What Will the Trump Administration Mean for Medicaid?

After a long and highly contentious presidential election lasting more than a year, we now know that Donald Trump will be our next president. In the days since the election, Trump has nominated individuals for key posts in his cabinet. With the selection of Rep. Tom Price (R-GA)—an outspoken ACA critic—to head DHHS, and Seema Verma—a consultant who helped design waiver-based Medicaid expansions in conservative states—to head CMS, Trump’s intention to significantly overhaul Obamacare seems apparent. Indeed, recent commentaries from Jonathan Oberlander and Gail Wilensky make clear that Trump’s victory is not good news for Obamacare supporters and those benefiting from the law.

Repealing and replacing Obamacare entirely is unlikely, because Republicans lack the 60 Senate seats needed for cloture. Thus, the most likely path forward is through budget reconciliation, which requires only a simple majority. Unfortunately, that means the Medicaid program is a vulnerable target, which raises the question: What will the Trump Administration mean for Medicaid? There is not a simple answer to that question. Trump himself has offered conflicting views. While he campaigned on the idea of repealing Obamacare and block granting Medicaid, he also went on Dr. Oz and expressed support for ensuring that low-income individuals continue to have Medicaid coverage.

As I see it, there are four possibilities for the future of Medicaid. First, Congress and the Trump administration may repeal the Medicaid expansion. While both President-elect Trump and Speaker of the House Paul Ryan (R-WI) have advocated for repeal, doing so may prove politically unpopular. Matt Bevin mounted a successful campaign to become Governor of Kentucky, promising to end the state’s Medicaid expansion. However, once he entered office, the stark reality of taking coverage away from some 425,000 Kentuckians led Gov. Bevin to amend his position and pursue changes to the program instead.

Thus, a second possibility is that the Medicaid expansion continues, but that beneficiaries face new, more stringent eligibility requirements. For example, Speaker Ryan’s “A Better Way” proposal outlines the possibility of introducing work or education requirements, and enforceable premiums into Medicaid. His plan also precludes states from expanding Medicaid after January 1, 2016, permanently establishing the disparity in coverage between expansion and non-expansion states. Moreover, beginning in 2019, Speaker Ryan’s plan would slowly phase down the enhanced federal matching rate for the expansion population to normal levels. This reduction in federal funding may prompt states to reverse their decision to cover the expansion population.

A third possibility is that Congress and the Trump administration will limit federal Medicaid spending through a combination of per capita allotments and block grants. Under the per capita allotment approach, states would receive a fixed amount of federal funding for each Medicaid enrollee, based on the state’s federal matching rate. This means total federal funding would increase or decrease as enrollment increases or decreases, but the per capita amount would remain constant. Alternatively, states could opt to receive a Medicaid block grant—a lump sum based on enrollment and utilization projections.

In his “A Better Way” proposal, Speaker Ryan envisions this giving states “more flexibility to adapt their Medicaid programs, to better design benefit packages in a way that better meets the needs of their state populations, [and] promotes personal responsibility and healthy behaviors…”  Yet, as Colleen Grogan writes, states already enjoy tremendous flexibility in the design of their Medicaid programs. While proponents of Medicaid block grants suggest that they will free states to make their Medicaid programs more efficient, Jeanne Lambrew found that previous block grant proposals failed to predict actual patterns of Medicaid costs. In some cases, that meant that the federal government would have overspent in its attempt to control costs, while in other cases, it meant that state Medicaid programs would have been severely underfunded. Moreover, evidence from both Rhode Island and Puerto Rico fails to support any link between federal funding caps and Medicaid program efficiency.

Finally, there is the possibility that nothing changes. While such a scenario is unlikely, there are two ways it could happen. First, Republican governors in Medicaid expansion states—including Jan Brewer in Arizona and Rick Snyder in Michigan—may oppose efforts to repeal the expansion or implement a block grant because they have seen the expansion work well in their states, and want to avoid the political fallout of rescinding coverage. Second, the courts might preserve the program. Sara Rosenbaum suggests that capping federal Medicaid spending may be viewed as unduly coercive in the wake of the Supreme Court’s ruling in NFIB v. Sebelius, because states agreed to participate in Medicaid with the expectation of an ongoing federal match, not a fixed sum of federal dollars. Thus, the Supreme Court might rule that forcing states to accept Medicaid block grants is unconstitutional, and—just like the Medicaid expansion—might make the block grant optional for states.

