ND Blazes Medicaid Expansion Trail

Small-town, rural North Dakota's commercial bidding approach to expanding Medicaid could have big, national implications.

In the two dozen states that have resisted the federal drive to expand the program that funds medical care for the poor, fierce opposition from conservative governors and lawmakers has ground the expansion effort to a crawl.

In several states such as Arkansas and New Hampshire, coalitions of expansion advocates and business-oriented Republican legislators have boosted Medicaid's rolls through the "private option" approach. This enables eligible adults to obtain health coverage through subsidized purchases of commercial health insurance policies on the recently launched individual health exchanges.

North Dakota has developed another approach. It is inviting commercial insurance carriers to bid for the opportunity to provide health coverage for the state's 20,500 newly Medicaid-eligible poor adults. State officials solicited bids last August from carriers that "had to have a policy that covered all the essential health benefits," says Julie Schwab, medical director of the state Department of Human Services.

Two commercial carriers placed bids: Blue Cross Blue Shield of North Dakota, the state's largest health insurer, and Sioux Falls, SD-based Sanford Health. While both bids were accepted, only Sanford decided to move forward with North Dakota's Medicaid expansion effort, which launched enrollment on Jan. 1.

As of early June, 9,000 North Dakota residents had enrolled into Medicaid coverage through Sanford, an integrated health system and the largest employer in the Dakotas. Schwab says enrollment peaked in the first quarter of the year, through the end of open enrollment on the public exchanges, and has been slow but steady since.

"We have hospitals very interested in getting people enrolled to reduce uncompensated care," Schwab says.

Ruth Krystopolski, president of Sanford Health Plan, says the not-for-profit viewed bidding for North Dakota's Medicaid expansion policy as an opportunity that fit with a key element of the organization's core business philosophy. "Sanford is a proponent of public-private partnerships."

Determining the number of previously uninsured Americans who have enrolled in health coverage this year through Medicaid expansion and the new exchanges has been bedeviling statisticians across the country. As an integrated health system, Sanford has insight about how many previously uninsured North Dakotans have obtained Medicaid expansion policies.

"These are people who are showing up for services who weren't paying before," Krystopolski says, adding that Sanford estimates 57 percent of the North Dakota residents who have received medical services through the new Medicaid expansion policies were receiving uncompensated care in the past.

Nearly 25 percent of Sanford's Medicaid beneficiaries in North Dakota had never received medical services before at one of the integrated health system's clinics in the state, according to Krystopolski.

In North Dakota, the private bidding option to Medicaid expansion provided a politically palatable path forward. The political process of moving Medicaid expansion forward nationwide will need all the help it can get, says Nicholas Manetto, director at DC-based FaegreBD Consulting.

"You got the initial group onboard – mostly Democratic states," said the former press secretary for U.S. Rep. Chris Smith, (R-NJ). "The purple states, for the most part, are still evaluating. The others will fight."

Manetto says many Republican lawmakers in deeply "red" states are loath to appear supportive of any facet of the federal Patient Protection and Affordable Care Act, particularly Medicaid expansion. "The arguments against it are focused on the reputation of Medicaid today," he says. "It will be a long slog to move Medicaid expansion in the states that remain."