he is open to a conversation.”
After a U.S. Supreme Court ruling in 2012, states were given the option to expand Medicaid, which had previously been mandated by the Affordable Care Act.
In Wyoming, the expansion would provide greater access to healthcare for an estimated 17,600 low-income adults who aren’t eligible for Medicaid, but also don’t make enough to qualify for subsidies on the federal health insurance exchange.
In the past, Mead’s reasons for opposing Medicaid expansion, he said, focused on the poor implementation of the ACA, and his uncertainty that the federal government will be able to keep its financial commitments to the program. One of his first acts in office in 2011 was to join a lawsuit opposing the Affordable Care Act.
One critic of Mead’s stance on Medicaid expansion is Democratic gubernatorial candidate Pete Gosar, who said that the Mead administration’s lack of support for Medicaid has denied “proper healthcare” to 18,000 people.
“This administration’s decision to start looking at the possibility of expanding Medicaid in Wyoming comes four years too late,” Gosar said in a statement. “The people of Wyoming are getting wise to the timing when their governor decides to do the right thing once every four years. Right is right all the time and people see that.”
In his 2013 State of the State address, Mead said he wanted Wyoming to present its own alternatives for Medicaid expansion to the CMS. Mary Kay Hill said this is the approach Gov. Mead is now taking, even as he continues to oppose expansion.
No one seems to know what shape Wyoming’s plan for Medicaid expansion might take. Dept. of Health Director Tom Forslund and Department of Insurance Director Tom Hirsig, Health and Human Services Director Kim Gillian, Mead, and state officials met with CMS on July 17.
“I don’t know the direction yet,” Forslund told WyoFile. “This is just another one of our ongoing discussions — nothing new to report. I anticipate this going on for some months.”
Forslund said the discussions centered on what kind of expansion would work in Wyoming, and what would be permissible under federal law. “We can dream up all kinds of ideas,” Forslund said, “but if it is not in compliance with federal guidelines it doesn’t mean anything because they won’t approve it.”
Forslund anticipates that as the discussions go on for months there will be periodic briefings to the legislature’s Joint Labor, Health, and Human Services Committee.
The earliest possible legislative briefing could be at a Labor Committee hearing in September; the final report of the study is due November 1, after which the committee would consider the alternatives.
Meanwhile, Medicaid expansion advocates are calling for greater transparency in the process.
“People should know what they are doing and what they are thinking about,” said Dan Neal, director of the Equality State Policy Center (ESPC). “It seems like they could be telling us that, ‘yes we met, we discussed these options,’ … to give us an idea of what is going on and what we can expect.”
Mary Kay Hill said the governor isn’t trying to hide anything. “I would emphasize that the governor has participated in a single phone call,” she said. “In terms of transparency, there really isn’t anything to share. I think the governor would be eager to have public review of any kind of proposal as soon as one is on the table.”
The ESPC is one of several organizations pushing for Medicaid expansion in Wyoming. The organization has focused its arguments on the opportunity to provide services to Wyoming’s low-income residents, and also on the fiscal consequences of bypassing the expansion. The organization recently posted a dollar counter on its website to illustrate how much federal money Wyoming has foregone by not opting to expand Medicaid.
“We are just a few dollars short of $63 million that we could be bringing home,” Neal said last week. “This is money that could be flowing through every Wyoming community. We know people who would qualify for this live in every county in the state.”
“To turn this into a big dispute of whether we are going to support a particular (presidential) administration or not is poor policy, and they should act,” Neal said. “Bring the money home!”
The Wyoming Hospital Association also supports expanding Medicaid. Doing so would help reduce the $200 million in uncompensated care Wyoming hospitals face every year.
“There are folks that are currently not eligible for Medicaid that have no insurance and struggle to pay their hospital bill, that ends up being bad debt for the hospital,” said Neil Hilton, vice president of the Wyoming Hospital Association. “By having the additional folks in those circumstances be part of Medicaid, the hospitals would be able to take some additional reimbursement through Medicaid dollars. That helps reduce the bad debt.”
Defining the “Medicaid gap”
Current Medicaid coverage categories in Wyoming include income-qualified children, pregnant women, families with children, and individuals who are aged, blind or disabled.
Low-income adults who don’t qualify for Medicaid under these categories can qualify for subsidies on private health insurance premiums through Healthcare.gov if they earn more than 100 percent of the federal poverty level. That amount is $11,490 for a single childless adult. A family of four qualifies for subsidies on Healthcare.gov if they earn more than $23,550.
Since the Mead administration and the legislature have opted to not expand Medicaid, the state has a Medicaid “gap” in healthcare coverage for those who don’t earn enough to qualify for health insurance subsidies, and who also don’t qualify for one of the categories of Medicaid eligibility. Some 17,600 adults in Wyoming fit into this category — an estimated 4,000 to 5,000 of these are tribal members on the Wind River Indian Reservation.
While these individuals could buy private health insurance, Neal said the likelihood they would do so without a subsidy is highly unlikely. “If you are choosing between food and housing and insurance, what are you going to take?” he said.
Expansion models under consideration
Wyoming has several models at play when it comes to expanding Medicaid. Several of those models have already been rejected.
The state could opt for “traditional expansion.” In other states that have expanded Medicaid, adults and families who make less than 138 percent of the federal poverty level qualify for Medicaid.
The federal government would pay 100 percent of this cost for 2014-2017, with the share dropping to 90 percent federal and 10 percent state in the year 2020. The Wyoming House of Representatives voted not to consider legislation modeled to this approach in the 2014 session.
