Christopher Cheney | March 25, 2014
Medicaid expansion, regulation of insurers, and oversight of private insurance plans are key factors in the national healthcare reform effort, a Commonwealth Fund report suggests.
“In states choosing not to expand Medicaid, more than 15 million underinsured and uninsured people have incomes below poverty—earning less than $23,550 a year for a family of four,” the Commonwealth Fund report released this morning says. “Unless their states expand Medicaid, there will be no new coverage options—either Medicaid or premium assistance—available to them.”
On a teleconference call to present the findings Monday, the lead author of the report said the resister states are taking a high-risk gamble. “There’s a lot at stake when we exclude those under 65 from having insurance,” said Commonwealth Fund Senior VP Cathy Schoen. “It’s a very valued good. It’s something people want and they want better health.”
The research sets state-by-state baseline data for the number of uninsured and underinsured across the country before the introduction of healthcare reforms under the Patient Protection and Affordable Care Act.
Low-income individuals were considered underinsured if they had health insurance but spent 5 percent or more of their income on medical costs. People in higher income brackets were considered underinsured if they spent 10 percent or more of their income on medical costs.
The key findings of the report include:
- Thirty-two million people under age 65 were underinsured in the United States in 2012.
- The rate of the underinsured in states ranged from a low of 8 percent in New Hampshire to a high of 17 percent in Idaho and Utah.
- Low- and middle-income people were at highest risk of being underinsured, accounting for 30 million of those who had health coverage but lacked adequate protection against high health costs. Low-income people face the highest risk by far, with 26 million listed as underinsured.
- About 47 million people were uninsured in 2012, a decline of nearly 2 million from 2010. The improvement is almost entirely due to the provision of the PPACA that allows children 25 and under to remain on their parents’ health plans.
- About 2 million people have joined the ranks of the underinsured since 2012, mainly because of the proliferation of high-deductibles and other cost-sharing burdens for consumers.
Oversight of Private Insurance
The Commonwealth Fund’s Schoen says payers and providers have essential roles to play if Medicaid expansion is going to be successful. “When we’re offering insurance,” she said of the emerging post-PPACA markets, “it’s the private insurers we’re relying on.”
The report calls for “effective oversight of private insurance plans” and Schoen says effective regulation of insurers is a key factor in the national healthcare reform effort because they are creating the provider networks that form the foundation for insurance policies.
“They are agents, and they are organizing care systems for us,” she said. “We’re relying on private insurers to provide us with options, and we want to make sure they do a good job… This is really a chance for them to prove themselves.”
“Comprehensive, decent coverage” for all Americans is in the interest of hospitals and physicians, Schoen said.
The practical benefits for providers include an overall improvement in patient health that will drive down healthcare costs as well as less bill collection activity, she said.
‘Enormously Complicated Product’
Dr. David Blumenthal, president of the Commonwealth Fund, speaking on the call, said that reforms introduced under the PPACA offer both opportunities and challenges for consumers, who are expected to play a pivotal role in the evolving health insurance marketplace.
“For the first time, we have a transparent market,” Blumenthal said. “People have the ability to see what’s offered and to make a choice.”
But the choice is not an easy one, especially for consumers who have never had health insurance before, he said. “Insurance is an enormously complicated product,” Blumenthal said. He noted that many who decided against obtaining health insurance this year on the PPACA exchanges “weren’t sure whether the plans were right for them.”
Devising health insurance access mechanisms such as the PPACA exchanges is only the first battle in a lengthy US healthcare reform campaign, he said. “Once we create a structure that enables people to get insurance, we’re going to have to embark on a long-term process” to educate consumers, Blumenthal added.
So far, 24 states have opted not to expand Medicaid, according to the Commonwealth Fund. New Hampshire is expected adopt a modified form of Medicaid expansion this week, with federal Medicaid dollars set to be used to subsidize the purchase of health insurance on the PPACA exchange.
The Granite State’s proposed Medicaid expansion, a bipartisan approach crafted in the state Senate, simplifies the enrollment process for beneficiaries, State Senator Nancy Stiles (R-Hampton), said in an interview Monday. Offering health insurance to Medicaid expansion enrollees on the exchange avoids people having “to switch from place to place” to get coverage, she said.
But Schoen believes the biggest boost to providers could come from creating a healthcare system that does not segregate patients based on their ability to pay. “It would be a new day in America if doctors didn’t have to look at someone’s wallet before providing care,” she said.
