Biggest Threat to Health Care Law: States That Want to Abandon Medicaid Expansion

(photo anolobb)

Democrats may be trying to outflank Republicans on health care, but how will the Republicans counteract this? It’s clear they will attempt to take apart the law piece by piece if a full repeal fails as expected. But the six ideas in this Kaiser Health News piece do not include the biggest threat to the coverage expansions in the law, the largely state-based effort to circumvent Medicaid rules:

Republican efforts to repeal or limit the reach of the new health-care law took a new direction last week when Arizona lawmakers approved a novel and controversial attempt to cut Medicaid for 280,000 of the state’s poor.

The bill, requested and signed by Gov. Jan Brewer (R), empowers her to make a formal request, most likely this week, for a federal waiver to avoid complying with provisions of the law that prohibit states from tightening their eligibility requirements for Medicaid.

Twenty-nine Republican governors, including Brewer, have signed a letter calling on President Obama and congressional leaders to remove the provision from the law.

But Arizona is the first state to, in effect, play chicken with the Obama administration by directly requesting a reprieve and daring Health and Human Services Secretary Kathleen Sebelius to refuse.

I don’t expect HHS to comply with this request, at least not now. But it sets up a path for future HHS Departments to dispense with expanded Medicaid coverage. And this comprises a major portion of total coverage expansions in the bill – nearly half, according to the New England Journal of Medicine. Without Medicaid expansion, the coverage provisions in the health care law are relatively weak. If the conservatives fighting the individual mandate in the courts succeed, millions of Americans will still get their coverage subsidies and purchase health insurance on the exchanges. If Medicaid expansion gets phased out, even with subsidies the low-income Americans served by Medicaid will find private coverage unaffordable. They will have no recourse at all, and the ranks of the uninsured will swell.

By the way, the notion that states can’t afford this Medicaid expansion reflects an ignorance about the law. The federal government covers pretty much all of the costs of expansion. Arizona, like other states, doesn’t want to fulfill their current obligations. That’s what’s at issue here.

Arizona will not be the last state to seek to fill a budget shortfall by going after Medicaid. The Obama Administration is likely to fight this – although they have shown an affinity for handing out waivers in the recent past – but some future Romney or Palin Administration will enthusiastically support it. And that’s enough to cripple the coverage dreams of the health care law all by itself.

Biggest Threat to Health Care Law Comes from States Who Want to Abandon Medicaid Coverage Expansion

Democrats may be trying to outflank Republicans on health care, but how will the Republicans counteract this? It’s clear they will attempt to take apart the law piece by piece if a full repeal fails as expected. But the six ideas in this Kaiser Health News piece do not include the biggest threat to the coverage expansions in the law, the largely state-based effort to circumvent Medicaid rules:

Republican efforts to repeal or limit the reach of the new health-care law took a new direction last week when Arizona lawmakers approved a novel and controversial attempt to cut Medicaid for 280,000 of the state’s poor.

The bill, requested and signed by Gov. Jan Brewer (R), empowers her to make a formal request, most likely this week, for a federal waiver to avoid complying with provisions of the law that prohibit states from tightening their eligibility requirements for Medicaid.

Twenty-nine Republican governors, including Brewer, have signed a letter calling on President Obama and congressional leaders to remove the provision from the law.

But Arizona is the first state to, in effect, play chicken with the Obama administration by directly requesting a reprieve and daring Health and Human Services Secretary Kathleen Sebelius to refuse.

I don’t expect HHS to comply with this request, at least not now. But it sets up a path for future HHS Departments to dispense with expanded Medicaid coverage. And this comprises a major portion of total coverage expansions in the bill – nearly half, according to the New England Journal of Medicine. Without Medicaid expansion, the coverage provisions in the health care law are relatively weak. If the conservatives fighting the individual mandate in the courts succeed, millions of Americans will still get their coverage subsidies and purchase health insurance on the exchanges. If Medicaid expansion gets phased out, even with subsidies the low-income Americans served by Medicaid will find private coverage unaffordable. They will have no recourse at all, and the ranks of the uninsured will swell.

By the way, the notion that states can’t afford this Medicaid expansion reflects an ignorance about the law. The federal government covers pretty much all of the costs of expansion. Arizona, like other states, doesn’t want to fulfill their current obligations. That’s what’s at issue here.

Arizona will not be the last state to seek to fill a budget shortfall by going after Medicaid. The Obama Administration is likely to fight this – although they have shown an affinity for handing out waivers in the recent past – but some future Romney or Palin Administration will enthusiastically support it. And that’s enough to cripple the coverage dreams of the health care law all by itself.