Jane Fonfara is the only person in her family with a job — and the only one without health insurance. Her husband, Dennis, 69, has battled a series of heart attacks and undergone multiple heart surgeries since he was 36.
He is covered by Medicare. Their 17-year-old daughter was diagnosed with Asperger’s Syndrome, which has so far prevented her from completing a full year of high school without taking time off. She receives health insurance until her 19th birthday through KidCare CHIP, a state insurance program for low-income children that is funded in part by the federal government.
But Fonfara, 56, a permanent part-time employee at the University of Wyoming bookstore in Laramie, manages her insulin-dependent diabetes with no health coverage. She receives no insurance through her job and can find no affordable plans on the private market. And even if she enrolled in an inexpensive health plan tomorrow, she would almost surely get no immediate coverage for diabetes, which insurers could classify as a pre-existing medical condition.
With no other alternatives, Fonfara does what many other chronically ill low-income adults in Wyoming do; she relies on charity. When she needs to see a doctor, she goes to the Downtown Clinic in Laramie, where a rotating staff of volunteer doctors and nurses donate their time. She pays nominal fees to see a provider and gets her medication for free. She takes two types of insulin and two other drugs every day, drugs that retail for hundreds of dollars a month. The clinic helps her apply to the patient-assistance programs of pharmaceutical companies, which donate drugs for low-income people.
“I’m very lucky,” she said. “By hook or by crook we have access to insulin, syringes, meters and everything I need. Without the clinic and the patient-assistance programs, I don’t know where I would be.”
If simply having a low income were enough to qualify her for insurance assistance, Fonfara would be fine. Her family scrapes by on about $19,000 a year — her bookstore salary combined with Dennis’s disability income. That is just about the federal poverty level for a family of three. But she does not fall into one of the categories of people covered under the federal Medicaid law. Under current law, Medicaid is available only to pregnant women, to children of low-income parents, to blind or disabled people, and to extremely low-income caregivers of the disabled.
The Wyoming legislature, like state legislatures across the country, has an opportunity under the Affordable Care Act (ACA) to change the insurance situation for Fonfara and some 18,000 other low-income adults in the state beginning in 2014. The U.S. Supreme Court ruled in June that the Affordable Care Act — a law that even the president now calls “Obamacare” — is constitutional. But it also ruled that the federal government could not compel states to expand Medicaid to low-income people not covered under the current law. As the law was originally passed, this expansion was mandatory, but the Court held that the penalty for states that did not do so (losing all federal funding for Medicaid) was too coercive. Instead of mandating expansion, the Court ruled that states can choose whether or not to cover everyone with an income less than 138 percent of the federal poverty level — about $26,000 for a family of three.
When WyoFile last visited the legislature’s deliberations on Medicaid expansion in early October, the lawmakers’ decisions remained on hold as they waited for data. Although the legislators received reasonably accurate enrollment and cost estimates in a report prepared by Milliman, Inc., an actuarial consulting firm out of Denver, the estimates for cost savings were still fuzzy. In the meantime, the Wyoming Department of Health has estimated that shifting costs of state programs for vulnerable populations to Medicaid could save the state almost $50 million over the next 10 years. Such fiscal comfort for lawmakers pales in comparison to what Medicaid expansion or the easy availability of affordable health insurance might mean for individual people who fear their doctor bills.
“I have what I need for diabetes now,” Fonfara said. “But I would like to have Medicaid. I would be in such deep trouble if I broke my leg. I’m not sure how I would ever pay the hospital bill.”
Fonfara’s doctor appointments must be carefully parceled out. She needs her visits to the clinic to keep her diabetes in check and to complete the ongoing reapplication process for her insulin and other medications.
“It would be the height of luxury just to go to the doctor,” she said. “I could go if I had a skin rash that didn’t look right or a cold that didn’t go away.”
