States Refuse Medicaid Expansion, Leaving Millions Without Coverage

Partisan hardline opposition to Obamacare is trumping what many observers sees as a win-win deal for states.
By @MMichaelsMPN |
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    In this July 12, 2012 photo, two women wait in an exam room at Nuestra Clinica Del Valle, in San Juan, Texas. About 85 percent of those served at the clinic are uninsured. Texas already has one of the nation’s most restrictive Medicaid programs, offering coverage only to the disabled, children and parents who earn less than $2,256 a year for a family of three. Without a Medicaid expansion, the state’s working poor will continue relying on emergency rooms _ the most costly treatment option _ instead of primary care doctors. The Texas Hospital Association estimates that care for uninsured patients cost hospitals in the state $4.5 billion in 2010. (AP Photo/Eric Gay)

    In this July 12, 2012 photo, two women wait in an exam room at Nuestra Clinica Del Valle, in San Juan, Texas. About 85 percent of those served at the clinic are uninsured. Texas already has one of the nation’s most restrictive Medicaid programs, offering coverage only to the disabled, children and parents who earn less than $2,256 a year for a family of three. Without a Medicaid expansion, the state’s working poor will continue relying on emergency rooms — the most costly treatment option — instead of primary care doctors.(AP Photo/Eric Gay)

    Roughly 5.5 million Americans living across 21 states lack health care coverage that could be provided if states agreed to an expansion of the Medicaid program. The expansion is an incentive built into the Affordable Care Act (ACA) that was projected to extend healthcare coverage at little cost to state governments, which would have to cover a maximum of only 10 percent of costs after the first three years of the expansion.

    Last year, the Congressional Budget Office predicted that the Affordable Care Act, known popularly as “Obamacare,” would provide new coverage to 23 million people starting in 2016.

    The number of enrollees could continue to shrink as states decline the Medicaid expansion, leaving behind citizens like Erika Neal of St. Louis, Missouri, who is battling ovarian cancer and lacks coverage.

     

    Leaving behind the poor

    Latino Times reports that millions like Neal are stuck in a bureaucratic limbo as states refuse to take part in the Medicaid expansion that could provide coverage to low-income individuals who don’t qualify under the existing state and federal programs. Neal was diagnosed with a rare form of ovarian cancer, undergoing a hysterectomy in 2011.

    Since that time, she has seen her salary cut as deputy director of a nonprofit museum, and her job-based health coverage eliminated.

    Lacking insurance, she went more than a year without tests that would allow her to know whether the cancer had reappeared. She now relies on an emergency state program to pay for the quarterly tests but still worries about her future.

    “I’m always praying, but in 2014, my prayers will be ever more fervent,” Neal said. “If the cancer comes back and it’s not detected, it’ll kill me. Most ovarian cancers, by the time you find out you have it, you just need to plan your funeral. So it’s a blessing they have a test for it, but I can’t get the tests if I don’t have health insurance.”

    Legislatures in Missouri and 20 other states with Republican-controlled legislatures aren’t participating in the health care law’s Medicaid expansion, fearing that the cost would require state budget cuts in other areas, or an substantial increase in taxes. A few states are still debating whether it is worth the investment.

    “What we have now is a lot of states with Democratic governors and legislatures taking part and lots of red states vociferously rejecting the expansion. Those legislatures that reject the expansion hope and expect that ACA will be overturned or that future state legislatures will continue to reject the expansion,” said Professor Gary Burtless, a senior fellow in economic studies at the Brookings Institution, in a statement to Mint Press News.“I think the partisan opposition is so strong that these states would rather pursue a policy that may not be in the economic interest in their state.”

    In the meantime, patients are forced to rely upon free clinics, costly emergency care or forgoing treatment altogether.

    “There’s no way they can afford individual coverage at that income level, so they’ll do what they do now, which is they go to the free care pools in the hospitals, they go to public health clinics, they borrow from friends, they go to free clinics,” said Gerald Friedman, a health care economist at the University of Massachusetts Amherst, “and they just get sicker and sicker.”

     

    What about the cost?

    While Republican legislatures claim that this is an issue of dollars and cents, the data doesn’t appear to support that argument.

    Here’s how the expansion works: state governments won’t pay anything for the program over the first three years, and no more than 10 percent of costs after 2016. The original program has functioned with relatively few problems in both Democratic and Republican states since it was created as a result of the Social Security Amendments of 1965.

    “Even in the usual course of events, the Medicaid program is generously subsidized depending upon the states economic level. Richer states usually get a 50 percent reimbursement and poor states, 80 percent. In order to encourage high rates of state participation, I think the subsidies for expansion were even more generously subsidized even though they will become less in future years,” Burtless said.

    The Affordable Care Act sought to expand this coverage to more people by mandating that states take part in the expansion. The state mandate portion was struck down by the Supreme Court. “The government was going to impose penalties by taking back some of the subsidies that they were receiving for their existing programs, if those states did not participate there would be a penalty. That is the particular item that the SCOTUS ruled was unconstitutional. The federal government does not have the right to impose penalties for states that don’t participate, but they can receive subsidies if they chose to expand,” Burtless said.

     

    Is single payer the way to go?  

    It’s an issue thats not just affecting patients, but hospitals as well. Since the law requires hospitals to provide emergency care to the indigent, there currently is no way for hospitals to receive reimbursements for providing service.

    “Lots of hospitals and healthcare facilities find themselves in the position because they are legally obliged to those who don’t have insurance. If those folks were enrolled, then the hospitals would at least receive reimbursement, since most of that reimbursement comes from federal government,” Burtless said.

    This is the principle reason that the U.S. paid $2.6 trillion for healthcare in 2010, far more than any other highly developed country in the Organization for Economic Development in per capita expenses, according to reports from the Kaiser Family Foundation. The key difference is that countries like Japan, Norway and Australia provide universal healthcare to their citizens at a fraction of the cost.

    “If you do believe in insurance against the risk of very large medical bills, the advantage of the single payer system is number one. It can be much more efficiently run because there is a single set of procedures. They wouldn’t have to have the flexibility of covering insured and uninsured patients as well as a complicated billing systems,” Burtless said.

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