Obamacare Subsidies Face Skeptical Appeals Court Judges
The Obama administration’s claim that its health-care overhaul allows subsidies on health plans bought through a federal exchange met skepticism from an appeals court panel, with two judges suggesting the law as written doesn’t support the payments.
The government’s argument that the court should look to Congress’s intent on the subsidies, rather than gaps in the statute opponents say make the payments illegal, fell flat with U.S. Circuit Judge A. Raymond Randolph.
“What you’ve got is language that’s not malleable,” he said today during a hearing in Washington. “An exchange established by the state” means “an exchange that’s established by the federal government?”
Circuit Judge Thomas Griffith said determining what Congress intended was difficult because “there doesn’t seem to be a lot of clear legislative history.”
The tax subsidy dispute strikes at the financial heart of the Patient Protection and Affordable Care Act, posing a broader threat than a challenge to a requirement that employers’ insurance cover birth control that was argued today at the U.S. Supreme Court.
The arguments of the law’s opponents turn on the absence of a single number in crucial passages of the 2,409-page statute.
The missing number, 1321, refers to a section of the Patient Protection and Affordable Care Act that directs the federal government to establish an insurance marketplace in states that decline to create the exchanges, where low- and moderate-income people can buy health insurance and get subsidies for it.
Key Passages
Key passages of the law, including who’s eligible for a subsidy, are missing a reference to that section, signaling they only apply to state-run exchanges, according to the plaintiffs.
As a result, millions of otherwise qualified people in the 36 states that haven’t set up marketplaces are ineligible to receive the subsidies, they say.
Judge Harry Edwards, a member of the three-judge panel, said the case is an attempt to undermine the entire health-care law.
“That’s what this case is about — to gut the statute,” he said.
“It’s the last legal challenge that could derail this law,” Christopher Condeluci, who was on the Republican staff of the Senate Finance Committee when it crafted portions of the health-care overhaul, said before today’s hearing.
The omission of references to section 1321 was “a drafting error,” said Condeluci, now a lawyer at Venable LLP.
‘Congressional Intent’
“The four digits aren’t there, so should the court try to read into congressional intent that 1321 was supposed to be there?” Condeluci said. “Yes. That was the intent.”
Without the subsidy on the federal exchange, many of the 17 million eligible individuals couldn’t afford insurance, which would undercut the law’s central goal of extending coverage, according to Ron Pollack, executive director of the advocacy group Families USA.
“It would mean that the effort to expand insurance coverage in the vast majority of the states would pretty much be halted,” Pollack said in a phone interview.
Michael Cannon, director of health policy studies at the libertarian Cato Institute, echoed court papers in arguing that the statute should be read literally.
The Democratic-controlled Congress restricted the eligibility for subsidies to state-run exchanges because it wanted to force states to set up the marketplaces, Cannon said in a phone interview.
‘They Miscalculated’
“They miscalculated,” said Cannon, co-author of a 2012 paper calling attention to the problematic wording of the eligibility standards. “Everyone assumed that all states would establish exchanges.”
“This was a ‘drafting error’ that was made nine times” in the law, Cannon said. “That tells you, no, this wasn’t an error. It was done deliberately.”
The law directs that subsidies should go to income-qualified people enrolled in exchanges “established by the state.” It can’t be stretched to mean ‘established by the state or by the federal government on behalf of a state,’’’ Cannon said.
The plaintiffs are business owners from six states with federally established marketplaces. Represented by Michael Carvin of Jones Day, they contend that the Internal Revenue Service’s decision to extend credits to people buying health plans on a federal exchange triggers mandates and penalties they shouldn’t be subject to.
Lawsuit Tossed
Their argument hasn’t found traction in courts.
In Richmond, Virginia, U.S. District Judge James Spencer, an appointee of Republican President Ronald Reagan, found no support in the legislative history of the Obamacare law for the idea Congress intended to condition federal funds on state participation. His Feb. 18 dismissal of the case is on appeal.
Two other cases are pending in federal court in Indiana and Oklahoma.
In Washington, U.S. District Judge Paul Friedman, an appointee of Democratic President Bill Clinton, said there’s more than one reasonable way to interpret the challenged phrase “exchange established by the state” when it’s read in isolation. Taking a broader view, it’s clear Congress intended to make the subsidies available on both state and federal exchanges, he ruled on Jan. 15.
Friedman’s decision set up today’s arguments before a three-judge appeals court panel.
Source: Health Leaders Media
http://www.healthleadersmedia.com/page-1/HEP-302209/Medicaid-Expansion-Payer-Oversight-Seen-as-Vital-to-Healthcare-Reform