Last week, the White House released a report outlining the economic benefits to states of expanding Medicaid. The report continues a line of argument the Obama administration has used in encouraging states to expand Medicaid under the Affordable Care Act, the president’s health-care law.
The administration faces several obstacles in attempting to sell this argument to reluctant states.
Leading Republicans are charging that the Obama administration is illegally funding yet another part of Obamacare, in addition to the part of the healthcare law over which House Republicans are already suing.
Their latest criticism centers on the Affordable Care Act’s basic health program, an optional program for states that started this year, in which low-income residents can get subsidized, state-contracted health plans instead of buying them through the new online marketplaces.
This week, Hawaii pulled the plug on its state-created Obamacare exchange. Gov. David Ige (D) declared that the Hawaii Health Connector has been “unable to generate sufficient revenues to sustain operations.” The decision to kill the exchange will cost taxpayers $200 million, a relative bargain compared to the political-inspired fiasco that happened with the Oregon version of the Obamacare exchange — Cover Oregon.
Even in Kentucky, which championed the 2010 health care law by expanding Medicaid and running its own insurance marketplace, about half of poor people say they have heard little about the Affordable Care Act, according to a Harvard University study published Monday in Health Affairs.
Awareness of Obamacare was even lower in Arkansas and Texas—two states that have not embraced the law as warmly. The study — which surveyed nearly 3,000 low-income residents in the three states last December– found 55 percent of those Texans and 57 percent of those Arkansans had heard little or nothing about the law’s extension of health coverage. Arkansas expanded Medicaid eligibility to cover more people under the law, but the state legislature prohibited spending public money to promote that or the federal subsidies available to help people buy private Obamacare plans. Texas did not expand Medicaid and restricted private groups wanting to help people enroll in new insurance options.
Such assistance was critical to whether people completed the application for coverage process, the study found. In fact, enrollment assistance led to a nearly 10 percentage point increase in the probability of people getting coverage, the study found.
The Florida House has soundly rejected a Medicaid expansion compromise that even supporters admitted had its flaws and was seemingly doomed to fail almost from the start.
The bill, which tore apart the regular session as the House and Senate bitterly disagreed, was voted down 72-41 Friday after a rousing, nearly seven-hour debate during which nearly 60 lawmakers spoke. It was an attempt by the Senate to draw down $18 billion federal dollars and give it to hundreds of thousands of Floridians to purchase private health insurance instead of putting them in the regular Medicaid program.
But Republicans insisted it would still expand President Barack Obama’s health care overhaul and increase the federal deficit. Even supporters acknowledged the bill would cover far fewer people than the 800,000 who are eligible. Gov. Rick Scott was also strongly opposed.
Hawaii’s health insurance exchange announced on Friday that it will be shutting down, and its nearly 40,000 enrollees will be transitioned to the federal Obamacare marketplace, Healthcare.gov.
The private, nonprofit Hawaii Health Connector, which has been embattled from its inception, has not generated “sufficient revenues to sustain operations,” according to the office of Hawaii Gov. David Ige (D).
The state invested $130 million in the Connector, but the exchange has been plagued by low enrollment numbers and technological issues, making it noncompliant with the federal requirements outlined in the Affordable Care Act.
“It was a failed project,” state Sen. Sam Slom (R) told the Honolulu Star-Advertiser. “It was a boondoggle from the very beginning, and our residents deserve better than that.”
According to Hawaii Health Connector CEO Jeff Kissel, Hawaii’s health exchange will become a state-run exchange that uses HealthCare.gov, which is similar to the setup in Nevada, New Mexico and Oregon.
It may be easier than expected for states to save their ObamaCare subsidies, if the Supreme Court rules against the law this month.
Two states — Pennsylvania and Delaware — said this week they would launch their own exchanges, if needed, to keep millions of healthcare dollars flowing after the decision. Both want to use existing pieces of the federal ObamaCare exchange, like its website and call center — a path that would be far less costly than the way most other states have created their exchanges.
If those plans win approval, many of the other 36 states that stand to lose their subsidies could then pursue a similarly simple strategy.
Facing a possible Supreme Court ruling on Obamacare that could cost residents millions of dollars in subsidies to buy health insurance, Delaware has put in motion a plan that could protect the state from the effects of such a decision.
Rita Landgraf, Delaware’s health and social services director, confirmed to TPM Wednesday that the state has filed a “blueprint” to the federal government to take more responsibility for its Obamacare exchange to blunt the potential effects of a pending Supreme Court ruling in King v. Burwell.
The states that set up their own insurance marketplaces have nothing to lose in King V. Burwell, the big Supreme Court case that will be decided by the end of June. But that doesn’t mean those states are breathing easy.
With varying degrees of difficulty, all of the state-based exchanges are struggling to figure out how to become financially self-sufficient as the spigot of federal start-up money shuts off.
By May 15, insurers had to file 2016 premiums with their state regulatory agencies and provide an explanation for rate increases exceeding 10 percent. On June 1, the Department of Health and Human Services released this information for 41 states plus the District of Columbia. Based on these filings, it appears that premiums for many Obamacare plans, particularly those with large market share, will rise substantially next year. In these states insurers requested double-digit increases for 676 individual and small group plans. These are on top of individual-market premium increases averaging 49 percent between 2013 and 2014.
According to the Centers for Medicare and Medicaid Services, these states include 7.9 million total exchange enrollees – nearly four out of every five people enrolled in exchange plans across the country. The double-digit rate increases HHS reported affect more than six million people in these states. These increases apply for Obamacare plans sold on exchanges as well as Obamacare plans sold off the exchanges. The weighted average premium increase for these six million people is 21 percent. Because the HHS list does not include insurers requesting double-digit rate hikes in large states such as California and New York, final numbers will be even higher.
Obamacare plans have disproportionately attracted older and sicker people. In their rate request filings, insurance companies generally said that claims have been far above what they expected. Moreover, Obamacare contained a large subsidy for insurers through the law’s reinsurance program – equaling $20 billion over three years. The reinsurance program is rapidly phasing out. The combination of these factors means premiums may continue to spiral upward as healthier people choose not to buy the mandate-laden, high-deductible, and expensive coverage.