“When the Supreme Court hears the state challenge to ObamaCare later this year, most of the attention will likely be on the challenge to the law’s individual mandate to purchase health insurance and its implications for the Constitution’s Commerce Clause. But in a somewhat unexpected move, the Supreme Court has decided to allow for a full hour of oral argument regarding another part of the case: the expansion of Medicaid, the joint federal-state health program for the poor and disabled, which is expected to account for half of the law’s health coverage expansion.”
“Under the health care overhaul, the federal government will start taxing itself and the states beginning in 2014. And that’s giving state Medicaid directors heartburn. A report released Tuesday by the actuarial firm Milliman Inc. said the tax will cost the Medicaid program between $36.5 billion and $41.9 billion over 10 years. At least $13 billion will be borne by states, and at least $23.5 billion by the federal government, based on the state-federal Medicaid matching formula.”
“That is, states must now accept a comprehensive reorganization of Medicaid or forfeit all federal Medicaid funding—even though the spending power is circumscribed to preserve a distinction between what is local and what is national. If Congress is allowed to attach conditions to spending that the states cannot refuse in order to achieve an objective it could not outright mandate, the local/national distinction that is so central to federalism will be erased.”
“Twenty-six states on Tuesday asked the Supreme Court to overturn the health care reform law’s mandatory state expansion of the Medicaid program, a sleeper issue in the health care reform lawsuit that could determine how much leverage the federal government has with the states on any issue.
The states, led by Florida, argue that the federal government can’t force them to expand the Medicaid program, which has operated as a partnership between the feds and the states, as part of the 2010 health reform law. They argue that the Medicaid expansion is possibly more coercive than the law’s individual mandate.”
Create new demonstration projects in Medicaid to pay bundled payments for episodes of care that include hospitalizations (effective January 1, 2012 through December 31, 2016); to make global capitated payments to safety net hospital systems (effective fiscal years 2010 through 2012); to allow pediatric medical providers organized as accountable care organizations to share in cost-savings (effective January 1, 2012 through December 31, 2016); and to provide Medicaid payments to institutions of mental disease for adult enrollees who require stabilization of an emergency condition (effective October 1, 2011 through December 31, 2015).
“Lawyers on both sides of the lawsuits over President Obama’s healthcare law were caught off guard Monday when the Supreme Court said it would debate whether the law’s Medicaid expansion is constitutional. The high court was widely expected to take up the law’s individual mandate, and to take the case filed by 26 states and the National Federation of Independent Business. But the court’s decision to also hear the states’ Medicaid challenge came as a surprise to the healthcare law’s critics as well as its supporters.”
“As demand outstrips supply we can expect large increases in waiting time for services and a price war for providers between Medicaid and commercial insurers. Regardless of the administration’s arguments, little in the Affordable Care Act (ACA) addresses this dynamic. Increases in primary care physician fees, funding for Federally Qualified Health Centers, and national health services corps slots don’t build any new physician capacity; they only drive more competition for limited physicians and fuel a price war. It is likely the administration is relying on the Independent Payment Advisory Board and their new premium rate review power over private insurance to try to control prices, but waiting lines and an increased reliance on the emergency room will be a new fact of life.”
“But researchers at Harvard University are now warning that policymakers should be prepared for substantial uncertainty about the true enrollment effects of the Medicaid expansion. In a paper published in the journal Health Affairs earlier this week, a team of health economists estimated that, under the law, new Medicaid enrollment could be as low as 8.5 million people, but also as high as 22.4 million people—with additional costs to match.”
“Even with ObamaCare set to inflate the Medicaid rolls, reimbursement rates are falling further. When the NBER investigated Oregon’s program, the state paid doctors 90% of Medicare rates — more than most other states. But since then, Oregon, as well as nearly half its peers, has cut payments. More doctors will doubtless leave the program as a result. This supply problem is one reason the NBER study specifically cautioned against extrapolating its results to model ObamaCare’s expansion of Medicaid. Under ObamaCare, one in four Americans will be covered by Medicaid at a total cost of nearly a trillion dollars. They may receive subpar care — or may not even be able to get an appointment with a doctor. But as the NBER report shows, at least they’ll have a ‘general sense of improved well-being.'”
“Another unintended consequence of President Barack Obama’s health care law has emerged: Older adults of the same age and income with similar medical histories could pay widely different amounts for private health insurance due to a quirk of the complex legislation. Those differences could be substantial. A 62-year-old could end up paying $1,200 a year more than his neighbor, in one example. And experts say the disparities among married couples would be much larger.”