[NYAPRS Enews] Republican Governors and Obamacare: the Economic Case

[Briana Gilmore]

NYAPRS Note: The two articles below highlight opportunities for Medicaid expansion in conservative states that we will likely see more of in a new election cycle and budget season. Many of us are familiar with the political stressors around Medicaid expansion, and that not expanding Medicaid-while perhaps politically beneficial in some states-is fiscally irresponsible, particularly for some conservative-led states that have particularly high rates of poverty. But now that marketplaces are up and running in many states, some leaders have decided to capitalize on the expansion benefits by convincing their peers and constituents that they should expand as long as CMS gives them something in exchange. As the first article indicates, many of the reforms conservative governors are seeking are not actually new, and many are not contested by CMS; in fact, central to the flexible provisions of the ACA are several measures that enhance private market accountability and competition, and puts more money and control into the hands of consumers. Measures like premium allowances, self-directed budgets, and health assessment incentives are promoted by liberal governors as being about rights and equality, while conservative leaders tout the same as free-market capitalism in health care. For beneficiaries, these negotiations largely won't matter, as long as legislatures are willing to take the "bargain" from the feds and vote to approve expansion.

Republican Governors Have Found Something They Like About Obamacare
Vox.com; Sarah Kliff, 5/20/2014

Indiana Gov. Mike Pence really hates Obamacare. He refused to set up an insurance exchange and, while serving in Congress, voted repeatedly for repeal. But now Pence has found something Obamacare is good for: forcing the Obama administration to agree to conservative Medicaid reforms they might not otherwise consider.
As governor, Pence had the final say on whether his state expands Medicaid to 350,000 Hoosiers - and he wasn't shy about using that leverage with the Obama administration. Pence demanded that, if he were to sign onto the Medicaid expansion, it would only happen if he could use Indiana's controversial, Bush-era Medicaid experiment<http://www.governing.com/news/state/Gov-Pence-Pushes-Controversial-Healthy-Indiana-Plan.html> as a vehicle.
"We made it very clear what our position was: if we were able to see the Healthy Indiana Plan waiver renewed, that we would be willing to continue a dialogue about using [that] as a framework for further discussion," Pence said Monday during a presentation at the American Enterprise Institute.
Pence announced last week <http://www.vox.com/2014/5/15/5716350/indianas-expanding-medicaid-thats-a-big-deal> that he would endorse the Medicaid expansion, becoming the 10th Republican governor to sign onto the program. He joined the growing ranks of state officials using their sway over a key White House priority to extract significant concessions in how Medicaid works.
"The administration is working very hard to come to agreement with Republican governors where they can," says Tevi Troy, president of the American Health Policy Institute and a former Health and Human Services official in the Bush administration. "Because they want people to sign up for the expansion, particularly a high profile governor like Pence, they're working pretty hard to make compromises."
Six governors - five Republicans and one Democratic - have used the Medicaid expansion as a moment to petition the Obama administration for waivers. These agreements give states permission to make changes to Medicaid that aren't otherwise allowed, like changing the benefits patients receive or allowing a private company to run their health coverage rather than the state.
In giving states this flexibility, there's a tension for the Obama administration: it wants to maintain Medicaid as a safety-net program, with a robust set of benefits, but also give states a chance to experiment with new approaches.
The waivers granted in Medicaid expansion negotiations are reshaping the program. They make the public-insurance program look more like private coverage and rely more on enrollees to manage their own care.
Observers say the waivers are partially about policy, partially about politics: it's a lot easier for governors to sell a Medicaid expansion to a conservative state if they can point to concessions earned in the negotiations.
"The governors realize this is a once in a lifetime opportunity," says Tom Scully, who ran the Centers for Medicare and Medicaid Services under George W. Bush. "They're going to get a lot of federal money but also don't want to kill themselves in the process."
Over the past year, states have proposed a handful of new ways to run their Medicaid expansion programs.
Arkansas, Iowa and Pennsylvania are pursuing Medicaid expansions that enroll patients into private health insurance, with premiums paid by public dollars. This flexibility did exist prior to Obamacare, but states had barely used the option until conservative states were looking for more palatable ways to grow an entitlement program.
"We've always had this concept of premium assistance as an option," says Joan Alker, who runs the Center for Children and Families at Georgetown University. "But with the Medicaid expansion waivers, states are taking it in a whole new direction."
Medicaid beneficiaries in these states can shop on the health exchange just like people buying coverage. They enroll in the same plans, and receive the same ID cards in the mail - making the Medicaid experience much more like the individual market. Between the three states, there could be 648,000 people eligible for this newly-privatized version of Medicaid.