Politics of Uncertainty
Medicaid expansion is without doubt the biggest healthcare item on this session’s legislative agenda. And for a few legislators, the notion that Wyoming should cover its working poor residents is a no-brainer. From 2014 until 2016, the first three years of Medicaid expansion, the federal government picks up 100 percent of all costs for newly eligible patients. That subsidy drops gradually to 90 percent in 2020. Patients like Fonfara would be able to stop worrying about medical bills, if they needed to see a doctor.
“We need to do what is right for the citizens of Wyoming,” said Sen. John Schiffer (R-Sheridan). “If it is possible for us to obtain coverage for so many people who do not have healthcare, that is something we need to do.”
But much of the debate in Cheyenne has so far focused on money — federal money — and what might happen if it runs out. Under current law, the federal government pays half the cost of covering Medicaid recipients (children, pregnant women, the blind, disabled and so on) but it will cover nearly the full costs for expanding Medicaid to cover people who have never before been eligible. The entire bill for covering people like Fonfara will go to Washington. Even after 2020, the law says that federal reimbursement remains at 90 percent. Even that lower reimbursement rate looks great on paper, but no one knows whether the debt-ridden, gridlocked federal government will be able to pay for the plan.
“I believe in that like I believe in the tooth fairy,” said Sen. Charles Scott (R-Casper). “They can’t afford the entitlements they have now.”
Scott, co-chair of the Labor, Health and Social Services Interim Committee, is vehemently opposed to expanding Medicaid, not least because he believes the federal government lacks the money to pay for expanded Medicaid coverage and to partially subsidize the health insurance premiums for millions of people who purchase insurance through the ACA’s new health insurance exchanges.
Equally troubling for Scott is the fact that the rapid growth in healthcare may make Wyoming citizens dependent on federal subsidies, which he believes the federal government will be forced to withdraw. At that point, the state must pay to keep the benefits in place — something it can ill afford to do, according to Scott — or take away the benefit it began offering citizens.
“It’s a teaser rate,” Scott said of the big federal subsidy for Medicaid. “It’s just like the car salesman who promises zero percent interest for a year. When the year is over, you still owe a lot of money and you have to pay the higher rate.”
Offering and withdrawing a benefit could have political consequences for members of the legislature. Scott calculates that if 18,000 people received and lost Medicaid coverage within the course of two or three years, each of the 30 members of the state senate would have 600 angry constituents. This year, Scott held off a Republican primary challenge by just 75 votes.
But it could also turn out that not offering coverage at all would anger people who desperately need treatments, especially surgery, which is not easily donated by hospitals or pharmaceutical companies.
Karen Thomas, a 45-year-old grandmother who also visits the Downtown Clinic in Laramie, has a number of acute medical needs that could be treated within a year or two. If she were to get coverage for even a short time and lose it, she would be better off, even though some long-term health problems would remain.
“I have cysts on my ovaries and a tumor the size of a basketball in my uterus,” Thomas said. “I need a surgery but I don’t have the money. If you have no money and no insurance, nobody will touch you.”
Although she and her husband are the de facto daycare providers for as many as eight grandchildren, they are officially a family of two with an income that fluctuates between $20,000 and $24,000. Thomas, who does not work, also suffers from a rare back ailment that could be corrected with surgery. Her husband is a shop manager in a diesel truck shop. In a poor year, they would qualify for Medicaid. In a better year, they could purchase generously subsidized coverage through a health insurance exchange.
“Even a year or two of coverage would give me an opportunity to get the surgeries I need,” Thomas said.
Costs and Benefits
There is more to Medicaid expansion than choosing whether or not to cover people who do not now qualify for the program. The state must also expand its Medicaid coverage to include people who are currently eligible but are not yet enrolled, and to include children who are newly eligible under revised rules.
When the so-called “individual mandate” goes into effect in 2014 (this remains the most controversial part of the ACA law, and the central feature upheld by the Supreme Court), all US residents will be required to buy health insurance if they do not receive it through their employers. As people go online to purchase insurance through the healthcare exchange, it is assumed that many will discover they qualify to be insured through Medicaid, even though they have never enrolled. These patients are referred to as “woodwork” cases, since they come out of the woodwork to enroll.
