Sunday, October 4 , 2015, 5:38 pm | Partly Cloudy 61º

Lou Cannon: States Have Key Role in Making Obamacare Work

By Lou Cannon, State Net Capitol Journal |

Winston Churchill famously described a crucial British military victory in North Africa during World War II as “not the end ... not even the beginning of the end” but “perhaps, the end of the beginning.”

For the Patient Protection and Affordable Care Act (ACA) that President Barack Obama is now more than willing to call Obamacare, the end of the beginning occurred in June when the U.S. Supreme Court ruled that most of the law is constitutional. This month’s election marked the beginning of the end. By re-electing Obama and keeping the Senate in Democratic hands, voters doomed quixotic Republican hopes of repealing the law. Now comes the tangled path from the beginning to the end, in which much will be demanded from insurance companies and medical providers and even more from the states.

The ACA, the most far-reaching U.S. health-care law since Medicare, has ambitious goals. It aims to streamline medical practices, reduce costs and provide health insurance for more than 30 million of an estimated 50 million Americans who lack it. This would be accomplished through an expansion of Medicaid, the federal-state partnership program that provides health coverage for the poor, and the creation of online state marketplaces, called exchanges, in which people could choose from a variety of supposedly affordable health-care plans offered by insurance companies.

The law is so complicated that many Americans are ill informed about its contents. Indeed, according to Election Day exit polls, nearly half of those who voted, including significant numbers of Obama supporters, want the law changed or repealed. As Virginia-based health industry analyst Jeff Goldsmith told The New York Times: “There is still a tremendous amount of disinformation out there. If you actually are going to implement this law, people need to know what’s in it — not just the puppies-and-ice cream parts but ... the broader social changes intended and how they will help you.”

The “puppies-and-ice cream parts” allow children to remain on their parents’ health-care policies until they are 26 and prohibit insurance companies from denying coverage because of previous medical conditions. These sections are broadly popular even among ACA’s opponents.

But the major objectives of the bill —- the Medicaid expansion and the creation of the exchanges for purchasing affordable health-care insurance — are sticking points.

As written, the ACA expanded Medicaid eligibility to everyone whose income is 138 percent or less of the poverty line. (This amounts to $15,000 for an individual and $25,500 for a family of three.) If every state complied, an estimated 15 million to 17 million people presently uninsured would receive Medicaid coverage. Federal subsidies would initially be provided to states for the Medicaid expansion, but states that failed to expand could lose all Medicaid funds.

That was before the Supreme Court ruled. By a 7-2 majority, the high court rejected this punitive provision of the ACA and said states could not be denied present Medicaid funds if they decline to expand. Several Republican governors dove through this escape hatch and said they would hold the line on Medicaid. Since Republicans hold 30 governorships and control both legislative chambers in 26 states, this opposition remains a mighty barrier to expansion.

But in the wake of the election, governors who have rejected Medicaid expansion are under pressure from medical providers and are having second thoughts. Florida Gov. Rick Scott, a Republican, has been an adamant foe of the ACA in general and of Medicaid expansion in particular. After the election he met with other GOP leaders and then said that “just saying no” to the ACA was no longer an option.

One Republican leader, Sen. Don Gaetz, R-Niceville, incoming president of the Florida State Senate, told the Miami Herald: “I don’t like this law, but this is the law and I have a constitutional obligation to carry it out.” The newspaper said more than $6 billion in federal funds are at stake for Miami-Dade and adjoining Broward countis over the next decade. Some 1.4 million persons in the two counties lack health-care insurance.

In South Dakota, where Republicans control the governorship and have a super-majority in the Legislature, the state medical association and the South Dakota Association of Health Care Organizations urged Gov. Dennis Daugaard to reconsider his opposition to Medicaid expansion. Daugaard made no promises but said he would take another look after evaluating the budget and the condition of the state economy.

If history is a guide, states opposed to Medicaid expansion will eventually fall into line. John Poelman of Leavitt Partners, a consulting firm advising states on the ACA, told Kaiser Health News that not all states will expand Medicaid in 2014 “but within a couple of years all of them will have.” It may take a bit longer than that. Several states did not sign on to Medicaid when it was created in 1965. Most states had accepted it by 1970, but Arizona, the last to do so, did not add the program until 1982.