While the future of the Medicaid program under the Trump Administration is unclear, the potential implications of serious disruptions to Medicaid for tens of millions of vulnerable Americans are frightening. In a blog post from March 17, 2015, Edwin Park of the Center on Budget and Policy Priorities wrote, “House Budget Committee Chairman Tom Price’s budget plan proposes to radically restructure Medicaid by converting it to a block grant and cutting federal funding for it steeply, by $913 billion over the next decade.” The cuts would put Medicaid spending in 2025 almost 34% below where it would be expected under current law. That certainly saves money, but at what cost?

Note: This piece first appeared at Public Health Post.

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Mental Health Loses Funding As Government Continues Shutdown

In the months leading up to World Mental Health Day, DC has been shaken by a series of violent events that ended with innocent lives lost and our country’s mental health services called into question. During this same time period, Washington, DC has been consumed by a government shutdown, with lawmakers and policymakers trying to determine how to rein in our country’s financial burdens and overspending. Unfortunately, as federal and state governments look to cut budgets at every turn, mental and behavioral health services are often on the chopping block first. Financial cuts, compounded with US stigma often applied to mental health troubles and disparate access to services across the county, mean that those who need services most are often those left without proper care.

August though October brought DC into the spotlight for many reasons, the saddest of which is the violence that was covered by mass media as two shootings occurred. In one case, Aaron Alexis, a 34-year-old, perpetrated a mass shooting that left 12 people dead, in Washington’s Navy Yard. Previous to the shooting, it was reported that Mr. Alexis was treated at the VA for mental health issues including sleep disorders and paranoia, but had not lost clearance.

Miriam Carey, also 34, reportedly had an unhealthy obsession with the White House when she drove her car into the White House gates and led police on a chase around DC before being killed. Although she had no reported psychosis or supposed violent intent, it was noted in the months leading up to the incident she believed that the President had beenstalking her and might have suffered from postpartum depression. When killed by authorities on Pennsylvania Avenue, she had her 18-month-old child in the car.

Budget Cuts

Although societal stigma and knowledge of where to access behavioral and mental services are often barriers to care, budget cuts continue to make seeking care more difficult. Whether this be through decreases in available services, lack of providers due to poor reimbursements or less preventative actions in communities, the impact of mental health funding shortages is great. According to the National Alliance on Mental Illness, “increasingly, emergency rooms, homeless shelters and jails are struggling with the effects of people falling through the cracks due to lack of needed mental health services and supports.”

In the last five years, significant budget cuts have befallen mental health programs and services. From 2009 to 2011, states cut mental health budgets by a combined $4 billion- the largest single combined reduction to mental health spending since de-institutionalization in the 1970s. In Chicago alone, state budget cuts combined with reductions in county and city mental health services led to shutting six of the city’s 12 mental health clinics. These closures, along with other public and private center closures in Chicago, have eliminated vitally needed services, especially on the south and west sides where they are indispensable.

Threats of sequestration in 2013 had a significant impact on people’s ability to access mental health services and programs, including children’s mental health services, suicide prevention programs, homeless outreach programs, substance abuse treatment programs, housing and employment assistance, health research, and virtually every type of public mental health support. The Substance Abuse and Mental Health Services Administration(SAMHSA) claimed it alone would be cutting $168 million from its 2013 spending, including areduction of $83.1 million in grants for substance abuse treatment programs.

Consequences

Despite the need to balance budget and make all health care services more efficient, many argue that society has better long-term outcomes if more federal and state dollars are allocated to mental and behavioral health care. This includes preventative services as well as mental health testing and treatment.

Because individuals with untreated mental illness often find themselves in emergency rooms, homeless shelters and prisons, the societal cost of prevention and treatment may be exponentially less than funding those other outlets and catchment areas. This is especially true in the case of children, who face cycling in and out of the system throughout their lives if left untreated.

These costs can be exceptionally large over the lifetime given that the National Institute of Mental Health (NIMH) estimates that two-thirds of children with lifetime mental health problems never receive treatment. This takes substantial emotional and financial tolls on individuals and families, as well as the broader society. However, programs that address the mental health needs and provide services for youth show better outcomes in health and education that carry over the lifetime. For example, in the University of Chicago’s Crime Lab, therapy is being used to curb youth violence, especially amongst those with behavioral and mental health care needs.

