A friend of mine told me the other day, “We’ve seen our insured patient population go from 15% to 70% in the few years since Obamacare.” As a primary care physician in the Midwest, he’s worked for years in an inner-city clinic that serves a poor community, many of whom also suffer from mental illness. Before the Affordable Care Act (ACA), the clinic constantly struggled to stay afloat financially. Too often patients would be sent to an emergency room because the clinic couldn’t afford to provide some of the simplest medical tests, like an x-ray. Now, with most of his patients insured through the Medicaid expansion program, the clinic has beefed up its staffing and ancillary services, allowing them to provide better preventive care, and in turn, reduce costly ER visits.
From the time Medicaid was established in 1965 as the country’s first federally-funded health insurance plan for low-income individuals, state governments have only been required to cover the poorest of their citizens. Before the ACA, some 47 million Americans were uninsured because their incomes exceeded state-determined benchmarks for Medicaid eligibility and they earned far too little to buy insurance through the private marketplace.
The ACA reduced the number of uninsured Americans by mandating that states increase their income requirement for Medicaid to 138% of the federal poverty line (about $1,330 per month for a single individual), and promising that the federal government would cover the cost to do so. However, in a 2012 decision, the Supreme Court left it to the states to decide if they wanted to increase their Medicaid eligibility. If they agreed to adopt Medicaid expansion, the federal government offered to cover 100% of the increased cost in 2014 and 90% by 2021.
What is the effect of expanding Medicaid on overall healthcare costs and use of the emergency room? This type of question can’t easily be answered by observational studies and requires a randomized controlled trial (RCT). But an RCT isn’t easy to perform. However, a natural RCT serendipitously happened in Oregon a few years ago when Medicaid was expanded and the eligibility was deemed by a lottery system.
On this episode of Firing Line, Saurabh Jha (@RogueRad) speaks to Professor Katherine Baicker, a leading economist and the Dean of the Harris School of Public Policy, and principal investigator of the Oregon Health Insurance Experiment, about the landmark study.
Listen to our conversation here at Radiology Firing Line Podcast.
Among all the talk of waves and tides of the close midterm races around the country, there were tremendous results on election day for Medicaid expansion. Three states – Idaho, Nebraska, and Utah – passed ballot initiatives approving the policy.
On top of that, in Kansas and Maine, governors who had vetoed the policy in the past were replaced with candidates promising to enact it.
This was obviously great news for supporters of Medicaid expansion with the total number of expansion states firmly at 36.
What were the issues?
In Idaho, the Expansion ballot initiative was designed to provide insurance covers for individuals under the age of sixty-five and whose income is below 138 percent of the federal poverty level and who are not eligible for any other state insurance cover.
Among the proponents of Medicaid in Idaho was State representative Christy Perry a Republican and staunch Trump supporter. She had over the years attempted to push for the expansion through the state legislature but faced resistance from statehouse leaders.
The scenario in Idaho applies to Utah and Nebraska, with the ballot initiative being necessitated by the strong opposition from the majority of Republicans and statehouse leaders. In Utah, opponents of the Expansion argued that the initiative would bankrupt the state treasury. In Nebraska caution was given against reliance on federal government financing for state programs noting that often the national government scale back or neglect supporting state programs without proper transitional mechanisms.
However, it was difficult to debate against the fact that Medicaid would free up resources invested by the state governments in local insurance programs and that the federal government is legally obliged to pay 90% of the cost of the policy.
Amid fresh political rancor and legal machinations in the ongoing war over the Affordable Care Act (ACA), there’s a bright spot: Medicaid. At least for now.
This matters. True to predictions made by Obama and supporters when the ACA became law (2010), it has taken years and a lot of blood, sweat and tears to get to this moment.
As a reminder, the U.S. Supreme Court in 2012 ruled that states could opt out of the ACA’s Medicaid expansion—leaving each state’s decision to participate in the hands of governors and state lawmakers.
On June 7, after a 4-year pitched political battle, Virginia became the 33rd state (plus DC) to expand Medicaid under the ACA. The Virginia expansion is projected to encompass 400,000 low-income Virginians.
The state swung in favor of expansion after Democrats gained the governorship and more seats in the legislature in 2016. But, importantly, key moderate Republicans relented.
Four other non-expansion states could join Virginia over the next year or two. They are Maine, Idaho, Utah, and Nebraska.Continue reading…
With concern rising that a Republican alternative to Obamacare could fail to adequately cover pre-existing conditions (“Eight billion won’t even begin to cover it,” one Washington insider told THCB late this week) and will likely sharply cut benefits for Medicaid recipients, a number of states are preparing contingency plans. Some are preparing legal challenges. In California, progressives are once again laying the groundwork for a single payer system.
Could it happen? And could California serve as a model for other states?
California, the largest state in the union by population and the world’s sixth-largest economy, has good reason to push public policy in the opposite direction.
President Obama was right last week to pivot to two things in the wake of the Supreme Court’s Affordable Care Act (ACA) decision: (a) a plea to Republicans (yet again) to please, pretty please drop their opposition to the law and join him in tweaking it and fixing what remains broken in healthcare, and (b) Medicaid expansion.
