Tuesday, March 19, 2013

EDITORIAL >> Obamacare in March

The critical issue of the 2013 session of the Arkansas legislature, believe it or not, is not abortion, birth control, guns, tattoos or voter ID cards but the federal offer to insure medical care for some 250,000 low-income workers, 4,000 of them or more in our own community. That issue seems finally coming to a resolution, and we’re happy to report—well, good news and bad news.

The good news? It is looking more and more conceivable that the legislature—the necessary three-fourths of the members of both houses—will approve the expansion of Medicaid starting Jan. 1 to cover the neediest Arkansans who do not now have access to insurance, which sometimes means no access to medical attention when they need it. Only a month ago, that was extremely unlikely because all Republicans, who dominate both houses, have fiercely opposed the federal Affordable Care Act of 2010 and every aspect of it, including the Medicaid expansion.

The state Department of Human Services reported Monday that, despite earlier fears, Medicaid expansion through private insurance might not cost Arkansas more because medicine is a lot less expensive here than in many other states.

If other states demand and get the same arrangement, it will run into many billions of dollars more a year than the straight Medicaid deal for the states in the Affordable Care Act (in the vernacular, that’s “Obamacare”). No one knows how much — almost certainly more than $100 million a year if other states follow the Arkansas plan as costs are higher elsewhere.

A few Republican leaders of the state Senate and House of Representatives cooked up the new arrangement, which will have the federal government (and after 2017 the state government as well) buy private insurance policies for the 250,000 rather than have them treated under the Medicaid program.

We think it is still good news because, even at a higher tab, all of us, not merely the people who will get health coverage for the first time, will be better off when everyone is insured and has equal access to care and medicine. By any measure, Arkansans are on average among the unhealthiest people in the country. If you measure everything by economic principles, you can figure that it will mean increased productivity.

Hospitals, doctors and other health providers have clamored for the legislature to approve the Medicaid expansion. If Medicaid expansion fails, community hospitals will be in deep trouble and the regional medical centers will have to find new sources of financial support because reimbursement rates for Medicare and Medicaid are set to be reduced in 2014.

Businesses that provide insurance for their workers and many of the self-insured support the expansion because it will end the massive cost shifting of charitable care to the premiums of the insured.

If you are not keeping score on the politics, you need some background. The Affordable Care Act has a hundred moving parts but the three big features insure people who aren’t insured now: (1) a mandate for insurance companies to issue policies to people with preexisting conditions or who are denied coverage for some other reason at the same rates, (2) a mandate that large employers and individuals who are self-employed or work for small employers buy coverage from a private insurance company through a market called an exchange, with the federal government helping pay the premiums for families earning between 138 and 400 percent of the federal poverty line, and (3) expansion of Medicaid for people below 138 percent of poverty, who are presumed to be too poor to afford any part of an insurance premium.

The U.S. Supreme Court ruled that states, which are partners with Uncle Sam on Medicaid, could refuse to participate in the Medicaid expansion. The federal government pays 100 percent of the coverage until 2017, when the states begin to pick up a small part of the tab. In 2020 and afterward, Arkansas would pick up 10 percent of the expanded costs and the federal government 90 percent. Even after 2020, Arkansas would be getting such a huge infusion of money into its economy and would be shifting so much of the current Medicaid costs to Washington that it will be a fiscal bonanza for the state.

But Republicans who had denounced Obama-care as an unmitigated evil could not be seen as going along with any part of it. So several GOP leaders said, hey, what about removing all those 250,000 low-income workers from the Medicaid rolls and having them buy insurance policies on the exchange like people who earn up to 400 percent of the poverty line? The federal government would have to pick up the full cost of the premiums, which are estimated to be as high as 50 percent more than the cost of Medicaid coverage in many parts of the country if not in Arkansas, but it would be a private insurance program and not so much a government program.

Gov. Beebe took the idea to Washington, and Kathleen Sibelius, the secretary of human services, said sure, be our guest. So that is the proposition that apparently will go to the legislature. It will have to enact an appropriation to spend the billions in federal money that will flow through the state treasury and then out to the insurance companies. Under a bizarre constitutional amendment adopted in 1934, the appropriation will require three fourths of the each house, a very high hurdle.

The insurance industry is thrilled. It means billions in new profits from Arkansas. It’s a good deal for the doctors and hospitals because insurance companies pay them much more for a medical procedure than Medicaid or Medicare does. And you can argue that it is a pretty good deal for the poor because more doctors will be willing to treat them if they are going to be paid far more for an office visit or a procedure.