Fix Health Care Policy

Pressing States to Participate in Medicaid Expansion Is a Bad Idea

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Heritage’s Stuart Butler, director of the Center for Policy Innovation, wrote at the JAMA Forum yesterday on the Obama Administration’s push for states to participate in the expansion of Medicaid. Here’s an excerpt from Butler’s piece:

Even after the Supreme Court struck down a requirement of the Affordable Care Act (ACA) that required states to expand Medicaid coverage to low-income individuals,* states still seemed to have a juicy carrot to do so. That’s because 100% of the extra cost for states will be met by Uncle Sam for the first 3 years, starting in 2014. And although the federal share of costs for these newly covered individuals will gradually decrease thereafter to 90%, that is still a much bigger share than for “regular” Medicaid.

Not surprisingly, the Obama Administration is pressing states to see this as a deal that no sensible governor and state legislature can refuse and to think that doing so would harm the state and its clinicians and health care facilities. And even some Republican governors, such as Rick Scott of Florida, say there is no sense in leaving federal money on the table. Still, others are balking, such as Louisiana’s Bobby Jindal. Are they lacking common sense?

Read the rest on The Foundry…

Tags: coercion, expansion, JAMA Forum, Medicaid, ObamaCare, States

Chart of the Week: The States That Have Expanded Medicaid

 

Expanding Medicaid will be costly for most states. The authors of The Patient Protection and Affordable Care Act of 2010 (Obamacare) threatened to strip all federal funding for states’ Medicaid programs if they refused to expand the entitlement.

But 27 states filed suit over Obamacare and the Supreme Court struck down this threat as coercive, making the Medicaid expansion optional for states. Now, governors and state legislatures are debating whether to expand or not, as the above presentation shows. As Nina Owcharenko notes, Medicaid needs reform, not expansion.

Of course, states are tempted by the offer of new federal dollars. But, as Heritage expert Drew Gonshorowski writes:

The Medicaid expansion represents a massive increase in federal and state spending. Although some claim that states could experience savings, it is clear that this is the exception, not the rule. Expanding Medicaid will ultimately cost states in the long run.

For a breakdown of state-by-state costs, click here.

Read the rest on The Foundry…

Tags: expansion, federal funding, Medicaid, ObamaCare, strikedown, Supreme Court

Obamacare’s Medicaid Trap

While Members of Congress are arguing about defunding parts of Obamacare, the rubber is meeting the road in the states. Governors and state legislatures are sweating decisions about setting up government health care exchanges and expanding the Medicaid program.

While the offer of additional federal money for Medicaid is tempting for many governors and legislatures, it is a trap. And it is just one of the reasons Obamacare doesn’t work.

>>> STATE OF CONFUSION: Maps of State Positions on Obamacare Lawsuits, Exchanges, and Medicaid Expansion

The Medicaid expansion is a crucial part of Obamacare that is supposed reduce the number of uninsured. But adding millions of people onto an already strained program doesn’t help anyone. The Medicaid program is already struggling to provide care to its core obligations—a diverse group of low-income children, disabled people, pregnant women, and seniors. So dumping more people into the program will make matters worse. Research shows that Medicaid enrollees already have worse access and outcomes than privately insured individuals.

This will have real effects on America’s needy, including children. Dr. Hal Scherz has seen the problems Medicaid creates firsthand. He practices in the only pediatric urology group in the state of Georgia, and more than half of his practice is made up of Medicaid patients.

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Tags: America's needy, exchanges, expansion, lawsuits, Medicaid, repeal the law, state of confusion

Obamacare and the Medicaid Expansion: How Does Your State Fare?

The Medicaid expansion is touted by proponents of Obamacare as a “no-brainer.” While it is true that some states may see projected savings, it is erroneous to claim that this experience applies to every state.

Proponents predict that by expanding Medicaid states will be able to reduce payments to health care providers, such as hospitals, for uncompensated care. As a matter of fact, nationally, the opposite is true:

• 40 of 50 states are projected to see increases in costs due to the Medicaid expansion.
• The majority of states see costs exceed savings when the federal match rate is lowered after the first three years. From there, state costs continue to climb, dwarfing any projected savings.
• State savings are concentrated in large states. New York is estimated to see $33 billion in savings, while Massachusetts is estimated to save $6 billion over 10 years. Because of the design of their current programs, these states have a unique opportunity to restructure their programs and transfer significant cost to the federal ledger. (continues below chart)

Of course, even these savings are highly speculative. They assume that uncompensated care costs actually decrease under a Medicaid expansion. Analysis of other states shows that this is not always the case. In fact, in Maine, uncompensated care continued to grow.

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Tags: expansion, Medicaid, savings, speculative, States, subsidies, uncompensated care costs

3 Years of Obamacare: Millions Lose Their Current Coverage

Andrew Shurtleff/ZUMA Press/Newscom

Obamacare has been law for nearly three years, with its anniversary approaching on March 23. And while the major provisions (exchange subsidies and Medicaid expansion) aren’t slated to begin until 2014, Obamacare is already having devastating effects on Americans and their health care.

Recall that fateful Presidential promise, made on several occasions during the health care reform debate, “If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”

Despite the President’s promise, Heritage warned that many provisions in Obamacare would encourage employers to drop health coverage for their workers:

Many businesses and their employees—especially lower-income employees—will find that replacing ESI [employer-sponsored insurance] plans with subsidized coverage on the exchanges is mutually beneficial. Employers would no longer offer health insurance but would offer wage increases as wages and benefits are substitutes in an employee’s net compensation. At the same time, these workers will still have access to coverage through the exchanges with the subsidies or through Medicaid.