Additionally staining on the mental health care system is that during times of recession and budget cuts the caseload for mental health actually increases. It has been estimated that during this most recent recession, the caseload of community mental health services alone has increased almost 50 percent. This increase has most notably been seen in the Native American community, where suicide prevention is an essential part of the cultural health care demands.

Everyone Benefits

The NIMH contends that one in 17 people suffer from a “seriously debilitating mental illness,” we as a society are accountable for ensuring that those in need have resources for care. Not only does access to quality mental and behavioral health care ensure that individuals are being properly treated, but that America as a whole saves money and resources caring for those in need in other, more expensive settings. It may further prevent violent acts like those in DC from happing.

On this World Mental Health day think about the ways in which access to and support of mental and behavioral health care can be improved in your community.

 

President Obama Fails To Explain Tech Glitches And Solutions In ACA Speech

Monday at 11:30am EST, President Obama spoke in the Rose Garden about the recent troubles with health insurance exchange enrollment and websites. With a team of young people standing behind him and Janice Baker at his side, the first person in the state of Delaware to successfully enroll in the exchange, President Obama said he was speaking to every American wanting to get affordable health insurance. He claimed that in the last three weeks, despite the horrific technological problems with the websites, that “half a million consumers across the country have submitted application through federal and state marketplaces.” He further touted that the “federal site alone has been visited 20,000,000 times” in the last three weeks. Unfortunately for those American’s who are really interested in signing up on the exchange sites, he glossed over the depth and breadth of the current troubles, giving a speech that sounded more like a State of the Union address with small-business examples and reading letters written to the White House.

President Obama also alleged that no one wants to see the exchange sites improve more than the federal government, noting that, “the website has been to slow, and people have been getting stuck during the process.” He also said that it is the mission of the administration to make them “more better,” with visible cringing from the audience, but claimed failures were due to response rates. He said the public response was “overwhelming, which has aggravated the underlying problems.”

However, he failed to go any further to explain what those other underlying problems were or when specifically they will be fixed. He did say that while HHS and contractors such as CGI Federal are working out the “kinks,” American’s should be patient. He claimed that “if the product is good, [American people] are willing to be patient,” suggesting that there will not be a delay for the individual mandate.

Nevertheless, he followed this by assuring the public that unlike Black Friday sales, the insurance plans will not run out like purchasing a new PlayStation – adding to the list of items the administration has compared exchange sites to, including iPhones and travel websites.

Despite his promises of improvements and putting the “best and brightest” on the job, CNN and other sites have insisted that the inherent technological and platform problems with Healthcare.gov will not be resolved anytime soon. This begs the question, that if the federal government is now searching for the best and brightest to correct the estimated 5,000-5,000,000+ lines of coding that need to be fixed on the federal site alone, who was working on the original platforms?

As he continued his speech, the President reminded the American public that although the websites for enrollment are not as, “quick, consistent or efficient as we want,” that the exchange sites are far more than “just a website.” He noted that many pieces of the Affordable Care Act (ACA) are already in place and being utilized by millions of Americans. He addressed pre-existing conditions, youth under the age of 26 and several other provisions that are already being rolled out by federal law, and the successes they have seen there.

He noted more examples of ACA triumph in Oregon, where he maintained that the exchange, “has cut the number of uninsured people by 10% in three week,” which is about “56,000 more Americans” with health insurance coverage.

During the speech, President Obama also tried to clarify the exchanges or marketplaces by describing them to the public as becoming part of a “big group plan… that bargains on your behalf for the best deal in health care.” He said that by doing so, insurance companies have created new products and options that strengthen market forces, leading to better deals.

He went on to say that without a doubt, “prices have come down,” further claiming that “when you add the next tax credits (those not yet implemented)… then the prices come down even further.”

The President rounded out his talk by noting the Republican party’s opposition to the ACA and how willing they were to “shut down the global economy” to fight against the ACA. A move, he claimed, that shows just how unwilling Republicans are to negotiate on legislation intended to, “free families from the pervasive fear that one illness one injury will cost you everything.”

While that may be the goal of the Affordable Care Act, the underlying technological and coding problems may prove to make that impossible.

