As "fiscal cliff" looms, health reform questions linger
Washington lawmakers this month are squarely focused on deficit reduction as they attempt to scramble off the so-called "fiscal cliff." All the while, however, the government is proceeding with the costly and ambitious rollout of the Affordable Care Act.
Key components of President Obama's health care law won't go into effect for about another year, but federal and state lawmakers are obligated to start building up those health care systems now. Many Republicans, however, argue the Obama administration hasn't said with certainty what the programs will ultimately cost or how they'll be governed. Democrats largely chalk up the complaints to the latest chapter in Republican-led obstruction against the Affordable Care Act, pointing to Democratic-led states that are making progress implementing the law.
- Obama, Boehner meet on "fiscal cliff"
- Pelosi on raising age for Medicare: "Don't go there"
- Complete "fiscal cliff" coverage
The "fiscal cliff," meanwhile -- the series of tax hikes and deep spending cuts set to kick in next year -- has cast a shadow over the entire health care debate. While lawmakers spar over the details of large new health care systems, Congress could be forced in the coming weeks to make spending cuts and policy changes to programs like Medicaid.
At a congressional hearing Thursday on the subject of the health care law, Louisiana's secretary of the Health and Hospitals Department Bruce Greenstein told Congress it felt as if they were operating in a "parallel universe."
"It feels somewhat awkward to be here testifying on the implementation of one of the largest expansions of entitlement programs in nearly 50 years," he said, "at the same time as ongoing discussions about federal spending reductions to avert the 'fiscal cliff' and raising the debt ceiling take place."
In spite of those concerns, states face one deadline today: Deciding whether or not they will establish and operate their own health care exchange system -- a state-based online marketplace where consumers should be able to compare health insurance plans and purchase one. If they don't want to build or operate their own exchanges, they can hand the responsibility to the federal government or enter into a state-federal partnership.
At the same time, state leaders are deciding whether to expand Medicaid, the joint federal-state program currently open to disabled and certain low-income people. The Affordable Care Act calls for states to open up Medicaid to anyone below 138 percent of the poverty line -- the Supreme Court, however, ruled over the summer that the Medicaid expansion shouldn't be mandatory. There's no deadline for states to say whether or not they will expand Medicaid.
Through these two components -- the exchanges and the Medicaid expansion -- roughly 36 million people are predicted to obtain health insurance by 2022.
Building exchanges
Most states have already declared their intentions when it comes to building an exchange: 19 states (mostly led by Democrats) have said they will build their own exchange. The Health and Human Services (HHS) Department this week conditionally approved the exchange blueprints submitted by six states: Colorado, Connecticut, Massachusetts, Maryland, Oregon and Washington. Those states are all on track to meet all exchange deadlines, marking a "significant milestone in our collective progress," Marilyn Tavenner, acting administrator for the Centers for Medicare & Medicaid Services, said this week.
Six states have said they'll enter into a state-federal partnership. Twenty-one states, meanwhile, have said they'll let the federal government run their exchanges. While it may seem counter to GOP small-government values, 18 of the states ceding power to the federal government are Republican-led.
"I'm asking a bunch of questions about how much this is going to cost and everything else, and they won't answer my questions," New Jersey's Republican Gov. Chris Christie said last week, explaining his decision to reject the state-based exchange system. HHS Secretary Kathleen Sebelius, he said, "doesn't tell us how much it's going to cost or how much control we're really going to have."
HHS twice pushed back the deadline for states to decide whether to build their own exchange, and they have since published several proposed rules giving states more clarity as to how build and run the exchanges. Federal regulators have, since the health law was passed, held hundreds of hours' worth of webinars, teleconferences and in-person meetings with state lawmakers to discuss the exchanges. And just this week, HHS published a list of FAQs to answer more questions from the states.
"States that want to move forward are moving forward," Gary Cohen, director of the Center for Consumer Information and Insurance Oversight, told Congress in yesterday's hearing. He pointed out that while states must decide on their own how to finance state-based exchanges once they're up and running, the federal government has handed out $2.1 billion in grants to help states build those exchanges.
Joshua Sharfstein, Maryland's secretary of health & mental hygiene, told Congress he's had "terrific interaction" and "regular consultation" with Obama administration officials since his state decided to build its own exchange. The assistance Maryland has received from federal agencies, he said, has "allowed us to customize implementation."