Heritage had it right. As employers and businesses prepare for the law’s major insurance regulations and mandates to begin next year, more stories of people losing their current coverage are emerging.

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Tags: anniversary, drop health coverage, insurance regulations, Medicaid, ObamaCare, presidential promise, subsidies, three years

5 Bipartisan Health Care Reform Options

Photo credit: Newscom

Addressing our nation’s overspending problem cannot be done without reforming entitlements, especially Medicare and Medicaid. As Washington remains clearly divided over how to get it done, Senator Orrin Hatch (R–UT) has outlined 5 health care reforms that are bipartisan.

These reforms have had the support of both parties in the past and are capable of effectively reining in spending:

1. Raise Medicare’s eligibility age. Hatch proposes raising the Medicare eligibility age gradually from 65 to 67, which would coincide with Social Security. This proposal enjoys a wide range of support from both sides of the aisle and would garner significant savings for the Medicare program. Heritage’s reform proposal would raise the eligibility age to 68, which would yield an estimated savings of $243.6 billion over 10 years.
2. Reform Medigap to incentivize better behavior. Limiting Medicare supplemental plans that cover initial out-of-pocket costs would decrease the excessive utilization currently occurring. This would incentivize better behavior from seniors and lower Medicare’s costs over time.

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Tags: bipartisan reforms, eligibility age, entitlements, incentivize, Medicaid, Medicare, Medigap

Five Health Care Takeaways from CBO’s Report

The Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2013–2023 today. Here are five major takeaways:

1)      Health care entitlement spending is bypassing all other spending. Spending on Medicare, Medicaid, Obamacare subsidies, and the Children’s Health Insurance Program will be greater than all other spending—including Social Security and defense spending: “Spending for major health care programs will be nearly 5 percent of GDP [gross domestic product] in 2013, and such spending is projected to grow rapidly when provisions of [Obamacare] are fully implemented by middecade, reaching 6.2 percent of GDP in 2023.”

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Tags: Congressional Budget Office, entitlement spending, Medicaid, Medicare, ObamaCare, report, subsidies

12 Days of Obamacare Surprises: An Optional Medicaid Expansion

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the past 11 days, Heritage has highlighted one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now. This Christmas morning will be the last day in this blog series and will highlight a positive Obamacare surprise.

In 2014, Obamacare expands Medicaid eligibility to able-bodied, childless adults earning up to 138 percent of the federal poverty level (FPL). If a state chose not to expand, the federal government would stop funding their existing Medicaid programs. The Congressional Budget Office (CBO) estimated that by 2016, Obamacare would drive an additional 17 million Americans into Medicaid.

Thankfully, the Supreme Court ruled that Obamacare’s Medicaid expansion was unconstitutionally coercive, ensuring state that chose not to expand would not lose existing federal assistance. Due to the Court’s ruling, the CBO now estimates that 6 million less Americans will be enrolled in the failing Medicaid program in 2022.

Surprise: While additional federal funding is available to those states that expand, the states will be burdened with the true cost. At least 20 states are planning to not expand or are unlikely to expand their Medicaid programs, according to Politico. The Supreme Court’s decision dealt a major blow to Obamacare and shifted a great deal of power to the states. This Christmas, in light of Obamacare’s many other mandates and requirements, this optional part of the law is certainly something to be thankful for.

12 Days of Obamacare Surprises:

11. Unlikely deficit reduction…

10. Unelected bureaucrats on IPAB…

9. Increased employer penalties…

8. More cuts to Medicare…

7. Loss of employer-sponsored insurance…

6. A 50/50 split on enrollment estimates…

5. More uninsured Americans…

4. Increased exchange subsidies…

3. Big tax increases…

2. The small business tax credit…

1. And the individual mandate.

Tags: federal funding, mandates, Medicaid, Obamacare surprise, requirements, States, true costs

12 Days of Obamacare Surprises: Uninsured Americans

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 8 days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.

One of Obamacare’s primary goals was to dramatically reduce the number of uninsured. To achieve this, Obamacare depends on a Medicaid expansion, new government subsidies funneled through exchanges, and an individual mandate to get people covered.

In 2010, the Congressional Budget Office (CBO) projected that Obamacare would insure 32 million non-elderly people by 2019, leaving 23 million non-elderly Americans uninsured.

In 2012, the CBO updated its projection to show that Obamacare would provide coverage for 36 million people through Medicaid and subsidized coverage in the government-run exchanges, leaving 30 million Americans uninsured in 2022.

Read the rest on The Foundry…

Tags: CBO, government-run exchange, Medicaid, ObamaCare, subsidized coverage, surprises, uninsured Americans

Hearing Exposes Obamacare’s Implementation Challenges for States

Joshua Sharfstein (left), secretary of the State of Maryland Department of Health and Mental Hygiene, testifies on state exchanges and Medicaid expansion. (Photo: Chris Maddaloni/CQ Roll Call/Newscom)

Yesterday, the House Energy and Commerce Committee held a hearing to discuss the implementation of Obamacare’s exchanges and Medicaid expansion, both of which are slated to begin in 2014.

Exchanges

Two officials from the Centers for Medicare and Medicaid Services expressed confidence that exchange implementation was on schedule, stating, “All Exchanges will open for enrollment in October 2013.”

Despite their assurance, Dennis Smith, the Secretary of Health Services in Wisconsin—a state that has declined to operate a state-based exchange—is not convinced: “[W]e are not confident that the federal government has adequately prepared for handling an unprecedented number of applications, verifications, and enrollments.”

Read the rest on The Foundry…

Tags: additional costs, exchanges, implementation, Medicaid, ObamaCare, States