 

Closing Racial And Ethnic Disparity Gaps: Implications Of The Affordable Care Act

For all intents and purposes, the Affordable Care Act (ACA), the President’s signature piece of legislation, will provide more health care coverage to poor and underserved populations. Persistently disadvantaged communities have much further to go than those with insurance, and new means of accessing and paying for care will benefit them disproportionately. Nevertheless, with more than 20 percent of the nation’s Black population uninsured, more than 30 percent of Hispanics uninsured and a country still grappling with understanding and properly addressing disparities, just how far does the ACA take us?

By mandating individual health insurance coverage and expanding the list of covered preventative services, ACA legislation should, theoretically, improve the quality of health care for those populations at disproportionate risk of being uninsured and having low incomes. In advance of the January 2014 start of major health reform initiatives, some estimate that more than half of the uninsured will gain insurance coverage.

However, research has shown that having health insurance itself does not have a substantial impact if people cannot find a doctor to see them, do not have proper information about accessing resources, or are not treated in a culturally and environmentally competent manner. Moreover, when the number of uninsured could be decreased by more than half, but being uninsured is not equitable across racial and ethnic groups in the US, what happens to our countries most vulnerable?

It has been well documented that low-income individuals and those without employee-sponsored insurance (ESI) are more likely to be people of color. Kaiser and US Census estimates indicate that there are significant differences in insurance rates by race and ethnicity, with national averages approximating there are almost three times as many uninsured Hispanics as Whites. In Louisiana, for example, it is believed that more than 50% of the state’s Hispanics are uninsured, while only 18% of Whites are. In the same state, it is estimated that 30% of Blacks are uninsured, reiterating just how unbalanced our country remains and how terribly far we have to go to eliminate inequalities.

The oft-cited example of health reform success is Massachusetts, where Blue Cross Blue Shield 2013 estimates indicate that about 97 percent of the state’s population has health insurance thanks to health reform. While this is a grand feat for gaining an insurance card, insurance alone does not constitute affordable, quality care, or improved long-term health and equity. The real successes come from improved statistics on accessing care, preventative care and disease reduction.

For those looking to Massachusetts, data does support a slight improvement in overall access to care by showing that Whites, Blacks and Hispanics all had increases in the number of insured, and further that the percentage of the state’s population that had “any doctor visit in prior year” between 2006 and 2009 rose by more than five percent.

Unfortunately, as many have argued, those for and against health reform, Massachusetts is not necessarily a good representation of other US states or populations, as anyone who has been to Massachusetts knows that the state population looks and behaves very differently from places such as southern California or the Southside of Chicago. Furthermore, even in Massachusetts the number of Blacks and Hispanics that remain uninsured is two and three times that of Whites, respectively.

Many of those who will be left uninsured will be Blacks, immigrants and Hispanics, who will continue to use Emergency Departments for critical care or, worse, go untreated.

Additionally, there are those who are lower middle class (a growing group in this nation) who fall into the economic gap where they cannot afford the employer/exchange insurance offered to them, but earn too much to receive subsidies for offsetting the mandatory cost of insurance, which are often people of color.

Other groups of concern are those minorities who do not have the knowledge of where to access care, do not have the financial or transportation means to access care or still distrust the system due to systemic problems with culturally competent care.

Although the ACA takes us a step forward in giving many of the countries uninsured an insurance card, the US must address what to do about probable provider shortages that will result from a lack of primary care physicians and different utilization in care. We must be prepared to understand both to cultural differences in demand and pent-up demand of the previously uninsured, as well as start to really face how to deal with persistent racial and ethnic inequality in this nation that shows itself in our health care system every day.

In the coming weeks, months and years the US citizens have to do more than champion or attempt to repeal the ACA. Party lines and moderate attempts at change will never fix our broken health care system. We have to start addressing the real issues our country faces, those of injustice, unequal access and treatment and how we properly care for and address the needs of those who are not White and wealthy.

 

How the Supreme Court’s Decision Saves Money, Leaves People Uninsured

At the end of July, the Congressional Budget Office (CBO) released a report that revised estimates of insurance coverage under the Affordable Care Act to reflect the Supreme Court’s decision, particularly letting states opt-out of the Medicaid expansion without penalty. Reading the document (pdf here) really provides a wonderful example of the multiple moving parts affected by a single policy change, but since most of you probably won’t do that, here’s a very brief summary.

