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

Administration Rules Out “Deals” on Medicaid Expansion

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Last Friday afternoon, the Centers for Medicare and Medicaid Services (CMS) issued a short frequently asked questions (FAQ) document that should remove any remaining belief that the federal government will give state lawmakers flexibility on the Obamacare Medicaid expansion. The message is clear: The only thing a state that agrees to the Medicaid expansion will get is a bigger Medicaid program.

The CMS reiterated the position it took in an earlier FAQ that the Obama Administration considers the expansion to be an “all or nothing” proposition for states.

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Tags: burdensome, CMS, flexibility, HHS Secretary, Kathleen Sebelius, Medicaid Expansion, ObamaCare, States

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.

Read the rest on The Foundry…

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

Obamacare “Rebranded”

Text from http://www.cuidadodesalud.gov/glossary.html

The Department of Health and Human Services (HHS), charged with implementing Obamacare, is running into a classic marketing problem: The dogs won’t eat the dog food.

So HHS officials recently announced that they are “rebranding” one of Obamacare’s major components; henceforth they will replace the word exchange with marketplace.

HHS has been implementing Obamacare for over 36 months now. The law is just as unpopular as the day it passed. Employers are trying to figure out if they will need to drop their employee health plans or cut their workers’ hours. Insurers still don’t have the answers they need to design and price the new required coverage. At least half the states are unwilling to set up their own exchanges.

What does HHS conclude? That its product needs a different name. Apparently the Administration thinks the dogs will like the dog food better with a different label on the can.

Read the rest on The Foundry…

Tags: bad policy, exchanges, marketplaces, ObamaCare, rebranded, Spanish, States

Obamacare Medicaid Expansion: States Should Be Realistic, Not Optimistic

Months since the Supreme Court ruling that made the Obamacare Medicaid expansion optional, the state costs associated with expansion still remain highly uncertain—making expansion a dicey course for states and their budgets.

Indeed, states should not lose sight of the fact that the original Medicaid expansion was coercive for a reason. As Nina Owcharenko, director of Heritage’s Center for Health Policy Studies, points out, “The fact that the authors of Obamacare felt the need to threaten states with total defunding tells you that they knew many states would resist expanding their programs—even with 100 percent federal funding.”

States are still weighing their options. Many of them have commissioned studies to project the state costs of expanding. However, all cost estimates reflect the assumptions used to construct them, and using different assumptions can result in estimates varying wildly between (and sometimes within) states.

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Tags: defunding, different assumptions, Medicaid Expansion, ObamaCare, States, Supreme Court, voluntary

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

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

Deadline for States to Claim Their Role in Obamacare

Tomorrow is an important day for Obamacare. It’s the deadline for states to declare their intentions about setting up their own health insurance exchanges for residents to purchase insurance under the new regime.

If a state does not set up an exchange, the federal government will come in and set it up, according to the law. So far, 22 states have said they are not going to set up state exchanges. Only six states have received conditional approval from the Department of Health and Human Services (HHS) to operate their own exchanges.

Why leave it up to the federal government? Well, to begin with, it’s an extremely costly undertaking. Heritage health care experts Nina Owcharenko and Ed Haislmaier explain:

[T]here will be no steady flow of federal dollars to the states. The law specifies that starting in 2015, any state implementing a state exchange must develop its own revenue source to fund the exchange’s annual operations. That puts the long-term costs squarely on the states. Moreover, the recent announcement by the Department of Health and Human Services (HHS) that it will levy a 3.5 percent administrative fee on coverage sold through the federally run exchanges indicates there are significant costs if a state agrees to run its own exchange.

And what would be in it for them? Certainly not increased control over how the exchanges are run. Owcharenko and Haislmaier explain that “regulations promulgated by HHS allow states no meaningful flexibility or advantage by operating their own exchanges, relative to a federal exchange. Those states would simply be acting as vendors to HHS.”

Read the rest on The Foundry…

Tags: federal intervention, health insurance exchanges, Medicaid Expansion, ObamaCare, States

Obamacare Insurance Exchanges: States Have Options

Governor John Kasich (R) is expected to opt not to set up a state Obamacare exchange. This is the right decision for Ohio. The President’s health care law is unworkable and unsustainable. Rejecting the health insurance exchanges, and equally as important, the Medicaid expansion, are two opportunities states have to push back on this law and instead push forward on a better health reform agenda for Ohio.

These exchanges are used in the law to funnel subsidies to government-controlled health plans. Some proponents of the law will undoubtedly criticize the Governor’s decision. But, there are more practical and sound reasons why opting not to adopt a state exchange is best for the states.

First, under the exchange regulations promulgated by the Secretary of Health and Human Services (HHS), states would gain no meaningful flexibility or advantage by operating their own exchanges, relative to a federally facilitated exchange. They would simply be acting as vendors to HHS.

Second, states still regulate insurers (including those participating in exchanges) in all matters not otherwise preempted by federal law, regardless of who operates the exchange. States can also regulate exchange “navigators” through state professional licensure statutes, to ensure equal standards/level playing field with other insurance producers, again, regardless of who operates the exchange.

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Tags: federal mandate, health insurance exchange, HHS, ObamaCare, options, repeal the law, States

States Should Wait Before Accepting Obamacare

The Supreme Court upheld Obamacare’s individual mandate to purchase health insurance, but it also struck down part of the law. That part—forcing states to expand their Medicaid programs—offers governors some much-needed relief.

Expanding Medicaid, the government health insurance program for the poor and disabled, was one of President Obama’s main ways to increase the number of insured people through Obamacare. This was no magic solution for the uninsured, especially since Medicaid is in need of reform, not expansion.

States’ share of the cost of Medicaid is already crushing state budgets. “In the past decade, Medicaid spending has increased at nearly twice the rate of states’ tax revenue,” according to a new report.

The only ways to expand Medicaid are to raise taxes, cut other state programs, or slash health care providers’ reimbursements in Medicaid even more. And so far, the majority of America’s governors have not committed to making the expansion.*

Governor Bob McDonnell (R–VA) sent a letter to President Obama on behalf of the Republican Governors Association: “Before making any final policy decisions,” he explained, “governors must carefully consider the short and long-term implications of an expanded entitlement program and the consequences of significantly increasing the size of government to manage these programs.” The question of a Medicaid expansion faces every state, including Democratic governors who are still on the fence.

Read the rest on The Foundry…

Tags: budget buster, expansion, governors, Medicaid, States, Supreme Court ruling, wait