The SHARE Plan for Medicaid expansion received a chilly reception in the Senate Appropriations Committee this morning, as lawmakers expressed uncertainty over its fiscal implications.
The SHARE Plan would expand Medicaid coverage to an estimated 17,600 adults in Wyoming, many of whom are able-bodied and working but don’t have health insurance.
“The biggest problem in appropriations is the numbers are squishy all over the place,” Senate Appropriations Chairman Sen. Tony Ross (R-Cheyenne) said.
That lack of fiscal information is the result of a major amendment introduced this week by Sen. Charlie Scott (R-Casper) to restructure the previously cost-neutral Senate File 129 – SHARE Plan.
On Wednesday, the Senate Labor Committee passed Scott’s amendment to add health savings accounts and third-party management to SF 129. However, the committee provided no revision to the bill’s original fiscal note. Such information is typically produced by the Legislative Service Office, with assistance from agencies.
Department of Health director Tom Forslund projected the original SHARE Plan would cost $1.5 million in state funds in 2016, going up to $14.8 million in 2020. The department could cover those costs by transferring existing programs to the expanded Medicaid program.
The net effect would be cost neutral to the state General Fund, while bringing in more than $100 million a year in federal Medicaid dollars.
Lawmakers agree that adding health savings accounts and third-party administration to the SHARE Plan will cost more, but no one knows exactly how much.
“We don’t know what the additional cost is by having this third-party contract,” Sen. Ross said. “Charlie gave us his best estimate, but we don’t know.”
Speaking before the Senate Appropriations Committee this morning, Scott gave a projection that he characterized as a “WAG” — a term lawmakers use as shorthand for “wild-ass guess.”
He projected $100 per patient, per year as the cost of third-party management of health savings accounts. That totals $1.76 million for the 17,600 people expected to enroll in expanded Medicaid.
Administrative costs are shared on a 50-50 basis by the government and the state. So Scott projects Wyoming’s share would be $880,000 per year (half of $1.76 million) in added costs to the original SHARE Plan.
“These figures are what I come up with, and I don’t have staff support,” Scott said.
Scott expects the health savings accounts to offset that cost by reducing Medicaid usage by up to 15 percent. That number is backed up by Legislative Service Office’s review of academic literature.
Part of the cost uncertainty comes from not knowing if the state can get more than one company to bid on managing an expanded Medicaid program. The Department of Health typically receives just one bid for its only third-party administered program, KidCare CHIP.
The department’s previous analysis of third-party administration of health savings accounts projected costs 32 percent higher than a state-managed program.
Director Tom Forslund declined to comment specifically on Scott’s projections, saying the department’s previous estimates using KidCare CHIP had, “come up under intense criticism.”
Yesterday, Scott told WyoFile that he thought the department purposefully overestimated the costs of third-party administration and health savings accounts.
“Yeah, the way the state was approaching things, the Health Department was bound and determined to make that expensive because they didn’t like it. It’s simple as that,” Scott said.
Forslund predicts the department could still cover added costs of Scott’s amendment to the SHARE Plan, but doing so would require additional restructuring of the agency’s budget. For example, the department could transfer to Medicaid part of the costs of the Mental Health and Substance Abuse Services Program, which spends $61.7 million in state funds per year.
“I still stand by that, but if you end up with a bill that is significantly different, then my ability to repurpose gets tighter, or my cutting or repurposing gets deeper,” Forslund said.
In response to the uncertainty about costs of the amended Senate File 129, Sen. Ross drafted an amendment stating the SHARE Plan must be cost-neutral to the state. The amendment further authorized the Department of Health to reduce state-funded programs and shift the services to Medicaid.
The committee agreed to move the bill to the Senate Floor, but voted 4-1 along party lines to give it a “do not pass” recommendation.
Those voting “do not pass” included Sens. Ross, Bruce Burns (R-Big Horn), Jeff Wasserburger (R-Gillette), and Drew Perkins (R-Casper).
Sen. John Hastert (D-Rock Springs) opposed the motion.
“When the numbers are squishy, it makes it very difficult to vote for a budget,” Ross said. “I trust Charlie Scott … but as he said, that is a WAG.”