It’s probably too much to hope Republicans will drop their fierce attempts to trash, dismember or repeal the law—as the political season leading to the Nov. 2016 elections gets underway in earnest.But Medicaid expansion could prove a fruitful path to concrete results.
As a reminder, the 2012 Supreme Court decision on the ACA nullified the law’s provision compelling states to expand Medicaid.Instead, it made such expansion voluntary.Continue reading…
House Energy and Commerce Chairman Fred Upton along with Senate Finance Chairman Orin Hatch and Senator Richard Burr have outlined what is, at least for now, the Republican alternative to Obamacare.
Republicans will now argue they have a better health insurance reform plan and that Obamacare should be repealed and replaced by it––particularly if the Supreme Court plunges the new health law into chaos by throwing the subsidies out in 37 states.
They will have an uphill battle. Not because these Republicans don’t have a lot of good ideas, but because they have put a list of big and complicated changes on the table. Lots of people may not like Obamacare but Republicans have now really muddied the waters with a huge take it or leave it alternative that will have plenty of its own reasons to give voters pause. Continue reading…
While fierce debate continues to envelop much of the Affordable Care Act, financial data for many of the nation’s health systems reveal one clear fact: the optional Medicaid expansion has resulted in hospital haves and have nots.
An analysis by PwC’s Health Research Institute (HRI) of newly released earnings and patient volume data shows a clear financial split between healthcare providers operating in states that expanded Medicaid and those that have not. The law as written would have provided Medicaid coverage to every American earning less than 138% of the federal poverty level ($16,105 for an individual). But a June 2012 Supreme Court ruling made the expansion optional for states, creating a patchwork of coverage.
Health systems and physician groups delivering care in the 26 states and the District of Columbia that have embraced the federally-funded expansion have reported a significant rise in patient volumes and paying consumers and a measureable reduction in uncompensated care levels.
This year alone LifePoint Hospitals has seen a 30.3% reduction in its uninsured and charity care patients, according to filings with the Securities and Exchange Commission. Tenet Healthcare, which operates in five Medicaid expansion states, saw uninsured and charity care admissions decline by 46% in the expansion states, coupled with a 20.5% increase in Medicaid inpatient admissions in those same states, according to an HRI analysis which will be released next week.
In all, HRI analyzed financial data from the nation’s five largest for-profit health systems—HCA Holdings, LifePoint, Tenet, Community Health Systems and Universal Health Services, representing 538 hospitals in 35 states. Our team also reviewed data from several mid-sized hospitals, government reportsand industry surveys.
In September 2012, I said that Republican governors should be expanding their Medicaid programs under Obamacare.
I argued that Republicans have long called for state block grants and the flexibility to run their own Medicaid programs in what are the state “laboratories of democracy.”
I made the point that, given the then recent Supreme Court decision enabling states to opt out of the expansion, the Obama administration would be hard pressed to deny any reasonable proposal from Republican governors.
If Republicans really believed in state responsibility and flexibility for how they run their Medicaid programs, this was the opportunity to prove it. (See here.)
Since then, a few Republican governors have taken that tack and the Obama administration has been very cooperative and flexible.
This is a good place to recognize outgoing HHS Secretary Sebelius for her leadership by being willing to work with state Republicans in order to get millions of people covered who wouldn’t be getting coverage otherwise.
Good faith Republican Medicaid proposals have led to good faith responses from Sebelius’ Department of Health and Human Services (HHS) and a few done deals and other deals still in the works.
Many Republicans have said that Medicaid is not sustainable and that the feds could well cut the new Obamacare funding in future years. Sebelius responded by giving these governors an out if funding were to be cut.
Of course Medicaid is unsustainable, that’s why the states should be given the autonomy to run their own plans and deal with these challenges in any number of different ways the country can learn from.
With the ACA exchange enrollment deadline almost behind us, this is a good time to take a look at the big picture.
Three years after the first baby steps of implementation, what has the ACA accomplished?
When we consider the ACA, we can think of two broad goals. The “easy” goal was expanding coverage to the uninsured. We say “easy” because regulators should be able to succeed by simply throwing money at the problem, and that is a task our elected officials seem particularly adept at accomplishing.
The “hard” goal was bringing down the rate of growth in health care spending.
This has proven to be a difficult task for policy makers, who have been trying (and failing) for decades and have often done more harm than good.
We first consider the goal of expanding coverage to the uninsured. From its onset, the ACA chalked up a small victory by requiring plans to continue coverage for dependents under age 26.
This provided coverage to as many as three million uninsured, albeit the healthiest members of the population. The lion’s share of the reduction in the numbers of uninsured was supposed to come from Medicaid expansions and private exchanges.
And here is where the problems emerge.
Medicaid ranks have swelled in the 27 states (including DC) that have chosen to expand the program. Republican leadership in other states continue to assert they will not expand Medicaid, but given the exceptionally generous federal funding for this expansion, we find it hard to believe that most of these states won’t soon join the expansion.