How the Supreme Court’s Medicaid Ruling Endangers Universal Coverage

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Kris Connor / Getty Images

Protesters argues about the Affordable Healthcare Act outside the U.S. Supreme Court on June 28, 2012 in Washington, DC.

Of all the ways President Obama’s health care law is poised to alter the U.S. medical system, the extension of new health insurance coverage to some 32 million people has been billed as its most important. A lack of coverage forces this population to flock to emergency rooms, driving up medical costs for everyone. Studies indicate that thousands die every year purely because they don’t have insurance. (A 2009 Harvard paper put the number of unnecessary deaths annually at 45,000.) Pulling these uninsured people into the health insurance pool, Democrats said, would save lives and money, and bring justice and organization to a system that’s rife with inequality and waste.

(MORE: Why the Supreme Court Left Us Hanging on Healthcare)

But thanks to the Supreme Court’s decision on the Affordable Care Act (ACA) last week, which upheld the law’s basic architecture and the controversial individual mandate, fixing the problem of the uninsured could be a lot more difficult that Democrats were hoping. In a move that surprised court watchers and progressive advocates, the Supreme Court, by a 7-2 vote, ruled that states don’t have to participate in a huge expansion of Medicaid, the state-federal insurance program for the poor, called for in the ACA. (The ACA was written so that states that decided not to expand their Medicaid programs would lose their existing Medicaid funding, but the court said funding already in place should not be affected by states’ decisions on the ACA changes.) This expansion, which would allow everyone earning less than 133% of the federal poverty level to become eligible for the program, had been projected to extend health insurance to some 16 million Americans, about half of the total number expected to get new coverage under the ACA. (The federal poverty level this year is $11,170.) The High Court ruling last week left this expansion vulnerable, and along with it the law’s promise to bring the national insured rate to over 90%.

The existing Medicaid program covers about 48 millions Americans, or 16% of the population, according to the Kaiser Family Foundation. Who is eligible varies geographically, with some states extending eligibility far beyond federal minimums; how much of a state’s cost is covered by the federal government also varies from 50% to 73%. Still, on balance, the ACA expansion of the program is a good deal for every state. Under the ACA, the federal government would initially pay 100% of the cost of newly eligible Medicaid enrollees, with this percentage gradually decreasing to 90% by 2020. If every state adopted the new eligibility standards, the federal government would bear 93% of the total cost or $931 billion from 2014 to 2022, according to an analysis by the Center on Budget and Policy Priorities, a think tank that studies public programs’ impact on low and middle-income Americans. Under this all opt-in scenario, the total state cost of the Medicaid expansion would be $73 billion from 2014 to 2022. That’s not free, but some analysts say the cost would be more than offset by savings from reductions in hospital uncompensated care and the stimulative effect of injecting hundreds of billions of dollars in federal money into local health care economies.

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Whether states want to participate in the Medicaid expansion isn’t just a matter of dollars. Republicans governors across the country, who have been vocal critics of the Affordable Care Act since it passed, are now signaling they may not opt into the Medicaid expansion. (Similarly, many of them turned down federal stimulus dollars.) Gov. Rick Scott of Florida has said he won’t support a Medicaid expansion, although the state legislature might feel otherwise. New Jersey Gov. Chris Christie said after last week’s ruling that he was glad the Medicaid expansion was ruled optional, but didn’t say whether his state would participate. Other Republican governors, like Nikki Haley of South Caroline and Bobby Jindal of Louisiana, have said they will not make moves to implement the ACA in their states, although it’s not yet clear if this means they intend to reject billions in Medicaid funding.

The irony is that, in many cases, it’s Republican-led states that stand to gain the most from the ACA Medicaid expansion. Texas, for instance, has the highest uninsured rate in the country at 25%. The ACA Medicaid expansion there could provide coverage to 1.5 million poor residents and inject $120 billion into the state economy over 10 years. But Gov. Rick Perry has indicated he intends to resist implementation of the ACA. Obama Administration officials say they believe all states will eventually opt into the Medicaid expansion, regardless of political ideology. Progressive advocates and health policy experts say they believe the Medicaid expansion will happen everywhere eventually, just more slowly as a result of the Supreme Court decision last week.

In the meantime, the fate of as many as 9 million uninsured Americans remains unknown. The failure of some states to adopt the ACA Medicaid expansion could leave some of the poorest and most vulnerable Americans without health insurance, even as insured rates go up for other groups. Policymakers wrote the ACA with the assumption that the Medicaid expansion would be adopted everywhere, so there are no other provisions in the law to help non-Medicaid eligible people earning less than 133% of the federal poverty level get insurance. Federal subsidies to help people afford insurance purchased independently will be created by the law, but are only available to those earning between 133% and 400% of the federal poverty level. Individuals and families earning less than that and living in states that don’t already allow them to participate in Medicaid could be left out of health reform’s insurance expansion altogether.

