Add Tennessee and Kansas to the list of states that have been warned by the Obama administration that failing to expand Medicaid under the Affordable Care Act could jeopardize special funding to pay hospitals and doctors for treating the poor.

Health Reform: Back in 2013, ObamaCare supporters couldn’t talk enough about how California was a showcase for how the law would succeed. Isn’t it funny that nobody is making such claims any more?

New York Times columnist Paul Krugman wrote a few months into ObamaCare’s first open enrollment period that “What we have in California, then, is a proof of concept. Yes, ObamaCare is workable — in fact, done right, it works just fine.”

It turns out that California is a proof of concept, but not in the way Krugman thought.

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On December 17, 2014, Vermont Governor Peter Shumlin publicly ended his administration’s 4-year initiative to develop, enact, and implement a single-payer health care system in his state. The effort would have established a government-financed system, called Green Mountain Care, to provide universal coverage, replacing most private health insurance in Vermont. For Americans who prefer more ambitious health care reform than that offered by the Affordable Care Act (ACA), Shumlin’s announcement was a major disappointment. Was his decision based on economic or political considerations? Will it damage the viability of a single-payer approach in other states or at the federal level?

Shumlin’s exploration of a single-payer health care system, which included three assessments by different expert groups, was among the most exhaustive ever conducted in the United States. A 2011 study led by Harvard health economist William Hsiao provided optimistic projections: immediate systemwide savings of 8 to 12% and an additional 12 to 14% over time, or more than $2 billion over 10 years, and requirements for new payroll taxes of 9.4% for employers and new income taxes of 3.1% for individuals to replace health insurance premiums (see table
Financial Estimates from Three Projections for a Vermont Single-Payer Health Plan.
).1 Two years later, a study by the University of Massachusetts Medical School and Wakely Consulting projected savings of just 1.5% over 3 years.2 Finally, a 2014 study by Shumlin’s staff and consultants predicted 1.6% savings over 5 years and foresaw required new taxes of 11.5% for employers and up to 9.5% for individuals. The governor cited these last projections in withdrawing his plan: “I have learned that the limitations of state-based financing, the limitations of federal law, the limitations of our tax capacity, and the sensitivity of our economy make that unwise and untenable at this time . . . . The risk of economic shock is too high,” Shumlin concluded.

Aiden Hill’s introduction to the secretive culture at Covered California came in his first days on the job. He had just been hired to head up the agency’s $120 million call center effort when he emailed a superior April 18, 2013, and got a text message in reply:

Please refrain from writing a lot of draft contract language in government email … And don’t clarify via email … No email.

Later, concerned about contractor performance, Hill conducted an Internet search for “best practices” information to forward a superior. Afterward he got this text:

Aiden—Please stop using government email for your searches.

The fight over ObamaCare’s Medicaid expansion escalated Monday, as Texas’s Republican governor backed a lawsuit from Florida fighting the expansion effort.

Last week, Florida’s Republican Gov. Rick Scott announced he would sue the Obama administration over what he calls an effort to force the state to expand Medicaid under ObamaCare.

Texas’s Republican Gov. Greg Abbott on Monday announced his support for the lawsuit.

“When the federal government exceeds its constitutional authority, the States must take action,” Abbott said in a statement. “[I] commend Governor Rick Scott’s decision to take legal action to protect these important constitutional principles.”

At issue is the Obama administration move to link Florida’s rejection of a Medicaid expansion to separate federal funding that helps hospitals in the state care for the uninsured.

Today the Competitive Enterprise Institute (CEI) released a report by finance expert Scot Vorse that shows many states knew as early as 2011 that they might not receive tax credits if they opted out of establishing a state-based health insurance exchange. Whether nonparticipating states had adequate knowledge that they were putting their Obamacare subsidies at risk is a critical question in CEI’s Supreme Court case, King v. Burwell.

Vorse obtained emails related to a January 2012 letter sent by seven states to the U.S. Department of Health and Human Services (HHS). While Obamacare supporters have dismissed this letter as a “spoof,” these state emails show the letter was a carefully crafted and coordinated effort by the states to get detailed information about the exchanges from HHS.

California’s health insurance exchange, established under the Affordable Care Act, has been held out as a national model for Obamacare. In some ways—not all of them good—it is. Whether it’s falling far short of 2015 enrollment goals or sending out 100,000 inaccurate tax forms, Covered California is struggling with its share of challenges.

Now, several senior-level officials integral to the launch of Covered California—who enthusiastically support the Affordable Care Act—are speaking about what they view as gross incompetence and mismanagement involving some of the $1 billion federal tax dollars poured into the state effort.

‘Somebody Must Have Been Smoking Something’

Consultant Aiden Hill became a “foxhole convert” to Obamacare in July of 2010 when he lost his insurance, had a serious medical issue and couldn’t get a new policy.

WASHINGTON — Republican or Democrat, the next president will have the chance to remake the nation’s health care overhaul without fighting Congress.

The law signed by President Barack Obama includes a waiver that, starting in 2017, would let states take federal dollars now invested in the overhaul and use them to redesign their own health care systems.

States could not repeal some things, such as the requirement that insurance companies cover people with health problems. But they could replace the law’s unpopular mandate that virtually everyone in the country has health insurance, provided the alternative worked reasonably well.

It has been five years since the Affordable Care Act, better known as ObamaCare, was signed into law. The disastrous rollout of the federal marketplace website, Healthcare.gov, is well-known. According to a Bloomberg Government analysis released in September 2014, the cost of Healthcare.gov was more than $2 billion, more than twice the Obama administration’s estimates. Appropriately, the federal marketplace has been a subject of numerous congressional hearings.

But state-run websites have also squandered hundreds of millions of federal tax dollars. While the House Committee on Oversight and Government Reform has been investigating some of the problems with state-run websites, much more can and should be done. Every House and Senate committee that oversees healthcare issues should carefully examine the roles played by the Centers for Medicare and Medicaid Services (CMS), state officials and contractors in the design and implementation of the websites.

Florida Gov. Rick Scott (R) announced Thursday he is suing the Obama administration as part of an escalating dispute over whether the state will expand Medicaid under ObamaCare.

“It is appalling that President Obama would cut off federal healthcare dollars to Florida in an effort to force our state further into ObamaCare,” Scott said in a statement Thursday announcing the lawsuit.

Scott is objecting to the Obama administration linking the extension of separate federal money to help hospitals in the state care for the uninsured, known as the Low Income Pool (LIP), to the state’s decision on whether to expand Medicaid under the Affordable Care Act.

The Obama administration says the LIP funding will not be renewed in its current form after June. It says that the future of the program is “linked” to the decision to expand Medicaid, though it stops short of saying it is entirely dependent on it. Scott, on the other hand, wants the LIP funding but does not want to expand Medicaid.