Creating workable exchanges at which the uninsured can purchase affordable health insurance is the trickiest part of the ACA — and the one lagging most behind its deadlines. As envisioned, these exchanges will enable some 20 million people above the Medicaid cutoff but no more than 400 percent above the poverty line to purchase health-care policies. They will be encouraged to do by positive and negative incentives: a federal subsidy averaging about $5,000 annually to help defray premium costs and a fine or tax penalty if they fail to buy insurance. The exchanges are supposed to start enrolling applicants by Oct. 13, 2013, and become fully operative on Jan. 1, 2014.

States and the federal government procrastinated in 2012. Most states did not want to go through the complex and expensive process of setting up exchanges until the Supreme Court ruled. After the ruling the exchanges became hostage to the political campaign. With Republicans promising to repeal the ACA if they won Congress and the White House, most states took a wait-and-see attitude on creating exchanges. The Obama administration meanwhile was slow to spell out the essential medical services that states must provide.

As a result of this uncertainty, only 15 states plus the District of Columbia have submitted plans for operating exchanges. The deadline for doing this was Nov. 16, but the administration has now extended it to Dec. 14 for states that want to run their own exchanges and to Feb. 15 for states that prefer to operate exchanges in partnership with the federal government. Health and Human Services Secretary Kathleen Sebelius said in a letter to the states that the federal government would operate exchanges on its own for states that do not wish to run them. She promised that consumers in all states would have exchanges by Jan. 1, 2014.

Republicans remain skeptical. Sen. Orrin G. Hatch, R-Utah, the senior Republican on the Senate Finance Committee, called the exchanges “a mess” and said the Obama administration hadn’t given states sufficient information on which to base their decisions. As a result, Hatch said, states will bear the brunt of setting up the exchanges in a compressed time period.

There is also concern that there will be insufficient family physicians to service millions of new patients. A report this month by The Robert Graham Center for Policy Studies in Primary Care said delicately that new patients seeking family care face “potential access challenges.” According to Dr. Andrew Bazemore, co-author of the report, the problem is lack of family doctors rather than an overall physician shortage. He said 52,000 family doctors would be needed by 2025 to serve an increasingly older population.

A doctor who discussed the ACA with me under ground rules that he not be identified has another concern. He believes financial pressures will encourage consumers, medical providers and states to accept low-cost policies offered on the exchanges that provide only bare-bones care. If this happens, this doctor said, the ACA could wind up extending a two-tier U.S. health-care system that provides excellent care for people of means or those with comprehensive health insurance — but spartan coverage for everyone else.

On balance, the ACA is a work in progress, with numerous problems to overcome. But the Supreme Court and the voters have spoken, and the ACA is and will remain the law of the land. Bringing it to full fruition won’t be easy, but the end of the long, hard fight to provide health-care coverage for most Americans is at last in distant sight.

— Summerland resident Lou Cannon is a longtime national political writer and acclaimed presidential biographer. His most recent book — co-authored with his son, Carl — is Reagan’s Disciple: George W. Bush’s Troubled Quest for a Presidential Legacy. Cannon also is an editorial adviser to State Net Capitol Journal, which published this column originally.

comments powered by Disqus

» on 11.18.12 @ 11:44 PM

“There is also concern that there will be insufficient family physicians to service millions of new patients.”

This is an understatement to say the least. Expanding access to the health care system sounds good, but will mean little if you can’t see a physician because of a shortage of providers. This law is a mess, and many people who support it today, will be the loudest complainers when they are denied access to health care because of bottlenecks in the system. Remember this the next time you’re waiting in line at the post office.

» on 11.19.12 @ 12:17 AM

With Obama trying to eliminate ‘waste’ by lower payments to doctors no wonder,doctors will not take Medicare patients. 
Why did Obama not eliminate waste through torte reform? Ambulance chasers are democrates and donated heavily to his campaign.

We will have fewer and fewer bright students going to medical school.
They can not even pay off their student loans at the level of pay they will get with Obamacare.

Most socialist nations charge 2% of income for medical care for all.  With Obamacare it is 3.8% just for the uninsured!

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