Nursing Home Lawsuit Could Hit the State Budget Hard

Until a couple of years ago, here’s how the cost of Medicaid nursing home care was divvied up.

Washington paid half, the state paid a quarter of the bill and the counties paid the other quarter.

But in 2007, the state passed a law that doubled the county portion and took the state out of the picture.

In exchange, the state shouldered the entire cost of other services, such as prescription drugs and juvenile services that counties used to pay for.

Lawmakers said it was an even swap.

Miller: We feel it was not a swap

Betsy Miller runs the New Hampshire Association of Counties.

The counties sued to overturn the new law arguing that, in a few short years, taking care of low income elderly will be much more expensive than the items the state picked up.

In the eyes of the counties this shift is an unfunded mandate.

Miller: the state has unilaterally expanded the program responsibility upon the counties for long term care. But the state did not get our approval and did not ask for it.

The counties argue that this puts unfair pressure on property tax payers.

Miller says, if this were a state burden, the load could be shared among a variety of tax payers, not just property owners.

The state argues there is no unfunded mandate for several reasons. Andrew Livernois is the lawyer for the state. Livernois says the state did not need to get the counties’ approval for the new funding arrangement because they had accepted the task of taking care of the elderly decades ago.

Livernois: This has been an obligation that the counties have had going back to the 1930’s. It was a continuation of an existing obligation and there was no requirement on the part of the legislature to get the counties’ assent.

Livernois also says the legislature made sure the counties would get a fair deal. The law capped the amount the counties must pay in 08 and 09. If the cost goes higher, the state makes up the difference.

It would be hard to imagine a worse time for this issue to come up.

The recession has put state budget writers on the defensive.

They are struggling to close a 90 million dollar gap by June 30th. .

They face an estimated shortfall of several hundred million dollars in the next two year budget.

If the court sides with the counties completely, there would be no cost sharing arrangement whatsoever.

If the court rolls back the clock to the deal that used to be in force, that would still leave the state with about 50 million dollars in play.

Senator Lou D’Alessandro chairs the Senate Finance Committee.

D’Alessandro says he and his colleagues are well aware of what’s at stake.

D’Alessandro: If you’re sane, you’re nervous of course. Absolutely. But you have to do what you have to do and when you make decisions, you make them with the best facts that are available and after consultation with everybody involved and I believe we did that.

D’Alessandro thinks that the court will agree that the state had the best interests of everyone in mind, including the counties.

But if the court disagrees, budget discussions could suddenly get a whole lot worse.

For NHPR News, I’m Jon Greenberg