Josiah Bartlett Center - The Rainy Day Fund & ER Usage Under Medicaid Expansion

Weekly Update from the
Josiah Bartlett Center

Keeping you up to date on our latest research
on the issues impacting New Hampshire

Demand that the Legislature Follow its Own Budget Law

The law requires that any surplus be automatically deposited into a Revenue Stabilization Account, commonly called a rainy day fund.  In theory, the money is a small reserve collected in good times and set aside for unexpected shortfalls (just as you might save at home in case your furnace dies).

Politicians, however, are not happy planning for the long term at the expense of their current needs. In this way, they are similar to small children who are still developing impulse control.

Saving money to avoid a crisis five or ten years from now is not nearly as politically fun as spending it now and making someone happy before the next election. As a consequence, politicians of both parties routinely enact a “temporary suspension” of the rainy day fund law as part of the budget. That way the leftover money from before can be spent rather than saved....Click here to keep reading

  A few years ago, Oregon chose to expand Medicaid coverage to the population now under consideration for coverage here in New Hampshire. In Oregon’s case, state funds would cover the total cost of the program. The problem for Oregon policy makers was that there was only enough money available to cover some, not all, of those eligible. To remain fair, coverage in the expanded Medicaid program was chosen by lottery.

This lottery presented a unique opportunity for researchers. Given the nature of the process, it created a randomized sample that received Medicaid coverage, while those that did not became a de facto control group. Budgetary limits had created the perfect case study to analyze the effects of Medicaid Expansion.

So far the results have 
been mixed, but the recent data on emergency room (ER) usage is troubling. After 18 months, the study has found that ER usage among the newly covered Medicaid population was 40% higher than the control group. Not only is this a sharp increase in real terms, but keep in mind the control group; it is people with no insurance coverage at all, who often uses emergency rooms as their primary source of healthcare.... Click here to keep reading