CONCORD, N.H. (AP) -- New Hampshire senators set the stage Tuesday for a fight with the House and governor over a key measure in President Barack Obama's health care law — expanding coverage to the state's poorest uninsured adults next year.
The Senate's budget panel recommended establishing a study commission rather than expanding Medicaid to cover about 58,000 of the state's poorest adults under the federal Affordable Care Act. Senate Republican leaders balk at expansion for fear that federal funding will fall short of promises.
They're at odds with Democratic Gov. Maggie Hassan and the Democratic-controlled House, who want to expand Medicaid.
The issue will be one of the biggest differences the two chambers will have to resolve before the fiscal year begins July 1, said House Finance Chairwoman Mary Jane Wallner, a Concord Democrat who will head a committee next month negotiating over the state budget. The recommendation for a Medicaid study committee was part of a Senate Finance Committee vote to recommend passing a $10.7 billion, two-year budget.
Currently, New Hampshire's Medicaid program covers low-income children, parents with children, pregnant women, elders and people with disabilities. The expansion would add anyone under age 65 who earns up to 138 percent of federal poverty guidelines, which is about $15,000 for a single adult.
New Hampshire could refuse or postpone a decision, but there are benefits for states that choose to expand Medicaid now. The U.S. government will pick up the entire cost in the first three years and 90 percent over the long haul.
Hassan argues the federal government historically has fulfilled its commitments to Medicaid, and Hassan criticized the Senate panel's decision Tuesday as shortsighted and said the economy needs the estimated $2.5 billion New Hampshire would receive in federal spending over the next seven years if it expands Medicaid.
The state's decision whether to expand Medicaid could affect efforts to implement a managed care system for existing Medicaid clients that has been stalled because hospitals, mental health clinics and other providers refused to participate due to low state reimbursement levels for treating those patients.
The current budget, written by Republicans, cut state hospital aid for all but a handful of critical access hospitals. The 10 largest hospitals then sued over Medicaid rates, which complicated efforts to negotiate over managed care.
Hassan's budget would restore some of the aid cut in the last two years — but only if the hospitals pay taxes on their revenues at much higher amounts than the Senate believes is realistic. The state parcels out the hospital tax revenue to pay medical providers, for general state spending and as aid to hospitals.
The Senate budget also would restore some aid to the hospitals but they would have to agree to participate in managed care to benefit. The Department of Health and Human Services also has adjusted key rates to entice hospitals to participate.
But the three companies attempting to establish managed care networks signed contracts with the state believing Medicaid would be expanded under the federal law and increase their client base by thousands of people.
Senate Democratic Leader Sylvia Larsen said several times as the Senate's budget was being assembled that Republicans could have funded more programs if they accepted some of the House's revenue proposals. She pointed to one also endorsed by Hassan that delayed implementing tax breaks for business worth $13 million.
"This is about choices," she said.
The full Senate votes on the budget June 6. Then, the House and Senate will meet to negotiate a compromise before the fiscal year begins July 1.
Negotiations will be more difficult after the House killed a Senate proposal to legalize a casino that would have provided money for highways, higher education and development in the North Country.
In response, the Senate killed the House's bill to phase in a 12-cent gas and diesel tax increase to pay for highway improvements and took the unusual step of blocking its discussion as part of the budget.
Committee Chairman Chuck Morse, a Salem Republican, called it a good budget.