San Francisco Chronicle, by Victoria Colliver –
November 12, 2012:
President Obama’s re-election solidified the future of national health care, and now it’s up to the states to carry it out.
They have to work quickly.
By Friday, all 50 states plus the District of Columbia must let the Obama administration know whether they plan to set up their own insurance exchanges, a key element of the Affordable Care Act, known as Obamacare, or let the federal government do it for them.
They have until Dec. 14 to submit detailed blueprints on how they plan to create their exchanges, the virtual marketplaces where an estimated 12 million people will be able to get health coverage starting in 2014.
These exchanges, online portals run by the states or the federal government, will be the primary connection most people who are seeking coverage will have with the law. That’s where individuals, small employers and ultimately others will go to find a plan and figure out whether they will be eligible for federal subsidies to help them pay for their coverage.
The exchanges must be ready to start enrolling people by Oct. 1, 2013, in time for coverage to begin Jan. 1, 2014. Between now and then, the to-do list is long.
Many states lost time waiting for the U.S. Supreme Court decision in June upholding the law, and then for the outcome of the presidential election, as Republican nominee Mitt Romney had promised to try to repeal much of the Affordable Care Act.
“With the election over, it’s really like the start gun went off,” said Peter Harbage, president of Harbage Consulting, who has advised Democratic and Republican leaders at federal, state and local levels on health policy issues. “The election removed a really significant hurdle – the uncertainty of whether or not we’re moving forward.”
Millions to be insured
More than 30 million uninsured people in the United States are expected to gain health coverage under the law.
The poorest will be able to receive coverage when Medicaid is expanded to cover people who aren’t now eligible for the federal-state program for the indigent. Others, including those who have pre-existing health conditions and are not covered under employer or group policies, will be able to buy coverage through the exchanges. Many will be eligible to use federal subsidies to buy their coverage.
California is ahead of most states in the planning because it acted immediately after the Affordable Care Act became law in 2010.
The Legislature quickly passed laws to establish the exchange – the first state in the nation to do so – and selected board members to get the work done.
The state’s exchange, recently named Covered California, has already received nearly $240 million in federal funds to create an online portal where people can shop for insurance. On Thursday, the exchange board expects to submit an application for additional funds.
Already, more than 30 insurance companies have expressed interest is offering their plans through the exchange, where about 1.5 million Californians are expected to get their coverage by the end of the program’s first full year in operation.
Gov. Jerry Brown plans to call a special session of the Legislature in December to focus on how to expand Medi-Cal, the state’s Medicaid program, and work out details of the benefits to be offered.
“We truly have been moving full steam ahead,” said Peter Lee, executive director of Covered California. “There has not been the belief we have the luxury of doing anything but working to implement the biggest expansion of health care since Medicare.”
Anthony Wright, executive director of the advocacy group Health Access California, said the state needed the jump start.
“We have a much, much bigger population and scale of problem than virtually any other state,” Wright said. “Scale brings complexity. It’s not just the number of people; it’s also the diversity of people and the diversity of languages.”
But California is clearly an outlier. It’s one of just 13 states, plus the District of Columbia, that have told the federal government they plan to set up their own exchanges. Most other states have been taking a wait-and-see approach, but after last week’s election, they will now be pushed to make a decision.
Public opinion about the Affordable Care Act has been mixed, mostly along party lines. But polls have also shown broader support for provisions of the law already in place, such as extending dependent coverage to adult children up to age 26.
The political divisions have also played out along state lines.
The health law originally required states to expand their Medicaid program as a way to cover more people. But when the Supreme Court upheld the bulk of the Affordable Care Act in June, it said states could opt out of expanding Medicaid.
So far, a handful of Republican governors – including those in Florida, Texas and Mississippi – have said they will not expand their programs.
To ease the financial pain, the federal government will pick up 100 percent of the costs to states through 2016, after which the federal share will gradually decline. That amounts to more than $930 billion in total over the next decade.
“A lot of states that were waiting to see what happened in the elections are ultimately going to come to the conclusion it’s hard to turn down 100 percent money for a Medicaid expansion,” said Wade Horn, who advises Deloitte Consulting’s clients on health and human services issues.
Not a settled issue
Some opponents of the law, like Sally Pipes, chief executive officer of the free-market Pacific Research Institute in San Francisco, still don’t believe it’s inevitable the Affordable Care Act will take full effect.
Although the law survived the Supreme Court and the election, Pipes said she expects continued legal challenges, particularly over a provision to provide federal subsidies to help people with incomes of up to 400 percent of the federal poverty level – or more than $90,000 a year for a family of four – pay for insurance premiums in the exchanges. She said the Republican-led House could also create hurdles.
“It’s another big expansion for a country facing a tremendous budget deficit,” Pipes said. “We can’t just throw in the towel. We have to look at the costs.”
Alan Weil, executive director of the National Academy of State Health Policy, disagreed. “The primary hurdles were the court and the election, and those hurdles have been overcome,” he said. “The primary risk at this point is operation – just getting the work done.”
Others, including Deloitte Consulting’s Horn, say the law will survive those obstacles as well.
“At the end of the day, we are a nation of laws,” he said. “And most people will say they may not agree with every aspect of the law, but it is the law.”