Medicaid Providers Could Lose Billions if Supreme Court Tosses Health Overhaul Law

On March 26, the U.S. Supreme Court will begin three days of oral arguments on the constitutionality of President Barack Obama’s health-care overhaul law which was signed into law on March 23, 2010.

Most of the attention has been focused on whether the court will reject the individual mandate, a provision that requires individuals to obtain health insurance, and less attention has been paid to the possibility that the entire law could be overturned. If the entire rule is overturned there will be consequences for Medicaid and it will affect health-care providers that do business with state Medicaid programs.

Bloomberg Government released a study today which examines the size and scope of the projected revenue that the Medicaid program will direct to companies doing business in the 27 states that have filed suit over the constitutionality of the overhaul law. It looks at the impact a ruling against the law would have on managed care plans, nursing homes and inpatient hospitals, the top recipients of Medicaid spending, over a five year period, from 2014 to 2018.

The study takes a specific look at the potential impact on health-care providers in Florida and Virginia, the two lead litigant states. The study finds:

1. Medicaid providers doing business in the 27 litigant states can expect an increase in federal and state Medicaid revenue for the period 2014 to 2018 if the law is upheld. Managed-care plans, nursing homes and impatient hospitals would increase by billions of dollars in those five years.

2. Texas and the Medicaid healthcare providers doing business there stand to see the largest increase in projected expansion-related Medicaid spending if the law goes into effect. The federal and state portions of Medicaid are expected to steer 22.2 percent of all increased spending among the suing states over the 2014-2018 period, to Texas alone.

3. In Florida, where the top five health plans accounted for almost 70 percent of Medicaid managed-care premiums in 2011, the projected revenue increase is $3 billion, $2.1 billion alone for the top five plans. They are led by Sunshine State Health Plan Inc., a Centene Corp. company. In Virginia the lead provider is HealthKeepers Inc., a WellPoint Inc. company, which would take a third of the projected $1.9 billion in new revenue.”

Bloomberg Government subscribers, log in to read the complete study and see more detailed figures and calculations.

Matt Barry is a health analyst for Bloomberg Government focusing on Medicare, Medicaid, public health and prevention issues. Barry has more than 20 years of health policy experience in the executive and legislative branches of the federal government, non-profits, private consulting and public affairs firms. He has worked on payment and access issues under Medicare and Medicaid, tobacco control policy, rural health care, and childhood immunization policy.

This post first appeared at Bloomberg Government. To get access to this study and more contact them.

1 reply »

  1. I believe the law requires fees paid for most primary care services to be the same for Medicare and Medicaid starting in 2013 for 2 years. For docs In my state (CT) Medicare pays $75.89 for cpt 99213 (established patient office visit..the most frequently billed cpt code) while Medicaid pays $37.48 for an adult Medicaid recipient for the same code. The Medicaid fee would have to more than double to equal the Medicare fee. I am guessing that many more PCPs will be willing to see Medicaid patients at this higher fee. Maybe they’ll even be able to break even. How revolutionary.