The Supreme Court’s ruling has removed the teeth from the ACA’s Medicaid expansion efforts, allowing states to opt-out without penalty. At last count, seven states have decided not to participate. Result number one? Uninsured individuals with incomes below 138 percent of the federal poverty level (133% plus the 5% income disregard) will not gain coverage in these states as once expected. That effect will be more significant in larger states with a significant proportion of uninsured residents (e.g., Texas and Florida) than in smaller states with a lower uninsurance rate (e.g., Iowa and Nebraska). Overall, CBO estimates that 6 million people who would have qualified for Medicaid won’t get the chance. If more states refuse to participate, that number could rise substantially. That saves the federal government about $6,000 per person at the expense of each person’s health.

Things don’t stop there, though. While two-thirds of the uninsured (4 million) will have incomes too low to be eligible for federal subsidies, the other one-third (2 million) will qualify for federal assistance to help them purchase private insurance coverage. The CBO conservatively estimates that they all will, while acknowledging that many won’t. If that sounds confusing, it’s really not. They’re just saying, we don’t expect the number to be higher than 2 million, we’re not sure how much lower it will actually be than that, but to be cautious we’re assuming everyone eligible for a subsidy gets insurance through the exchanges.

Putting it all together, the federal government is expected to save $289 billion because 6 million fewer individuals will be covered by Medicaid, while spending an additional $210 billion to provide subsidies to the 2-3 million of those individuals who are expected to buy private coverage through the exchanges. Toss in another $5 billion in savings for various odds and ends, and the CBO expects the net result of the Supreme Court’s decision to be something in the neighborhood of $84 billion less expensive over the next decade, with an additional 3 million Americans remaining uninsured. And that’s how the Supreme Court’s decision saves money, but leaves more people uninsured.

 

Deconstructing Conservative Excuses For Not Expanding Medicaid

One of the bigger points to emerge from the Supreme Court’s decision over the Affordable Care Act is the striking down of the provision that the federal government could cut existing Medicaid funding to the states if they opted not to participate in the ACA’s Medicaid expansion. While this aspect of the decision didn’t get much media attention, at least initially, it has generated an enormous amount of dialogue among policy circles–especially now that several states, among them Texas and Louisiana, have vowed not to participate in the expansion.

The immediate consequence of states opting out is that fewer uninsured Americans will gain coverage from the ACA, and those that continue to be uninsured will be some of America’s poorest citizens. Considering how much financial help the federal government is going to give states to participate in the expansion, the decision not to participate seems like nothing more than political retaliation at the expense of the most vulnerable members of the public. But could there be more to it than that?

Conservatives say yes. In fact, I was intrigued to read a post entitled “Why not expand Medicaid?” from Keith Hennessey, who spent time as the Director of the National Economic Council under George W. Bush. You can read his original post here. For the most part, the points are valid, but they aren’t exactly the complete story. Allow me to rectify that.

1. “Leaving federal money on the table” looks at the problem backwards.
The federal government is going to pick up the entire tab for the expansion for the first three years. After that it phases down so that, by 2020, the feds pay 90% and the states pay 10%. Liberals have been acting like this is free money to the states. Conservatives are saying “Not so fast. We have to spend money to get money.” Miraculously, both sides are right. The states will have to spend some money after the three years are up, but they’re still getting a great deal. In fact, one could easily argue that if they had any intention of ever extending coverage to the low-income uninsured in their state, this will be the cheapest option they’ll ever have. That they are passing on the opportunity strongly suggests that they really don’t care if the poor go without coverage.

2. A smart Governor recognizes that a commitment to expand Medicaid eligibility is likely to be permanent, so she may be risk averse.
Here, the thinking is that once you expand Medicaid, you’ll never be able to go back, and signing up for an expanded entitlement program seems a bit risky. I actually tend to buy this argument, insofar as it explains the psychological resistance to change that has shaped the majority of incremental American policy-making, including our seeming inability to reform health care in the past. Perhaps the Governors of these red states are taking a wait and see approach before joining the expansion. This wouldn’t be the first time. The basic Medicaid program is optional for states. While it was created in 1965, the last state to participate, Arizona, did not get with the program until 1982. In other words, there is a precedent for this sort of thinking from the states. Of course, I also find this encouraging in that it means that all states are likely to fully participate in the Medicaid expansion sometime around 2031.

