Friday, January 25, 2013

EDITORIAL >> Dismang plan will cost more

Avoiding the appearance that they are collaborating in any way with President Obama and his despised health-insurance reforms is forcing a few Republicans into painful circus contortions. They may need a doctor.

Take our neighbor, state Sen. Jonathan Dismang (R-Searcy), who swore to fight Obamacare however he could. But there were few opportunities for people like Dismang once the U. S. Supreme Court ruled that the law was fully constitutional in all but one aspect. (The senator and fellow Republicans did succeed last year in stopping the state of Arkansas from overseeing the insurance market for Arkansas policy buyers, which means they will have to shop for insurance on a national exchange supervised largely by the federal government. If an Arkansas policy holder has a grievance against his insurance provider next year, he will have to take it up with bureaucrats in Washington, not a state office run by the governor.)

But the Supreme Court gave the Republicans one opening. The final part of the Obamacare package to insure all Americans shifts the poorest working adults—those whose family incomes are below 138 percent of the federal poverty line (about $15,000 a year for an individual)—into Medicaid, the joint federal-state program that pays for medical care for children, the disabled, the elderly in nursing homes and a few other groups that cannot afford medical care or insurance. Their incomes are so low they cannot afford insurance premiums at any price.

The Supreme Court said Congress could not require states to participate in Medicaid, so any state could opt not to participate in the program for poor adults, leaving everyone insured but those. From 215,000 to 250,000 Arkansans would be left out.

Republicans leaped at the chance en masse last summer, vowing to keep their states and the working poor out of that program. But that soon became logically nonsensical, no matter how much you hated Barack Obama. For three years, from 2014 until 2017, the federal government will pay 100 percent of the medical costs of the working poor, minus small copays and deductibles the states might charge the patient who gets care. Billions of dollars will flow into the state, pulsing through the economy and lifting state tax receipts by millions of dollars a year. And, of course, low-income workers will have better health and security, and hospitals — including those in Jacksonville and Searcy — and other providers will be saved all the charitable care they now provide and avoid passing those costs on to people who are already insured.

If they participate, states will begin shouldering a small part of government costs in 2017. After 2020, the state will bear 10 percent, Uncle Sam 90 percent. So Republicans—or at least many of them—leaped at that opening. Even if it’s only 10 percent, the state budget cannot stand the extra Medicaid costs starting in 2020, they said, so it is better not to take Medicaid and to leave the 250,000 stranded without insurance.

But the state Human Services Department, the University of Arkansas for Medical Sciences and the Rand Corporation in separate studies all concluded that the state budget would be better served by taking Medicaid and eventually paying 10 percent than by not taking it. Obamacare shifts part of the state’s costs under the children’s health insurance program to Washington, and the state will lose that huge saving if it foregoes the Medicaid expansion for adults.

What to do? Arkansas Republican leaders early this month came up with another possibility. Maybe we ought to allow the government to cover those working poor, or at least the poorest of them, those under the poverty line, but not those up to 138 percent of the poverty line. That group—the not quite desperately poor—could buy private insurance on the Obamacare market and get federal help paying for it. That way, Republicans could say they blocked a part of Obamacare and didn’t do too much harm.

But the federal government said the obvious. The law doesn’t allow states to write their own Medicaid programs. The Supreme Court said a state could take the Medicaid expansion or leave it.

Enter Sen. Dismang with another contortion. If the state rejects Medicaid or if it can somehow get the federal government to let it take Medicaid only for the desperately poor, he said, the state could pay the individual share of the private-insurance premiums on the Obamacare market for those between 100 and 138 percent of poverty while the federal government paid the rest.

Wait! Wasn’t the whole idea to avoid additional state costs, not enlarge them? Under Dismang’s notion, starting next January and forever thereafter, the state (that is, Arkansas taxpayers) would pay up to $300 a year in private premiums for those Arkansans who bought insurance (and more as premiums inevitably rise) plus the millions of dollars it would cost the state to administer the premium program. It should be mentioned that Dismang’s plan would raise overall health-care costs because private insurers pay more to doctors, hospitals, pharmacists and other providers than does Medicaid even while insurance companies take greater profits. Dismang’s plan would make one group much happier: the insurance industry. It’s hard to imagine any other group, including taxpayers, being happier.

That seems also to include Jonathan Dismang. He was not sure he would support Medicaid even if his ideas were adopted.