NH Medicaid Funding Faces Cuts, Threatening Healthcare Access
CONCORD — May 9, 2024 — New Hampshire’s healthcare system faces potential strain amid budget proposals threatening funding for Medicaid, the state’s public health insurance programme.The proposed cuts,coupled with other fiscal adjustments,could severely impact access to healthcare services. These changes raise concerns about the long-term implications for the 186,319 residents enrolled in Medicaid. It is crucial to understand the details to ensure access to healthcare remains protected.
New Hampshire’s Medicaid Funding Faces Potential Cuts, Threatening Healthcare Access
Healthcare access in New Hampshire could be significantly impacted by proposed budget changes that threaten to reduce funding for Medicaid and uncompensated care. while employer-provided health insurance covers the majority of Granite Staters, public health coverage remains a crucial safety net, ensuring access to healthcare services and supporting the state’s economic growth.
As of March 2025, 186,319 residents, approximately 13% of New Hampshire’s population, were enrolled in Medicaid. This state-federal partnership provides essential health coverage to low-income individuals, people with disabilities, and othre eligible groups.
Despite previous policy efforts to expand access to public health coverage, nearly one in 20 Granite Staters remained uninsured in 2023, highlighting the ongoing need for robust public health programs.
The Medicaid Enhancement Tax (MET) and Disproportionate Share Hospital (DSH) Payments
New Hampshire utilizes a Medicaid enhancement Tax (MET), a 5.4% tax on hospital revenue from inpatient and outpatient services, to help fund the state’s share of Medicaid and uncompensated care. This system is designed to offset the costs hospitals incur when treating patients who are uninsured or covered by Medicaid, which typically reimburses providers at lower rates than private insurance.
Under a law that expired last year, hospitals received back 91% overall of the amount they collectively paid in MET through Disproportionate Share Hospital (DSH) payments.
DSH payments are allocated based on factors such as hospital size, capacity, and location.Hospitals providing more services, generating higher revenue, and located in areas with greater need typically receive larger payments. For instance, in State Fiscal Year 2024, five of the 13 hospitals receiving DSH payments were located in municipalities where at least 20% of the population was enrolled in Medicaid in 2023.
Proposed Budget Cuts Threaten Hospital Funding
upcoming changes in the state budget could significantly reduce funding for DSH payments, leaving hospitals with fewer state and federal resources to support uncompensated care. With the expiration of an agreement between the state and hospitals, both the Governor’s and House’s proposals for the upcoming budget biennium would reduce allocations for DSH by $138.3 million,or 61%,between the current authorized amount for State Fiscal Year 2025 and proposed amount for 2026.
This potential reduction raises concerns about the ability of hospitals to continue providing essential services to vulnerable populations.
Additional Strains on the Healthcare System
Further complicating the situation, the house’s State Budget, currently under consideration by the Senate, proposes a 3% rate reduction for all Medicaid providers, which would reduce reimbursements for services. Potential federal funding changes could also shift more Medicaid costs onto the state, which already faces fiscal challenges.
Without continued support,health providers may be required to reduce services,hindering Granite Staters’ ability to access the care they need.
These proposed changes could create a ripple effect, potentially limiting access to care for those who rely on Medicaid.