3. A Governor must also worry about creeping federal requirements for this new population.
This is just #2 with slightly different wording. In other words, if we join in the expansion now, what protects us from you changing the rules of the game later? This is a fair point, but if the federal requirments grow that oppressive, the states can always stop participating in the expansion. Moreover, they can do so without fear of federal repurcussions, thanks to the Supreme Court ruling.

4. There are hidden costs to this expansion.
The hidden cost argument is that choosing to participate in the expansion will also cause other individuals who are currently eligible for Medicaid but not enrolled, to enroll in the program. This troubles states because the generous federal coverage applies only to the newly eligible population under the expansion, not to currently eligible but not enrolled individuals. I find this one a bit laughable, despite the fact that it’s absolutely true. If people are eligible for benefits, but not enrolled, it saves the state money. Clearly, this argument belies the states’ preference that eligible individuals remain unenrolled rather than add to the budget. The poor uninsured lose again.

5. Adding new people increases government spending and total spending on health care.
In the explanation for this argument, an equation is provided: More People X More Medical Care = More Spending. If you don’t engage your brain very hard, that makes sense, but here’s why it’s wrong: The real equation is Volume X Price = Spending. Yes, more people and more medical care means more volume, but for which types of services? If providing people with coverage means that they get more preventive care and stay well, the price of the care they use will be lower than if they went without care for years and then showed up at the emergency department rife with comorbidities. In short, we don’t really have enough data to know if this expansion will increase or decrease health care spending. As an aside, there’s also this point: If people are acknowledging that Medicaid coverage will lead to increased utilization of medical care, that means that they are acknowledging by default that the low-income uninsured aren’t getting all the care they need now. So, if conservatives want to raise this argument, I don’t want to hear them say that everyone has access to care because they can just go to the emergency room.

6. A Governor creates negotiating leverage with the Feds by saying no, even temporarily.
Yeah, this is absolutely true. In fact, I think this is the most honest of all the arguments in favor of not participating in the Medicaid expansion.

7. If it’s such a good deal, why did the Feds mandate it?
Um, because they realized the strong attraction of the immediately preceding point #6? Democrats probably decided to do this sometime around the moment they realized that the GOP was going to vote against everything they proposed without reading it.

So, there you have it. There are 7 reasons why conservatives might choose not to participate in the Medicaid expansion. I think my rebuttal to these arguments indicates that some of them are better than others, and that the bottom line is that red states are more concerned with playing political games in the name of fiscal conservatism than they are with making sure that their most vulnerable citizens have health insurance.

 

 

 

Medicaid and Red State Governors: A Love/Hate Relationship

In addition to the much discussed individual mandate, a central element of the Affordable Care Act designed to increase insurance coverage is the expansion of the Medicaid program to cover anyone with an income up to 138% of the federal poverty level. To put that into context for those who might not know, Medicaid eligibility currently has two requirements: income eligibility and categorical eligibility. Income eligibility means that your income has to fall below a certain level, which varies by state within certain federal guidelines. Categorical eligibility, which also varies somewhat by state, means that you have to be a certain “type” of person. For example, pregnant women and children are typically eligible for Medicaid, whereas very few childless adults are eligible. The Affordable Care Act changes that, making anyone who is low-income (again, 138% of poverty, or $30,843 a year for a family of four) eligible regardless of what other “category” they might belong to.

The odd thing about the ACA, though, is that it will actually be more generous to conservative states that have not previously established more generous Medicaid limits. Here’s why: Starting in 2014, the federal government will pay 100% of the difference between what states are currently covering and the new 133% of poverty threshold. This amount is gradually reduced over time, reaching 90% by 2020, where it is slated to remain indefinitely. While Medicaid is currently jointly financed by the federal and state governments, this new arrangement has the feds picking up the bulk of the costs of the new coverage. The thing is, some states, like Massachusetts, are already providing coverage of parents up to 133% of poverty. These states that are already quite generous will not receive much in the way of new federal money. By contrast, other states, like Texas, only provide coverage for parents up to 26% of poverty (that’s less than $3,000 a year). When they opt-in to the Medicaid expansion, the federal government will pay the full difference in cost of expanding eligibility up to 138% of poverty. That’s a lot of federal money to states like Texas. Generally, the more conservative states are the ones with the most uninsured persons and the strictest Medicaid eligibility requirements. Therefore, they are also the ones who will gain the most under the ACA.