MORE: Supreme Court Upholds Health Reform Law in Landmark Decision

116 comments
chris fine
chris fine

Can't afford major medical coverage or have pre-existing conditions that will disqualify you? Call Now 1-866-943-1106

Michael M. T. Henderson
Michael M. T. Henderson

It is beyond my comprehension why anyone would oppose the ACT. Why should any patriotic Americans want their fellow citizens not to have health care? If we don't implement the law, we condemn our fellow Americans to seek care, often too late, at hospital emergency rooms--at great expense to those hospitals. I myself had to go to the ER last week, taking with me my Medicare and Medigap cards, plus a photo ID. These allowed the hospital to bill my insurance rather than eating the cost itself, or trying to get me to pay cash on the barrel.

Another waste of time and money is doctors' having to research which insurance companies will pay for needed procedures. My doctor wants me to have an annual treatment for osteoporosis, but she must first check with Medicare to see which of several available treatments can be done. This is a waste of her time. Her practice must also hire and pay staff to handle the paperwork for a host of insurance companies' claim procedures, all of which adds to her and our costs. All of this could be avoided if we simply had single-payer, not-for-profit health care, like the other countries such as France, whose citizens have significantly longer life spans than ours. Why must we have for-profit health insurance companies, whose bottom line depends on covering as few sick people as possible? As once-and-future Congressman Alan Grayson eloquently puts it, the American system is this: (1) don't get sick; (2) if you do get sick, die quickly. What an embarrassment for the richest country in the world, that we refuse to take care of ourselves and each other.

Harriette Nye Seiler
Harriette Nye Seiler

The entire ACA endangers any hope of  universal coverage.  We need Improved Medicare for All as detailed in HR 676.

I went door-to-door for Obama in 2008, but the ACA is hopelessly inadequate, and will prove to be simply a  bailout to the private insurers, the MCOs getting their fangs into Medicaid  and their investors.

In my state the MCOs recently contracted to manage Medicaid are delaying approvals, denying claims, and refusing to approve medication that keeps the mentally ill stable. Medicaid also underpays hospitals.

RaviPG
RaviPG

Paulejb:

Lack of funds is a lame excuse. You know it too. Additional money involved under ACA is only a fraction of the total defense budget of the US. Don't you think it makes more sense to take care of one's own countrymen before spending hundreds of billions of dollars on waging wars against foreign regimes that allegedly flout their citizens' human rights? 

paulejb
paulejb

RaviPG,

ObamaCare is just a huge honking hole in the federal budget. We have absolutely no idea just how much this boondoggle will bury this nation in debt.

RaviPG
RaviPG

Paulejb:

Most developed countries spend 6 to 8% of their GDP and provide coverage to all of their citizens. On the other hand, US spends more than twice as much (18%) and leaves millions of Americans uncovered. Healthcare is not a bottomless pit as you seem to claim. One needs to look seriously at the way healthcare is delivered. Now don't tell me these ratios are not true. There are a lot of reliable sources on the internet to determine the veracity of these statistics.

Stuart Zechman
Stuart Zechman

Kate Pickert:

You write

"Policymakers wrote the ACA with the assumption that the Medicaid expansion would be adopted everywhere, so there are no other provisions in the law to help non-Medicaid eligible people earning less than 133% of the federal poverty level get insurance. 

Federal subsidies to help people afford insurance purchased independently will be created by the law, but are only available to those earning between 133% and 400% of the federal poverty level."

 What do you mean?

Do you mean to say that the mandated "Bronze level" coverage in the state-based "Exchanges" is still somehow un-affordable for a family of four making a cent less than 30,657 dollars a year (133% poverty), even with the "subsidies to help people afford insurance"?

Or do you mean that, perversely, the law makes those federal subsidies only available to people who earn one cent over  30,657 dollars a year?

You do realize how odd it is that Medicaid expansion is necessary at all, given how "affordable" the subsidies are supposed to make the "Bronze level" policies sold in these state-based "Exchanges," don't you, Kate Pickert?

Given all of the federally-subsidized shopping for best-price coverage that PPACA enthusiasts claim will drive premiums down in these "Exchanges," can you clearly explain exactly why is it that unimplemented Medicaid expansion would leave any family of four making 30,657 dollars a yea priced out of these "markets" and uninsured?  Or are poor people basically forbidden by the law from participating in the Exchanges at all?