In addition, the qualifying family income for insuring children will rise from 100 percent of poverty to 138 percent, so more children will be insured through Medicaid as well.
This part of Medicaid expansion is not optional, and the federal government does not reimburse the state at 100 percent of costs. The federal government will reimburse woodwork cases at 50 percent, the current rate, and newly eligible children at 65 percent, which is the rate for KidCare CHIPS. So adding these cases to the Medicaid rolls will raise the state’s healthcare costs.
In a report released last month, the Wyoming Department of Health (WDH) estimates that about 10,600 new mandatory cases would be added between 2014 and 2016, which would increase costs to Wyoming by $79.4 million by 2020.
Expanding Medicaid to cover the new optional population will cost the state $71.7 million by 2020, considering the drop in reimbursement during the final four years of that period.
But according to the report, the state would save money by expanding Medicaid to the optional population, many of whom currently uses state health programs paid for out of the state’s general fund. By shifting costs from Wyoming’s state-funded programs to Medicaid, which would be paid for almost entirely with federal money, the state would benefit from “cost offsets” totaling $198.5 million through 2020, according to the report.
The WDH report summarizes costs and savings as follows:
- The combined costs of expanding Medicaid to cover both the mandatory and optional groups for state fiscal years 2014-20 would be $151.1 million.
- The combined budget offsets for the same period would be $198.5 million.
The net state general fund impact for the same period if Medicaid is full expanded is $47.4 million in savings.
“We as a state are fortunate to have many general fund programs that can be moved to Medicaid,” said Tom Forslund, director of the Department of Health. Forslund, who spent several days in December testifying before legislative committees in Cheyenne, acknowledges that the arguments for these savings are complex. But he is encouraged by the feedback he received so far.
“Overall, I sense a lot of legislators getting into the weeds,” Forslund said. “They are looking at the issue in depth. Some have made up their minds on the issue, but some are working very hard to understand the complexities. Frankly, I was impressed with the level of questions.”
Forslund cautions that if the Department of Health calculations are correct, “doing nothing” could cost more than expanding Medicaid to the optional population.
“If we only do the mandatory expansion of Medicaid,” Forslund said, “it will cost us $72 million over 10 years. If we do both the required and the optional expansion, it will generate $47 million. We’re talking about a swing of $120 million.” Wyoming cannot avoid the $72 million in mandatory expansion costs. The only way to save money, he emphasized, is to add the optional population to the state’s Medicaid rolls.
Another person who hopes to get coverage through optional Medicaid expansion is Donna Fulmer, who works 33 hours a week at a commercial laundry in Laramie. Fulmer, 53, gets the medications she needs to treat asthma, COPD and emphysema from patient-assistance programs. But the one medical cost she cannot defray with charitable contributions is an old emergency room debt.
Fulmer racked up emergency room bills of more than $8,000 when she rolled her vehicle outside Rawlins in May of 2003. She chips away at that debt little by little.
“I pay $25 or $50 every month,” she said. “Whatever I have. It’s down to about $500 or $600 now.”
Not every Wyoming patient is as responsible as Fulmer. A great many hospital bills in the state are never paid. Since 2007, the amount of money that is billed but never collected by Wyoming hospitals has grown nearly 60 percent, from $125 million to $200 million per year, according to the Wyoming Hospital Association. That figure also includes care donated as charity.
“We believe that Medicaid expansion would reduce the Wyoming hospitals’ uncompensated care costs,” said Dan Perdue, president of the association. “We are going to take every action we can to support Medicaid expansion in the legislative session.”
Although its membership is evenly split on the issue, the board of the Wyoming Medical Society (WMS) voted last month to support Medicaid expansion.
“Our physicians responded to the unmet need for care,” said Sheila Bush, executive director of the society. “Care is more affordable when delivered early on. We have members of our population who let an ailment go on too long. The result is often a lot of pain and an unnecessary trip to the ER.”