Of course, this depends on their willingness to participate in the Medicaid expansion, which is optional. The ACA did include a provision that said that if states didn’t participate in the Medicaid expansion, the federal government could also withdraw their funding for the existing Medicaid program. The Supreme Court, however, said that this was coercive and unconstitutional. The result is that states are free to participate in the program or not, without fear of repercussions. Politically, republican governors are adamant about resisting implementation of the Affordable Care Act. Louisiana’s Bobby Jindal has already proclaimed that his state, whose health statistics place it squarely in the bottom of the country (50th in 2008, rising to 49th by 2011), will not be creating an insurance exchange and will not be participating in the Medicaid expansion. It’s unfortunate, because the people in these states are the ones who desperately need help the most.

Of course, the politically-motivated decision not to play ball will only hurt these states further, as they walk away from literally billions of dollars in federal assistance that would boost their economies and improve the health of their residents. There will also be pressure from organized health care interests to participate, because that money will reduce their uncompensated care costs. So, I’m not sure if the rhetoric we’re hearing today will hold true in the end. If it does, though, it will be a great example of bad politics dominating good policy, and the people it will hurt the most are the ones who are already wounded.

Update: As Nicole points out in the comments, the actual threshold is even higher than I originally stated. Medicaid eligibility goes up to 138% of poverty, not 133% as I had written. I have updated the text to indicate this.

 

How Many Uninsured Will Medicaid Cover After Health Reform?

One of the major components of the Affordable Care Act is the extension of Medicaid eligibility to all citizens and legal residents who earn below 133% of the federal poverty level. As of 2011, that is approximately not a lot of money. Prior to the ACA, Medicaid eligibility was contingent on satisfying both income eligibility and categorical eligibility criteria, the former meaning you had to be poor and the latter meaning you had to be the “right” type of person to qualify. For example, poor pregnant women qualified, poor childless adults did not. Prior to the ACA, people who thought Medicaid was a program for poor people were only partially right. Fortunately for these people, without having to change their thinking, the implementation of the ACA will make them right. Medicaid will now be for everyone who is low-income. It’s much simpler and makes more sense, but the big question is: How will it work?

We already know that there are a number of people eligible for Medicaid coverage currently who are not enrolled in the program. It stands to reason, then, that when more people become eligible, some fraction of them will not enroll. How many do enroll will be important for many reasons: covering these folks was a major goal of health reform, newly insured individuals will need more doctors to care for them, and all of this will have an effect on health care costs. It would be helpful if we could anticipate–if not predict–the future, which is exactly what the Congressional Budget Office and the Centers for Medicare and Medicaid Services have tried to do. The problem is that they appear to be using two different crystal balls.

The CBO says that 16 million will gain coverage, while CMS says 18 million. Somebody’s wrong. My hunch is that it’s CMS, because they assume that 97% of newly eligible people will enroll in Medicaid. That seems awfully high to me. It also seems high to some health economists at Harvard who have the next best thing to a crystal ball: a simulation model. Benjamin Sommers, Katherine Swartz, and Arnold Epstein have a paper coming out in Health Affairs that considers all of the major factors that will determine how many people will be eligible and how many will enroll and calculates these estimates under a variety of assumptions that range from conservative to bold. According to their model, about 13.4 million people will newly enroll in Medicaid because of the ACA. However, using different assumptions, they come up with a 95% confidence interval that ranges from 8.5 million to 22.4 million people. That, folks, is a pretty large amount of uncertainty. The good news is that more people will be covered. The bad news is that we really won’t know how many until happens, which means we won’t be able to do too much planning ahead.

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Federalizing Medicaid

Medicare–insurance for seniors and the disabled–is an entirely federal program. Medicaid–the program for low-income persons–is jointly financed and operated by the federal and state governments. Health reform expands Medicaid and aims to make Medicare more efficient. It also arguably paves the way for Medicaid to become a purely federal program, which is something that most states would be pleased with, given the difficulties they have in balancing their annual budgets because of Medicaid costs. There are many other benefits to federalizing Medicaid, which are outlined in a policy paper authored by The Century Foundation’s Vice-President Greg Anrig. I’ve chosen to write about this topic today primarily because I want you to have the entire weekend to read the paper. Some of you might see shifting Medicaid away from the states to the feds as taking the country further down the road towards a single payer system. Others of you might see it as one of the most viable options for confronting some of the major problems in our health care system and our state economies. In my opinion, both of you would be right.

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