Reform faces many obstacles
Lots of people who didn’t have access to health insurance before the Affordable Care Act — Obamacare — was enacted in 2010 do, now. Trouble is, many of them are finding that the “affordable” in the bill title was a lie.
About the only large group of people delighted with the law are the 14.5 million to 18 million people who don’t pay a dime for their insurance, because it’s taxpayer-subsidized Medicaid insurance. The rest of us do.
Skyrocketing premiums for Obamacare exchange insurance, unrealistic co-payments under policies people can afford, limited or no competition among insurance carriers in many areas and the enormous cost of helping that many people through Medicaid are just a few of the reasons why the ACA isn’t a train wreck about to happen. It’s already in progress.
Obamacare isn’t working. Major changes have to be made.
That’s why the House of Representatives, by a narrow margin, approved a replacement bill last week. Republican lawmakers who voted for it fear that the political climate is such that if they didn’t get the ball rolling now, it might never happen. Doing nothing would be an enormous disservice to millions of people.
My understanding is that even many of those who voted for the bill aren’t entirely happy with it. Their hope is that the action begins the process of seriously hashing out something better.
The ball is in the Senate’s court, now. But there are challenges to be overcome.
One of the big ones is Medicaid. Obamacare encourages states to offer the insurance, intended for low-income and disabled people, to millions more Americans. About 31 states, including West Virginia and Ohio, have gone along with the offer.
It’s one of those bait-and-switch deals that seems wonderful at first. Medicaid is funded jointly by states and the federal government. States’ shares are based, in essence, on their percentages of low-income residents. West Virginia currently gets 73.24 percent of its Medicaid costs for the pre-expansion enrollees, about 331,000 of them, from Washington. In Ohio, the reimbursement rate is 62.78 percent.
But the Obamacare deal was that for the first three years after expansion, Uncle Sam would pay 100 percent of the cost for the added Medicaid clients. So West Virginia signed up about 180,500 more people for the program. Ohio added nearly 683,000.
This year, the expansion-Medicaid reimbursement rate is down to 95 percent. In 2020, it drops to 90 percent.
Medicaid is enormously expensive. And even at 90 percent reimbursement, it’s a big new burden for already strapped state budgets.
Under the bill approved last week, that would change. In 2020, the reimbursement rate for Medicaid expansion would drop to the same rate as for pre-expansion enrollees.
That would be difficult enough here in West Virginia. Based on the $6,315-a-year average cost for each person on Medicaid in the state, the difference between the Obamacare reimbursement and that in the new bill would be about $190 million. To keep the 180,500 enrollees added by the Obamacare expansion on Medicaid, West Virginia taxpayers would have to pony up that much more every year.
Added flexibility the new bill would give states to hold down Medicaid costs could lessen that amount substantially. Still, the choice for state politicians would be to raise taxes to keep the expansion-enrollees on Medicaid — or boot some or all of them off. Who wants to alienate that many potential voters?
And in West Virginia, we’re the lucky ones. We have the second-highest Medicaid reimbursement rate in the nation. Most states are between 50-55 percent. The change envisioned in the bill could cost some of them, including powerful states such as California and New York, billions of dollars a year.
Obamacare simply has to be repealed and replaced. The question is whether Congress can get over the political hurdles standing in the way of doing so.
Mike Myer can be reached at firstname.lastname@example.org.