States have increasingly pushed the limits of this so-called "private option." Arkansas, which pioneered the approach, guarantees Medicaid enrollees access to some of the benefits that aren't usually part of private insurance, like paying for rides to the doctor.
Iowa's expansion plan, approved by the Obama administration in December, relieves the state of the traditional requirement to cover non-emergency transportation - meaning that Medicaid enrollees there will have a slightly less robust benefit package as a result of the state waiver.
Other states are looking at different approaches: Michigan, for example, wants to administer an annual health assessment<http://www.vox.com/health-care/2014/5/13/5712566/arkansas-and-michigan-prove-that-conservatives-can-get-behind-the> as a condition of expanding Medicaid. Under that approach, Medicaid enrollees would have to provide information about potential medical risks.
Those assessments could potentially be used in some type of incentive program, much like employers have increasingly given financial rewards to workers who participate in healthy behaviors like going to the gym or joining a smoking cessation program.
Pence's plan expands Healthy Indiana, a program started in 2008 to expand coverage to about 40,000 low income Indiana adults. Approved by the Bush administration, Healthy Indiana pioneered some of conservatives' favorite health policy approaches in Medicaid. It created health savings accounts that all Healthy Indiana enrollees would have to contribute a monthly premium into - or, like in private coverage, have their coverage cancelled if they don't.
Pence's plan to expand Medicaid in Indiana would put an additional 350,000 people into the Healthy Indiana Plan, with a similar structure for premium contributions. It would, by far, be the broadest use of health-savings accounts in the Medicaid program - so broad that Pence wasn't initially sure the White House would sign off.
"My first objective was I wanted to preserve the Healthy Indiana Plan," Pence says. "Frankly, in the wake of the 2012 elections, there were some who speculated we wouldn't be able to do that...there was a lot of skepticism about whether the administration would be willing to extend a waiver."
Not everything is on the table
The Obama administration hasn't signed off on all the changes that Republican administrations have requested. Medicaid is meant to be a safety-net program and certain changes - like putting a cap on how many people can sign up, for example, or significantly increasing enrollees costs - are unlikely to get federal sign-off.
It rejected<http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/10/the-feds-sign-off-on-expanding-medicaid-to-72000-iowans/> Iowa's proposal to charge a small premium to everyone who earned more than 50 percent of the federal poverty line (about $5,500 for an individual) out of concern those payments would be too onerous for the lowest-income beneficiaries.
"Everybody has red lines," Troy says. "Republicans and Democrats have some different priorities and they need to figure out which ones match up."
And a waiver doesn't always guarantee a Medicaid expansion: Florida Gov. Rick Scott secured additional federal flexibility <http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/25/could-obamacare-make-medicaid-more-republican/> to introduce more private insurers into his state Medicaid program but never sold his conservative legislature on expanding the program.
Indiana got the Obama administration's sign-off on a one-year extension<http://kff.org/medicaid/fact-sheet/healthy-indiana-plan-and-the-affordable-care-act/> of Healthy Indiana last year. It will submit a waiver request later this summer, asking the White House for permission to use that same structure in the Medicaid expansion.
Pence will have to make some changes to Healthy Indiana to get federal approval. He'll have to end the standing enrollment limit that currently helps keep the program in the red and provide more benefits to beneficiaries below the poverty line.
Those aren't likely to be dealbreakers; the waiver in negotiation would still bring sweeping change to Indiana's Medicaid program. Pence says the discussions with Health and Human Services have so far been "productive" and he's optimistic about getting approval.
"For me, the key here is to expand on the leadership that Indiana has provided on Medicaid and preserve those elements," Pence told reporters after the AEI event. "Our discussions with federal officials have been very constructive and productive."
What happens to poor people in non-Medicaid expansion states?<http://www.vox.com/cards/obamacare/what-happens-to-poor-people-in-non-medicaid-expansion-states>
People who earn less than the poverty line cannot qualify for subsidized private insurance - the legislators who wrote Obamacare anticipated that this population would gain Medicaid coverage and so did not include them in the subsidies. That's left some of the poorest Americans in a coverage gap, where they are too poor to earn subsidies to help purchase insurance.
[Kff11_medium]<http://cdn0.vox-cdn.com/assets/4195287/kff11.png>

The Economic Case for Medicaid Expansion

Huffington Post; Eva M. Clayton, 5/20/2014



>From a quick glance at the number of North Carolinians who signed up for healthcare in the first enrollment period, it's clear that the citizens of our great state not only needed the coverage, but also wanted it. Their resolve to have health care was in spite of the efforts of Governor Pat McCrory and House Speaker Tom Tillis, who did everything in their power to prevent over 357,000 citizens<http://www.fayobserver.com/news/local/article_58c34dea-3c83-5596-81d9-f3bd1c2013da.html> who signed up, amid the flawed launch of HealthCare.gov, from having access to affordable health care.

