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Crotched Mountain

no. 1-0084

Exhibit 2: Excerpts from article in the Concord Monitor

Article published Oct 20, 2004 Medicaid Overhaul Outlined: Benson, Stephen Send Plans For Changes To Washington

By DANIEL BARRICK Monitor staff

Gov. Craig Benson has proposed a series of sweeping changes to New Hampshire's Medicaid program and he wants to begin working immediately with federal health officials to implement them. Benson's overhaul would reduce the state' s nursing home population by one-third, set up private health accounts for pregnant women and families with children, and give the state more control over how disabled people get medical care, among other changes.

The report is the latest step in an extended study of the state's Medicaid program. More than 150,000 of New Hampshire's poor, disabled and elderly residents are on Medicaid. Since April, Health and Human Services Commissioner John Stephen has sought to carve millions of dollars in savings out of the current system. . .

The report offers no details about how the proposals will affect New Hampshire's Medicaid budget, which is now shared equally by the federal government and the state. It projects that the first year of changes could cost the state several million dollars, but that savings could reach $100 million a year within five years. The report mentions but does not calculate "potential cost shifting to municipalities and other (health care) providers."

"I understand that time is short, so we need to move this forward quickly," the letter reads. "Commissioner Stephen . . . has a team ready to travel to Washington as soon as he is given the green light." . . .

New Hampshire's drive to restructure Medicaid is similar to efforts in many other states. Federal health officials have been cracking down on states that use loopholes in the Medicaid system to draw extra money from Washington. It was this kind of crackdown that forced Benson to give up $50 million a year in "Mediscam" dollars, a scheme in which the state diverted federal money earmarked for Medicaid to other purposes. Stephen has said the loss of this money is the major reason for his push to cut costs throughout Medicaid. His critics have questioned why the loss of "Mediscam" dollars, which were never used for Medicaid, requires cutting that program.

There are other pressures driving New Hampshire's Medicaid revision. The state's elderly population is growing rapidly, and elderly care is the most expensive piece of the Medicaid puzzle. . . .

Several of Benson’s proposals will require new legislation or regulatory changes. The entire Medicaid overhaul, whatever its final form, will need a federal waiver to work out the funding details. With an annual budget of between $600 and $700 million, Medicaid is one of the largest state programs.

Tuck School of Business at Dartmouth

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