Another option is the “Arkansas plan” to use federal dollars to buy private health insurance for those who would otherwise qualify for expanded Medicaid. The Wyoming Senate voted not to consider a bill modeled on the Arkansas plan during the past session.
A third option is “Medicaid Fit,” which was described in a 2013 report from the Wyoming Department of Health. This plan would take federal dollars to administer the expanded Medicaid program, but design a separate benefits package that provides reduced services compared to existing Medicaid enrollees in Wyoming.
Several other possibilities were discussed in the 2013 report, but none has gained traction among Wyoming lawmakers and Gov. Mead’s administration.
In his interview with Wyoming Public Radio, Mead said he is intrigued by state expansion plans in Utah and Indiana. The Utah plan would seek a federal block grant to cover private health insurance, while using cost-sharing and making enrollees subject to work requirements.
The Indiana plan, championed by Gov. Mike Pence, would expand Medicaid to cover people making 138 percent of the federal poverty level, then provide reduced benefits to enrollees who don’t make sufficient deposits in health savings accounts set up under the Healthy Indiana program.
The Medicaid expansion that the Wyoming legislature sketched out during its 2014 budget session suggested a number of possible policies for Gov. Mead and state officials to explore. The relevant text, found on page 119 of the budget bill, says Wyoming’s Medicaid expansion application “may” include things like cost sharing, wellness benefits, and health savings accounts.
One of the chief architects of the Medicaid expansion amendment is Rep. Eric Barlow (R-Gillette), who drafted it after seeing all the other options for Medicaid expansion fail to win introduction. He said he didn’t necessarily support expansion, but wanted to see the debate go forward.
“There are components of the Affordable Care Act that have been problematic all along,” Barlow said. “The most important thing is to continue the discussion about what opportunities there are for Wyoming to participate in this.”
Barlow, who sits on the House Labor committee, said he wanted legislators to be more informed about what passing or not passing Medicaid expansion would do for Wyoming citizens eligible for the program.
“I don’t think we as a committee understood what it really meant to say yes or no in individuals’ lives,” Barlow said. “That’s why I felt so strongly that we needed to continue the dialog, and the way that got done was to have the executive branch take a look at it and have discussion with CMS about some novel approaches.”
After introduction of the amendment, the Senate added several provisions, which Barlow and the House members of the Joint Conference Committee agreed to.
In its final form, the amendment says the proposed plan “shall” be fiscally neutral to Wyoming, pose no detriment to small businesses, and give preference to private party administrators of Medicaid benefits.
That last provision on private party administrators represents a change from current Wyoming policy, in which the Dept. of Health serves as the administrator for Medicaid.
The state currently pays about $7.5 million in salaries to manage the $517 million in services provided to Medicaid recipients, according to a 2013 report.
If private party administrators took over administration, it would help to not grow the size of government; the state would be outsourcing its Medicaid accounting to a private company at public expense.
“One thing they will push for is Medicaid would be managed through private providers,” Neal said. “Ninety-seven percent of the money in (the state’s budget for Medicaid) goes to healthcare. We have a very efficient program. I’d prefer to see the state run it because I think it is a better use of tax dollars.”
One of the major players in Wyoming’s Medicaid debate is Sen. Charlie Scott (R-Casper) a veteran legislator who is the senate chair of the Labor, Health, and Human Services Committee. Last year, he proposed an “Obamacare relief bill” that involved a 20-hour a week work requirement, but it did not become law.
Scott named several kinds of Medicaid expansion he would not support should they come out of Mead and Forslund’s discussions with CMS. “If they come back with a traditional Medicaid program or a program like Medicaid Fit, I will do my best to keep it from passing,” he said.
Scott said he prefers to see a health savings account implemented, similar to what Indiana has done. Recipients would get a certain amount of money for healthcare, which they would have to budget for their needs. That is intended to provide an incentive for patients to keep their costs down, while also giving the state some power to keep Medicaid costs under control.
“The Indiana plan is a good one to imitate, which uses health savings accounts,” Scott said. “If they come back with something like that, that’s something I would support.”
Scott has doubts that the U.S. government will be able to continue funding Medicaid at the promised levels.
His critics doubt the sincerity of this argument, pointing out that Wyoming takes hundreds of millions in federal money into its budget each year without questioning the federal government’s ability to pay the bills.
Scott’s interest in health savings accounts relates to their ability to coax patients into controlling their costs — if they spend more than the federal government pays into their accounts, they would face a higher contribution level or insurance premiums. That, Scott says, gives the patient an incentive to ration their healthcare, and offers the state a lever to control costs.
“Then when the feds do renege on their promise, (the state of Wyoming) can afford to continue to fund it,” Scott said.
“The costs won’t spiral out of control. I think the feds will renege on it. I don’t think they can do otherwise.”
Forslund will present his final report on the proposed Medicaid expansion application on November 1. Meanwhile, the Equality State Policy Center’s dollar counter says Wyoming has foregone $64.5 million in federal funding by opting not to expand Medicaid, and the number continues to grow.
“The best deal they could have gotten was to take the Medicaid expansion — 100 percent of costs were (going to be covered by federal funds) for three years,” Neal said. “What keeps getting lost is there are some 20,000 people in Wyoming who don’t have healthcare because our political leaders failed to act.”
CORRECTION: A photo caption was corrected to represent the correct photo credit, on 7.29.14.