Still, Republican leaders like Tennessee Gov. Bill Haslam say the federal government's guidance has done little to ease their concerns.
"Since the presidential election, we've received 800-plus pages of draft rules from the federal government, some of which actually limit state decisions about running an exchange more than we expected," Haslam said in statement this week announcing his state will not set up its own exchange. "The Obama administration has set an aggressive timeline to implement exchanges, while there is still a lot of uncertainty about how the process will actually work. What has concerned me more and more is that they seem to be making this up as they go."
A promise for Medicaid funding
The partisan divide is even more evident in the decision over whether to expand Medicaid. Nine states, all led by Republican governors, have said they will not expand Medicaid, even though the federal government has promised to cover 100 percent of the costs for the first two years. Starting in 2017, the states start chipping in, but they will never contribute more than 10 percent of the cost. The deal is considered so good, that after the Supreme Court made the expansion optional, several health care experts said there was no way any state would turn it down.
Leaders from Republican-led states insist their concerns are legitimate: "10 percent of a huge number is still a very big number," Gary Alexander, Pennsylvania's secretary of the Public Welfare Department, said during yesterday's congressional hearing. Furthermore, Alexander added, "the magnitude of the ongoing federal deficits shakes our confidence the federal government will be able to fulfill its end of the bargain."
- Health care law surprise: $63 per-person fee for three years
- Governors ask Obama for flexibility on Medicaid
Lately, the "fiscal cliff" negotiations even have Democrats worried about federal Medicaid funding. Delaware Gov. Jack Markell, chairman of the National Governors Association, said he and other governors this month spoke with the president "about the potential unintended consequences [of the "fiscal cliff"] as it relates to Medicaid."
"Some of us have made the decision to expand Medicaid," he said. "In our case we made that decision because of the underlying economics... the fact that there's a higher federal reimbursement for the population we're already serving. If that were changed we would have to revisit that decision."
Meanwhile, a group of Democrats this week held a news conference to declare that they wouldn't accept any cuts to Medicaid as part of the "fiscal cliff" negotiations. Medicaid, Sen. Jay Rockefeller, D-W.V., said, is about "giving people some shot at life" and too important to be on the chopping block. The senator later spoke with White House chief of staff Jack Lew and Treasury Secretary Timothy Geithner to lay out his position.
"There's nothing inside of me, after 51 years in public service... that makes me feel obligated to vote for a deal which satisfies the hard-to-get people in the House," Rockefeller said. "I feel no obligation to do that because of something called the 'fiscal cliff.' I feel an obligation to my people and to do what's right."
Ironically, the Supreme Court's decision to make the Medicaid expansion optional may have given the White House more reason to take Medicaid cuts off the "fiscal cliff" negotiating table. Last year -- when it was presumed states would be forced to expand the program -- the Obama administration supported the idea of reducing federal Medicaid spending, but HHS said in its FAQ document this week that it no longer supports that idea.
In a press briefing Tuesday, White House spokesman Jay Carney explained the change of heart this way: "There have been some changes in the world that affect some of the proposals here, including the Supreme Court's decision. And so some -- a very small percentage of the provisions in here, the proposals in here that affect Medicaid, we would no longer put forward."
In other words, the White House must support stronger Medicaid funding so that states have the incentive to expand the program.
If the nine states that are opting out of the Medicaid expansion stick with their decision -- and if more states were to join them -- it could have devastating consequences for the overall success of the Affordable Care Act. Some of those nine states -- specifically Texas, Georgia, Louisiana and South Carolina -- have some of the nation's highest rates of residents without health insurance, meaning the Medicaid expansion could have a significant impact in those places.
Democrats say they're confident the states will come around, pointing to research showing that some states could even see net budget savings by adopting the Medicaid expansion. At Thursday's hearing, Rep. John Dingell, D-Mich., said lawmakers should look past their accounting books when considering the worth of the program.
"We've got a lot of people in this country who can look and who can see the cost of everything, but they can't see the value of anything," Dingell said. "The value of what we're trying to do here is to see to it that everybody has health care, to see to it that the health care of this country is affordable and available to all of our people, to see to it that the people of this country have a system which makes available to the ordinary citizen the right of health care... I'm hopeful we'll look at this as an investment in the future of the country."
