Monday, July 02, 2012

Will States Drag Feet On Imposing Health Exchanges, and Other Thoughts

If the states don't have health care exchanges in place by 2014, when the individual mandate kicks in, they'll be cut out of the loop and the federal government will impose its own version of the exchanges, with the funding structures intact (the state will have to kick in its set percentage, regardless of whether it acts to impose its own exchange or not).

Some states are going to drag their heels, hoping that Congress reverses its decision to impose the individual mandate and that Romney wins the White House so that the White House doesn't repeal the measure.

Others are moving ahead, since the feds are providing funds to help get the exchanges going. Nearly $1 billion has been distributed thus far, so states that don't get with the program will find themselves shut out on the funds needed to get the exchanges rolling.

Perhaps some states think that this might get the feds to kick in a greater contribution towards the startup costs. They may have a point, but unless Congress pushes the IM deadline back, those states that aren't moving towards an exchange will find themselves in a mess.

Consumers in those states will be at a disadvantage if the states don't get their exchanges going since they'll be without the insurance coverage available to other states. In some places, like LA, TX, and FL, they have the highest rate of uninsureds, which means that a significant portion of the electorate would be voting against their own interest if the IM gets repealed (those states would benefit most from exchanges). But the GOP is trying to capitalize on fear-mongering that the IM is somehow stripping away freedoms, even as they were touting IM as a sign of personal responsibility just a few years ago before President Obama made it part of the health care reform package.

As it is, some states are likely to drag their feet on the Medicare expansion.
Why would states reject the expansion of Medicaid? For some, it might be that the expanded program means a larger chunk of funding that the state must provide to cover its share of Medicaid costs (Medicaid is only partially funded by the federal government; between 2014 and 2022, the federal government ends up paying for $931 billion and the states $73 billion toward the costs of the expanded Medicaid). For some others, we have to question a possible motivation that simply won’t countenance additional federal “welfare” to poor people—and believe you me, an income of 133 percent of the federal poverty level, roughly $30,700 for a family of four, is poverty no matter how you define it.  

So the court said the federal government couldn’t bully the states into participating in the expanded coverage by threatening all of their Medicaid funding. Republicans around the country are crowing that their states will opt out against, in the words of the governor of Alabama, Robert Bentley, “an overreach by the federal government that creates more regulation, bureaucracy, and a dramatic increase in costs to taxpayers.”

ProPublica hints at what we think will actually happen. Like the stimulus, when Republican governors huffed and puffed that they would turn down the federal moneys, in the end, nearly all of the stimulus refuseniks accepted the federal dollars, and those that didn’t were generally overruled by their legislatures, even one governor named Sarah Palin. Don’t bet on states telling poor families that middle class people can get coverage under the PPACA, but because of a governor’s ideological pique, they won’t.


Fact checking Obama and Romney on health care claims.

For those keeping score, the following claims were deemed false:
* Obama has stated some form of "if you're happy with your health insurance, you'll be able to keep it." Nothing in the law states that you will be able to keep your plan; employers can change plans as they see fit (that's no change to the existing system in place)
* Romney's claims that the ACA will add to the deficit are false; it's based on the CBO's worst case scenario, while the CBO middle range figures expect it to cut the deficit over time - assuming that the law doesn't change over time.

True:
* to a degree, Obama's claims that Americans will see rebates for costs already paid. It will be a modest amount for some of those affected by overpayments over time.
* Romney's claims that the ACA will mean $500 billion in tax hikes, though most of that amount falls on high income earners, including $200 billion from additional Medicare payroll tax.
* partially true that the provisions relating to dependents 26 and younger have meant millions have gotten insurance. The figure is probably closer to 3 million, though one study puts it above 6 million (the figure Obama cites).

I'd put this in the indeterminate range:
* Romney's claims that the ACA will kill jobs. It does mean people are more likely to leave the workforce, but not for reasons Romney states. People will no longer continue working because they'll have access to health insurance outside jobs. That potentially opens the door to new employees and more job movement - not necessarily a bad thing. It doesn't reflect that jobs will be destroyed because of the ACA.

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