Now that the first wave of dust from the Supreme Court ruling has settled, we know we will be looking at two big questions in our states: Will the state create an exchange of its own and will it expand Medicaid?
Those are actually multi-part questions. We’ve written quite a bit about exchanges, and we’ll return to that topic as well as to the newer question of Medicaid. But I’d like to remind you that we had a terrific webcast the day after the ruling, and it’s archived and very much worth listening to as you get past that initial ruling coverage and look ahead.
There are some related resources and background materials supplied by the speakers on that page, and I’ve linked to some newer documents in this post.
When we invited the three guests, we were looking in part for expertise in state policy and Medicaid – which was our good luck as the ruling put Medicaid front and center.
The three experts on the webcast were:
- Alan Weil, executive director, National Academy for State Health Policy
- Kevin Outterson, associate professor of law and associate professor of health law, bioethics and human rights, Boston University (some of you may know his blogging from The Incidental Economist)
- Bruce Siegel, M.D., M.P.H., president and chief executive officer, National Association of Public Hospitals and Health Systems
Here are a few key points that are worth keeping in mind a few weeks out from the SCOTUS decision.
Weil pointed out that governors and state governments “really have a love-hate relationship with Medicaid.” It’s expensive, they feel it’s “fiscally out of control” and it takes money away from other priorities. But “it is also a prime source of economic development and a support for neediest people in their states.” That’s why you are hearing some supporters of Medicaid expansion now talking about the federal payments to states as “stimulative.” It’s a lot of money.
Siegel thinks it is quite possible that some of the 26 states that brought the health law challenge to the Supreme Court will sit out the expansion – at least in the short term. How many, how long? Too soon to know. But it puts about 9 million people at risk (some estimates go as high as 11 or 12) eligible in those states for expanded Medicaid who may not get it.
States that don’t expand will have the odd situation of people just a bit above the poverty line being able to get subsidized health coverage in the exchanges, but poorer people will not get help. “It’s a huge hole,” Outterson said. (This has been dubbed a coverage “doughnut hole” but it has nothing to do with the Medicare drug coverage gap, also known as a “doughnut hole.”)
The uncertainty in the coming months about state choices on Medicaid will be very difficult for hospitals, especially the “safety net hospitals who are trying to ramp up” and get ready for 2014, Siegel said. They are particularly vulnerable because under the “grand bargain” of the health law, hospitals gave up some of the money that they receive to subsidize the uninsured, but were supposed to get more insured patients. Now they may have the funds cut – but not have the expanded insured population. (These funds are known as DSH – for disproportional share hospitals. Both Medicaid and Medicare are sources of DSH.) All states are affected by DSH changes, although the final details haven’t been set. Siegel in particularly was extremely concerned about the strains on the safety net.
All the speakers said the Medicaid decision is part politics – part policy. And it may play out differently in states with a big tea party presence – and in states where the governor has national ambitions. Also Weil noted that if the governor says he or she wants to turn down Medicaid expansion – the state legislature may have different ideas when it returns to session, which may not be until early 2013. Yes the states will have to put some money up – but they will also have way more federal money coming in for Medicaid expansion.
They also agreed that there are a lot of unanswered questions about the Medicaid expansions. (See the Republican Governors Association’s lengthy letter on Medicaid and the exchanges that was issued a few days later. It’s worth reading because it sheds a lot of light on what governors are thinking and some of the maneuvering over the governors’ terms for expansion that you will see in months to come The main clarification to date from HHS is that there is no deadline for a state to do the Medicaid expansion). Expect lots of fighting and probably (drumroll) litigation.
All three speakers noted that most of the news coverage has focused on who gets covered, and who pays. But a huge portion of the law affects how health care is organized and delivered, and it’s not getting its share of attention. “This is completely changing conversations inside the health care sector,” Weil said. The thesis of the law is that we have to stop pouring more money and people into a broken system – and instead fix the system.
“Talk to physicians, hospitals, local people – the people who actually deliver care,” Weil said. “Nurses. Clinics. That gives you a personal angle…. Humanize the delivery side, not just the coverage side.”
Outterson stressed that the health law also changes fundamentally the rules of the game for how insurers do business. “The ACA certainly places more requirements on insurers,” Siegel said. “Things that many of us have wanted to see for years that are consumer-friendly.” Outterson added that health care underwriting – figuring out who to cover and who is too costly and risky and not a good business prospect – will be replaced by “a new business model.”
Joanne Kenen (@JoanneKenen) is AHCJ’s health reform topic leader. If you have questions or suggestions for future resources, please send them to joanne@healthjournalism.org.That does mean that many people’s insurance will change – which might run counter to the administration’s claim that “you can keep what you have” depending on how literally you take that claim. But most of the changes will be improvements – better coverage and more consumer protections, the speakers said. The general structure of insurance won’t change that much and millions of people get coverage now that does meet the new requirements, particularly if they have employer-sponsored coverage.
Weil was probably the most skeptical about the exchanges and had some questions about how many would enroll. Because of cost restraints, he didn’t think the health plans in the exchanges would be all that generous. Siegel said many in the hospital industry, rightly or wrongly, worried that the exchange plans would reimburse poorly, “Medicaid in drag.” Weil also said he wasn’t so confident that the idea of plans competing within the exchange would do all that much to contain costs. The guests had higher hopes for cost-restraint through delivery system reform.
Weil had one request for reporters. As you cover the state decision-making, “Call [out] the political leadership. What are they doing? What are the consequences of their decisions?” Don’t let them just say “I’m waiting for the next election… The decisions they are making now really matter.”