At the same time, WMS physicians wonder, like so many other people, how the federal government plans to finance the new programs.
“They look at the fiscal cliff debate and the red numbers and ask how expansion is possible,” Bush said. “There is a lot of concern among our members about whether the federal government will come up with the money.”
Waiting for a Bill
After reviewing the report submitted by the Department of Health, Gov. Matt Mead withheld his unqualified support for Medicaid expansion, citing the well-known difficultieshe has had getting information from the Department of Health and Human Services in Washington. But he has also pressed for a thorough debate in Cheyenne.
“This is an important discussion—and one that we must have,” Mead wrote in hisSupplemental Budget Letter and Messageto the Legislature, “It needs to be held publicly and to encourage wide participation. It needs to occur in the legislature.”
Although no bill has emerged from the Labor Health and Social Services Committee so far, Sen. John Hastert (D-Green River) is working on legislation, which he expects to file in the first days of the legislative session.
“It would be possible to add a couple of words to a bill in the Labor Health committee,” Hastert said. “But I thought a stand-alone bill is more appropriate.”
Hastert is well aware of his colleagues’ skepticism about the federal government’s ability to pay for new entitlements. But he does not take it as seriously as many Republican lawmakers.
“Virtually everything in the Wyoming Department of Health Budget has some level of federal matching funds,” he said. “The feds have been paying those bills for decades. Why should we think they stop paying now?”
Scott’s co-chair, Rep. Elaine Harvey (R-Lovell) does not see widespread support for expansion.
“The governor could have supported Medicaid expansion and he didn’t,” Harvey said. “The committee could have supported it. I would say that two very important opinions have been heard.”
Like Scott and many of the state’s doctors, Harvey is most concerned about where the money is going to come from. “Now that we have the fiscal cliff behind us, the deficit is the number one discussion,” Harvey said. “So much of the discussion is focused on entitlements and that just says Medicaid to me. I still have no faith that the federal government is going to balance its budget and keep their promises on the ACA.”
Although she says she believes the Affordable Care Act will ultimately fail, she is not categorically opposed to expanding Medicaid. “I think it would be a bad mistake to go in on the first year,” she said.
“When it comes to health insurance exchanges and expansion, we need to not participate for a year. At the end of the year, we are going to be in a stronger negotiating position with the federal government.”
Harvey, like Scott, does not want to offer Medicaid to Wyoming’s working poor unless she is sure that the offer is good over the long term.
“My biggest heartache would be that we would give it one year and take it away,” she said. “Next year will be a telling year. Let’s wait and see.”
Forslund acknowledges the political risks of offering and then withdrawing a benefit like health insurance. In his presentations to the legislature he has proposed a solution that would shift the blame for a failure of Medicaid from the state to the federal government, if the federal money should run out.
In the state Medicaid expansion law, he suggested to members of the state appropriations committee, lawmakers could build in a policy that specifies a “trigger” to end Medicaid if federal funding falls below 90 percent. Voting for the trigger now would not be as politically costly as voting to end Medicaid benefits in the future. He is sure to revisit this topic when he addresses the legislature as a whole on January 15.
Hastert says that some type of trigger mechanism will be included in his bill. “There will be language in the bill to address what happens if the federal match goes down in the future,” Hastert said. “I am not sure exactly how that language will read. I’m still discussing it with some of my colleagues.”
Equally important to Forslund, voting to expand Medicaid, even temporarily, would benefit Wyoming’s poorest citizens.
“The individuals who have been on healthcare for only three, four or five years still benefit,” Forslund said. “The quality of their lives will have been enhanced during the time they’ve been on the program.”
— Ron Feemster covers the Wind River Indian Reservation for WyoFile in addition to his duties as a general reporter. Feemster was as a Visiting Professor of Journalism at the Indian Institute of Journalism and New Media in Bangalore, India, and previously taught journalism at Northwest College in Powell. He has reported for The New York Times, Associated Press, Newsday, NPR and others. Contact Ron at email@example.com.