There
were many surprises when the Supreme Court (SCOTUS) issued its long-awaited
decision on the Patient Protection and Affordable Care Act (PPACA). I have written elsewhere why I think
Chief Justice John Roberts surprised us all by siding with the four
Democratically appointed justices to rule the individual mandate
constitutional. (http://www.thedoctorweighsin.com/why-did-chief-justice-roberts-do-it/)
These five justices also surprised
us by basing that ruling not on the commerce clause, but on the federal
government’s right to tax citizens.
The SCOTUS by a 9 to 7 vote also ruled that the Medicaid expansion was
constitutional as long as states would not lose all their existing federal
funding if they choose not to expand coverage as called for in the PPACA. This blog will examine the
ramifications of the Medicaid decision, which was also a surprise.
Much of
the debate around the PPACA had concentrated on the individual mandate and not
the Medicaid expansion, which as originally approved by Congress would have
added up to 17 million Americans to the Medicaid health insurance program. Health care reform advocates welcomed
this expansion because it extended care to poor people, but some state
officials, especially Republicans, opposed it because the states have budget
deficits and no easy way to pay for the perceived new costs associated with
expansion. Medicaid provides
health insurance for low income Americans and is jointly funded by the federal
and state governments. Although
states do not have to participate, all states at the present time do take part
in the matching program and agree to abide by the rules.
Prior
to passage of the PPACA, Medicaid covered: pregnant women and children under 6 who had family incomes
at or below 133% the Federal Poverty Level, children 6 through 18 with family
incomes at or below 100% the Federal Poverty Level, parents and caretaker
relatives on the cash assistance program, and elderly and disabled people with
Supplemental Security Income benefits.
Beginning in January 2014, The PPACA requires participating states to
cover almost all people under 65 earning household incomes at or below 133% the
Federal Poverty Level. The 2012
levels are $14,856 per year per person and $30,657 per year per household of
four. From 2014 to 2016, the
federal government will pay all of the costs of the expansion; after 2016 there
is a gradual decrease in federal support to 90% in 2020 and thereafter. The
single best summary of the entire SCOTUS ruling can be found at the Kaiser
Family Foundation here http://www.kff.org/healthreform/8332.cfm.
The
SCOTUS ruling on Medicaid expansion is complicated, but the take home message
is that the expansion is constitutional as long as the HHS Secretary is not
able to take away existing federal support to states that decide not to
participate in the expansion. All
other provisions in the PPACA are left intact.
New
Medicaid provisions in the PPACA include:
· Increase in primary care
provider payments
· Options to expand home and
community-based services
· Reductions in disproportionate
share hospital payments
· States maintaining eligibility
requirements in place as of March 23, 2010
Health
care reform advocates were pleased that the Medicaid expansion was upheld, but
they worry that the SCOTUS ruling would allow states to opt out of the
expansion. Mental Health America,
an advocacy group, stated, “The expansion of Medicaid also requires those who
are newly eligible to receive mental health and substance use services at
parity with other benefits. State
participation in the Medicaid expansion is therefore critically important.” (http://www.sacbee.com/2012/06/28/4596221/statement-of-mental-health-america.html)
Other advocates noted that the
SCOTUS ruling left the door open for states to make it harder for adults to
qualify for Medicaid. States could
throw some low-income adults “into a black hole with nowhere to turn for
coverage," said Deborah Bachrach, who was New York’s Medicaid director
until 2010. (http://www.kaiserhealthnews.org/Stories/2012/July/03/states-could-cut-medicaid-rolls-after-ruling.aspx)
Another complicating factor
is that under the PPACA most individuals with incomes less than 100% the
Federal Poverty Level are not eligible for subsidies to purchase insurance at
the newly formed state insurance exchanges and so may end up without access to
insurance. Such worries were
confirmed as real when Maine’s Attorney General William Schneider announced
