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The Honolulu Advertiser
Posted on: Saturday, April 3, 2010

Lingle estimate on health bill criticized as incomplete

Associated Press

HONOLULU When Congress passed health care reform legislation last month, Gov. Linda Lingle initially claimed it would force the cash-strapped state to spend $300 million to expand coverage of low-income residents.

But during an interview Thursday on Hawaii public television, Lingle took a different approach: When asked about how the reform law will impact the state, she responded, "At this point, we just don't know."

The governor's office referred questions to state Human Services Department Director Lillian Koller, who acknowledged this week that Lingle's original assertion on March 21 doesn't factor in the hundreds of millions of federal dollars the new health law promises to provide the state to cover all or most of those additional costs.

Moreover, Koller said the Republican governor's estimate is based only on the first half of a voluminous, complicated two-bill package that President Obama signed into law. Koller said her staff and consultants are still reviewing the second measure, commonly known as the "reconciliation bill," and are not ready to modify their cost estimates.

Whatever the outcome of that review, Koller insisted Hawaii will end up spending significantly more for low-income health care because of the new law.

"There's no way (the new health law) is going to be budget neutral. It can't be. Forcing us to add more people on Medicaid can never, ever be cost-neutral," Koller said in an interview.

But supporters of the new law contend Lingle's and Koller's assertions are incomplete.

"The figures quoted by the state are outdated and do not take into consideration changes to the Senate bill that were made through reconciliation," said Peter Boylan, spokesman for U.S. Sen. Daniel Inouye, D-Hawaii.

Rep. Mazie Hirono, D-Hawaii, also questioned Lingle's calculations.

"For instance, the governor does not seem to take into consideration that the federal government will cover 100 percent of the cost of expanding Medicaid. This is part of the reconciliation legislation," she said.

The new law will increase income ceilings for potential Medicaid recipients from 100 percent of the federal poverty level, which in Hawaii is $2,113 a month for a family of four, to 133 percent, or $2,810 per month.

But that expansion does not begin until 2014. Between then and late 2016, the law commits the federal government to fully cover the additional Medicaid costs that states incur.

The Urban Institute, a Washington D.C., think tank, estimated that in Hawaii, 117,000 parents, childless adults, children and pregnant women could at that point become newly eligible for the program.

From 2017 to 2019, the U.S. government is to pay between 93 and 95 percent of the state's added Medicaid costs, federal officials said. Starting with fiscal year 2020, the federal government is to pay 90 percent.

"Hawaii alone could receive $1 billion in federal funding to support the coverage expansion," said Nick Papas, a spokesman for the U.S. Department of Health and Human Services.

Hirono also cited an $8.5 billion fund the new law provides to Hawaii and 10 other states to share over 10 years because their Medicaid programs already cover childless adults.

Koller contended Hawaii may not get all of the money the law promises.

"It's oversimplified in the way it's being described," she said. "When you look at the actual language, it's less clear what it means and how it applies to us."

The cost of expanding the income ceiling from 100 to 133 percent of the federal poverty level comprises more than a third of the $300 million in additional state costs that Lingle has cited to bash the new health reform laws.

Another $100 million over 10 years is attributed to a provision that will immediately require states to renew Medicaid recipients using a less vigorous eligibility review, Koller said.

A fourth provision relating to fees for primary care doctors will cost an additional $50 million over five years, she said.