Fortunately, for low-income individuals and families in the state, North Carolina has a second chance during the upcoming short session of the General Assembly, which begins this week, to improve the lives of 500,000 North Carolinians by accepting the Medicaid expansion provision under the Affordable Care Act. Increasing access to health care coverage among low-income working parents is expected to have a number of positive impacts on the overall health of North Carolina families.

Instead of opposing Obamacare simply because it will define President Barack Obama's legacy, the NC General Assembly has an opportunity to reassess the value of health care coverage to the uninsured, taxpayers, and hospitals in our state. Most importantly, expanding Medicaid for those families with incomes up to 133 percent of the federal poverty level is the economically responsible decision for our state's future.

Rejecting the Medicaid expansion not only negatively impacts the productivity of our state's workforce; it will also cost North Carolina financially. Accepting the federal dollars from the expansion of the program, will help our state budget, spur job growth, and improve the health care of a half million adults. The federal government will pay 100 percent of the expansion for the first three years and 90 percent of the cost thereafter.

Under the existing Medicaid system, as reported by the NC Justice Center, public dollars (state, federal and local) pay 75 percent of the total cost of uncompensated care.<http://www.nhchc.org/wp-content/uploads/2013/01/NC-Budget-and-Tax-Center.pdf> This is care provided to individuals who lack health insurance, but seek care from hospitals and emergency rooms without the ability to pay. Even without expanding Medicaid, our state will still be on the hook for those without care and will be forced to pay for indigent care through our tax dollars.

What's more, North Carolina's total Medicaid cost is reported to be<http://www.newsobserver.com/2013/10/12/3272904/without-medicaid-expansion-no.html> approximately $14 billion. Of that, the state's portion is roughly $3 billion, with the federal government covering the remainder. In the absence of the Medicaid expansion, the state's portion is estimated to increase to $4.4 billion by 2019<http://www.nhchc.org/wp-content/uploads/2013/01/NC-Budget-and-Tax-Center.pdf>. Using these same figures at a 90 percent match rate by the federal government, the state's cost would drop to $1.4 billion. The cost savings from the expansion can be used to create jobs, invest in education, and identify opportunities to expand economic development in rural areas, improving the quality of life for citizens of our wonderful state - all at no additional cost to taxpayers. This is common sense, morally imperative and fiscally sound.

Doing nothing will cripple hospitals in the state. North Carolina's hospitals are estimated to lose around $600 million annually without the Medicaid expansion according to the analysis of North Carolina Institute of Medicine. UNC Health Care, alone, is set to lose $85 million in forgone annual revenue. That is $85 million that could be used for research and improving health outcomes or cutting edge equipment and technology.

Governor McCrory and Speaker Tillis' refusal to accept federal dollars to pay for the care of the uninsured is not rational, fiscally irresponsible, and lacks moral standing. This is especially difficult to understand given North Carolina's current budget shortfall.

The Moral Monday protests will continue in earnest with various organizations, community leaders, and churches across the state advocating for action on issues -- including making the moral case for Medicaid expansion. Hopefully, Speaker Tillis and Governor McCory will provide the leadership to quickly move the General Assembly to reconsider Medicaid expansion as lawmakers continue to grapple with our state's budget this session.

Implementing Medicaid expansion quickly, effectively, and responsibly will not only improve the lives of hundreds of thousands of struggling North Carolinians through greater access to coordinated health care, but it will save the state and taxpayers billions of dollars. Being fiscally responsible, while crafting policy with a moral underpinning, represents the best of North Carolina's values -- let's hope leadership in Raleigh will exercise their best values during this session.
http://www.huffingtonpost.com/eva-m-clayton/the-economic-case-for-obamacare_b_5351973.html?utm_hp_ref=politics&ir=Politics
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://kilakwa.net/pipermail/nyaprs_kilakwa.net/attachments/20140522/4159f3c4/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 84119 bytes
Desc: image001.png
URL: <http://kilakwa.net/pipermail/nyaprs_kilakwa.net/attachments/20140522/4159f3c4/attachment.png>