plans to strike more than 20,000 Medicaid recipients from the state’s program
to save $10 million for the state’s strapped budget. Not everyone agrees that the Attorney General will be allowed
to make this cut. “‘The court
decision was not crystal clear,’ said Alan Weil, a former Medicaid director and
head of the nonpartisan National Academy for State Health Policy. ‘I’ve been telling people [the rules]
are still there.’” (http://online.wsj.com/article/SB10001424052702303684004577511103843368654.html)
The
progressive take on the SCOTUS ruling affecting the Medicaid expansion can
perhaps be best summarized by Ed Kilgore:
“The sad truth is that Republican governors and state
legislators have been claiming ever since ACA was enacted that the expansion,
even with the ‘sweet’ super-matches, would bankrupt their budgets. And the even
sadder truth is that many of these solons don’t think of this as primarily a
fiscal issue, but as an ideological test of their hatred of the ‘welfare
state.’ There’s a reason southern Republicans, perhaps even more than their
compatriots elsewhere, love Paul Ryan’s Medicaid ‘block grant’ proposal. They
want significant reductions in the existing Medicaid program, along with
structural changes that would make it unrecognizable as a low-income
entitlement. This involves a philosophical objection to giving poor people free
health insurance, not just a budgetary concern.” (http://www.tnr.com/blog/plank/104458/why-the-obamacare-ruling-isnt-the-slam-dunk-most-people-think)
The
reactions of many GOP governors seemed to confirm Kilgore’s conclusions. “We’re not going to shove more South
Carolinians into a broken system that further ties our hands when we know the
best way to find South Carolina solutions for South Carolina health problems is
through the flexibility that block grants provide,” said Rob Godfrey, spokesman
for Gov. Nikki Haley. (http://www.washingtonpost.com/business/economy/health-care-laws-medicaid-provision-too-good-to-pass-up/2012/07/02/gJQABxkJJW_story.html)
”‘Floridians are interested in jobs and economic growth, a quality education
for their children, and keeping the cost of living low,’ Governor Scott said. ‘Neither
of these major provisions in ObamaCare will achieve those goals, and since
Florida is legally allowed to opt out, that’s the right decision for our
citizens.’”(http://hotair.com/archives/2012/07/02/gov-rick-scott-no-medicare-expansion-for-florida-thanks/)
Similar defiant pronouncements were issued by Louisiana’s Governor Bobby Jindal
and Wisconsin’s Governor Scott Walker. One might assume that a conservative
state like Arizona with a controversial governor who is no friend of President
Obama would be likely to refuse to participate in the Medicaid expansion. For a fascinating look at how
complicated and not straightforward Arizona’s decision actually is please go to
http://www.azcentral.com/arizoannarepublic/opinions/articles/2012/07/05/20120705robert-robb-arizona-has-hard-choice-make.html.
At the
end of the day, it may be hard for GOP governors and legislatures to pass up
participating in the expansion.
While the GOP has focused on the costs passed onto to the states, some
detailed analysis shows that the Medicaid expansion can save money for the
states. Some state and local
governments currently help hospitals cope with providing uncompensated care for
uninsured patients to the tune of $10.5 billion or 18.5% of uncompensated care
nationally. Having more patients
covered by Medicaid would bring these costs down, which is why hospitals are
lobbying so hard for their states to participate in the expanded program. (http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/05/how-the-medicaid-expansion-also-saves-states-money/)
“’Texas hospitals recognize there are concerns with expanding
the Medicaid population, but given the state’s high number of uninsured, all
options for gaining insurance coverage must be closely considered,” Dan Stultz,
executive director of the Texas Hospital Association, said in a statement.
‘Without the Medicaid expansion, many will remain uninsured, shifting costs to
the insured and increasing uncompensated care to health-care providers.’” The Texas Hospital Association has
never been known for their progressive views, and yet all hospitals are
lobbying for states to participate in the Medicaid expansion (http://www.governing.com/blogs/view/gov-hospitals-likely-to-lobby-states-on-medicaid-expansion.html).
