Happy New Year!
Apparently 2012 will be another year in a series of consecutive years to fix our national healthcare system, and the states still have a starring role. The last two months saw another round of national legislative conferences, the Supreme Court’s allocation of two days of arguments for lawsuits affecting the federal health care law, and the report that Medicare’s 10-year spend on “male vacuum erection systems” will surpass a quarter of a billion dollars since 2001. (According to their 2011 report, Medicare spending is expected to grow from 3.6% of U.S. gross domestic product in 2010 to roughly 10.7% of GDP in 2085.) It seems an appropriate time to consider some of the issues about the all-important state of our health insurance.
The all-out fight on healthcare reform shaped the last national election and is very likely to be a major factor this year. We are witnessing specific policy battles, a historic standoff between state and nation, and myriad consequences from the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010, collectively referred to as the Affordable Care Act or ACA.
If you missed this for some reason, the ACA mandates significant changes in insurance underwriting and regulation, premium rate calculations, and most importantly, covered benefits. Most of the impact will begin on Jan. 1, 2014, safely after the next presidential election, but popular changes have already occurred, such as the elimination of exclusions for pre-existing conditions and raising the age that children can be covered on parent’s policies. I use the official name “Patient Protection and Affordable Care Act” instead of “ObamaCare” to remind us that, as a Newsweek columnist said during the congressional debate: “An eight-year-old wouldn’t believe that we are going to cover 30 million more people and save money.”
Apparently George Orwell was off by a couple of years, but we are very much into adopting new meanings for ordinary English words these days and fashioning national policy to produce outcomes for favored categories of people. For the moment, we will leave the rich-poor, urban-rural, alternative energy-carbon fuel, union-nonunion and private-public purported biases to future comments, and concentrate on a couple of specific examples of how the health care law works in concert with a political agenda.
A report issued by Congress last month shows that the tax provisions of the ACA favor unmarried persons over married couples in several ways. The Joint Taxation Committee estimates that married couples will receive only 14% of the ACA’s credits. “At most, only two million married couples (out of nearly 60 million married couples) are projected to benefit from the health insurance tax credit in any year through 2021.” The Manhattan Institute for Policy Research claims that when the new law takes effect “Americans at both ends of the income scale will find it more advantageous to stay single than to marry, even more so than under the current tax code. And women will face greater incentives to leave the workforce.”
The ACA mandates a fee on all private insurance plans to fund federal “comparative effectiveness research” or studies into which treatments work best for particular conditions. One way to view this is a tax on the middle class to fund research that could be used to justify imposition of limits on medical treatments. A political means testing of every kind of medical procedure and device is not a comforting idea either if one’s body is not average or if one has any notion of how political research has become when billions of dollars are at stake.
In the states, the exchange issue is occupying most of the policy space right now, and several states have decided that they will not proceed at all or have declared their intention to wait until the Supreme Court acts on the ACA provisions this spring. The latter course puts a time burden on them to get an exchange up for HHS approval by next January, and Arkansas has already concluded that it couldn’t meet even the 2014 deadline. Some states are apparently counting on the lack of any federal funding after 2015 to establish or run the back-up federally run exchanges, and/or the lack of any mention in the law of subsidies for insurance premiums in federally run exchanges. A few state officials have suggested that it undermines their constitutional arguments against the ACA to hurry to comply with its provisions.
The U.S. Supreme Court has set aside five and one-half hours of oral argument in late March or April to enable it to decide the constitutional issues on appeal from the various parts of the country. One hour of oral argument is to be devoted to whether the expansion of Medicaid infringes on state’s rights. The inclusion of this issue with the constitutionality of the individual mandate was a surprise to many, since none of the four lower courts had decided that it was impermissible federal coercion under the tenth amendment as 26 states, including Ohio, and the National Federation of Independent Business have argued.
The challenge for Ohio and most states can be found in the huge expansion of Medicaid. According to the 2011 Milliman report for Ohio, the public insurance population is estimated to increase 52% from 2010 to 2017, the year when previously uninsured persons should all be enrolled. Over one-third of Ohioans not yet 65 years old will be eligible for Medicaid, and more than half of the new enrollees are expected to migrate from employer plans and individual health insurance. Currently, there are seven state agencies, 13 area agencies on aging, 56 county Alcohol, Drug and Mental Health boards, 88 county development disabilities boards and 88 county boards of jobs and family services to implement various pieces of the Ohio Medicaid program, and they should all be very busy for the next couple of years.