Thanks in advance for your clarification, Kate Pickert.

TheGizmo51
TheGizmo51

Pretty simple logic, those that have, keep what they have.  The problem is that those that don't have, keep what they have.   And yes, the majority win until they get or got sick.

paulejb
paulejb

"It is not known why Roberts changed his view on the mandate and decided to uphold the law. At least one conservative justice tried to get him to explain it, but was unsatisfied with the response, according to a source with knowledge of the conversation."

http://www.cbsnews.com/8301-34... 

I assume it was the fact he took a gut check and came up empty.

paulejb
paulejb

bobell,

"And Roberts never said it was, even though it falls within the taxing authority."

-----------------------------------------

Spin it all you like, bobell. But the lie has been exposed. ObamaCare is a great, big, honking TAX.

The Government lawyers and now Justice Roberts say it's so.

bobell
bobell

Is it your lack of intelligence or your insane ideology that makes you so wrong?

paulejb
paulejb

As an aside from the subject of the day, we have this.

"CNN’s Anderson Cooper comes out: ‘The fact is, I’m gay’ "

http://twitchy.com/2012/07/02/... 

Now we know where Coop got his expertise on Teabagging.

"Anderson Cooper: "It's Hard to Talk When You're Teabagging" (VIDEO)"

http://www.huffingtonpost.com/...

MomentoMori
MomentoMori

Gay jokes. Nice. Very classy.

paulie's devolving before our very eyes....

Ivy_B
Ivy_B

As former Swampland commenter, sgwhite in Florida tweeted -

@sgw94

People are making jokes about Anderson Cooper coming out not realizing that the fact it ISNT a big deal today IS a big deal. Thats the point.

paulejb
paulejb

Ivy_B,

Geez, people. It's not as if this was a revelation to anyone who ever accidentally tuned into CNN while Cooper was on the air.

paulejb
paulejb

MomentoMori,

Anderson Cooper is certainly a joke but not necessarily a "gay" joke.

outsider2011
outsider2011

Honestly, you expected better?

MomentoMori
MomentoMori

"Anderson Coopers problem is not that he's "gay.""

True statement.

paulie's the only person who seems to have a problem with someone being gay.

paulejb
paulejb

outsider2011,

Anderson Coopers problem is not that he's "gay." His problem is that he is just another left wing media cipher with no audience.

pleisch
pleisch

I was born in Arizona, one of the states that opted out of Medicaid on the condition that they would provide something equivalent. What about those states? People aren't getting care. It isn't equivalent. All that option does is let the states avoid answering to a standard of care. It's easy to say that people can leave if they don't like it, but it's not that simple when folks have jobs and families, especially in the present economy. The countries that have universal health care pay more in taxes than we do, yup. They get more and spend less in the long run. In many, the national economy improved too. A good book with great in-depth research in The New Feminist Agenda by Madeleine Kunin. There are no free solutions and no solutions that don't require change, which is never entirely pleasant and without hiccups.

RaviPG
RaviPG

Many governors say they will not accept the Federal money offered to them to provide healthcare to the poor living in their respective states!!  Can you imagine anything more asinine? How do these guys get elected? More importantly, what does it say about the people who elect them? 

paulejb
paulejb

RaviPG,

The poor are already covered by Medicaid, Ravi. ObamaCare expands the definition of poor to include up to 133% of the poverty level.

Not every state was offered the bribes that purchased the votes for ObamaCare. The other states do not want to be stuck with Uncle Sam's tab.

RaviPG
RaviPG

Under ACA the expansion of Medicaid means coverage for additional 1.5 million human beings earning less than $14,855 per year, $285 a week. How do you expect these people to pay $250 a week in health insurance premiums for family coverage from their meager earnings? I don't think you give a damn.

What I cannot fathom is how people can be so callous towards their fellow countrymen in one of the richest nations on earth? 

RaviPG
RaviPG

Paulejb:

Lack of funds is a lame excuse. You know it too. Additional money involved under ACA is only a fraction of the total defense budget of the US. Don't you think it makes more sense to take care of one's own countrymen before spending hundreds of billions of dollars on waging wars against foreign regimes that allegedly flout their citizens' human rights? 

paulejb
paulejb

RaviPG,

And exactly who will be picking up the tab for all this largesse? Uncle Sam? He's broke. The States? They're broke. 

Perhaps you believe that the Chinese will pick up the tab?