Expansion
of Medicaid would also reduce state spending on mental health services for poor
and uninsured patients; state and local governments spent $16.3 billion for
such services, 42% of the cost of state mental health services in 2009. The
Center on Budget and Policy Priorities estimates that state Medicaid spending
will ultimately go up by 2.8% by 2022 if states join the expansion. However,
that estimate “’actually overstates the net impact on state budgets because it
does not reflect the savings that state and local governments will realize in
health care costs for the uninsured…In fact states could end up with a net
gain.’” (http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/05/how-the-medicaid-expansion-also-saves-states-money/) For a state-by-state rundown on the Medicaid expansion
please go to this link to a New York Times blog post. http://economix.blogs.nytimes.com/2012/07/02/how-much-would-the-medicaid-expansion-cost-your-state/.
The
economic and political realities of the Medicaid expansion have already entered
into some gubernatorial races. Robert
Blendon, professor of health policy and political analysis at Harvard, said, “’Democratic candidates will say we
should implement the law and put in exchanges and go after as much funding for
coverage as possible, while Republican will say it’s too expensive.’” “’Medicaid will be an issue anywhere
Democrats have a chance to win,’ said Len Nichols, director of the Center for
Health Policy Research and Ethics at George Mason University. That includes
states such as West Virginia, North Carolina, Washington state and possibly
Missouri, he said.” (http://www.pennlive.com/newsflash/index.ssf/story/medicaid-expansion-already-an-issue-in-some-gubernatorial-races/68c350064991ce90c070836422118994) Democratic candidates will probably
push for states to participate in the PPACA’s Medicaid expansion because if
they do not, their state budgets will end up subsidizing Medicaid coverage for
lower income people in other states that do sign up for the program.
Governors
who refuse to participate in the Medicaid expansion may face a backlash from
voters like:
“Bunnie Gronborg, 64, of Festus, Mo., [who] said she has
two sons in their 30s who are single fathers who lost construction jobs and now
lack health insurance. She had hoped they could be covered by the Medicaid
expansion, and she doesn't buy the explanation that the state cannot afford it.
‘There's absolutely no reason’ to reject the expansion,’ except being
vindictive and playing political games with people's actual health care,’
Gronborg said.” (http://www.huffingtonpost.com/2012/06/29/medicaid-expansion_n_1638720.html)
Ezra
Klein thinks that the Medicaid expansion is just too good a deal for states to
pass up, even though some GOP governors will be tempted to gain political
points with the base by refusing to participate:
“And
governors also have to answer to non-Republican voters who don’t want their
state missing out on billions in federal dollars, and to the hospitals in their
state who have to treat uninsured patients that end up in their emergency
rooms, and the insured voters who end up paying for their uninsured brethren.”
(http://www.washingtonpost.com/business/economy/health-care-laws-medicaid-provision-too-good-to-pass-up/2012/07/02/gJQABxkJJW_story.html)
Another
hard to predict political result of the SCOTUS ruling on both the individual
mandate and the Medicaid expansion is the affect it will have on future SCOTUS
decisions. Some conservatives are
so mad at Chief Justice Roberts that they are calling him a traitor and saying
he should be impeached. How will
the Chief Justice react to the fallout?
Reagan appointee conservative federal judge Richard Posner speculates on
how Chief Justice Roberts will respond to his new situation:
“‘These
right-wingers who are blasting [Chief Justice John] Roberts are making a very
serious mistake. I mean, what would you do if you were Roberts?’ Judge Richard
Posner, of the 7th U.S. Circuit Court of Appeals, told NPR. ‘All of a sudden you find out that
the people that you thought were your friends have turned against you, they
despise you, they mistreat you, they leak to the press, what do you do? Do you
become more conservative? Or do you say, ‘What am I doing with this crowd of
lunatics?’”(http://www.politico.com/news/stories/0712/78182.html)
Before
the SCOTUS decided the case of National Federation of Independent Business v. Sibelius,
most of the attention was concentrated on the constitutionality of the
individual mandate. This blog post
has examined the reasons why the SCOTUS treatment of the PPACA Medicaid
expansion may have more important and more lasting effects on the
transformation of the American health care clinical delivery system.
