Washington Watch: Health reform rolls on post election
Health reform rolls on post election
By Adam Sonfield Senior Public Policy Associate Guttmacher Institute Washington, DC
One of the clearest outcomes of the 2012 election is that the Affordable Care Act (ACA), better known as Obamacare, has survived the last major threat to its existence. By November 2014’s mid-term elections, all of the major components of the ACA should be in place, and tens of millions of Americans should be benefiting from new insurance options and protections, all of which would make the law far more difficult for policymakers to dismantle.
Yet, in part because so many decisions were put on hold preceding this election, the timetable for implementing the ACA is increasingly short. Numerous federal regulations are expected over the next year. Indeed, several are under review by the Office of Management and Budget at press time. States face multiple deadlines as well.
For example, the federal and state governments have considerable work ahead of them to establish the health insurance exchanges that must be in place by January 2014 and to set crucial standards for benefits, provider networks, and many other details for the health plans that will be sold through those marketplaces to individuals, families, and small businesses. States have been struggling with even the most basic decision — whether to establish an exchange itself, partner with other states or the federal government, or default to a federally run exchange — and the Department of Health and Human Services (HHS) extended several deadlines for that decision just days after the election.1
Similarly, deadlines are imminent for the ACA’s requirement that most private health plans cover the full range of contraceptive methods and services for women, along with numerous other key preventive care services, without out-of-pocket costs for patients. Because most private plans renew at the beginning of each calendar year, the contraceptive coverage mandate will start affecting tens of millions of women’s plans in January 2013. Insurers have been provided with little guidance about how far they can go in using formularies and other cost-control mechanisms. The Obama administration also has promised new regulations by August 2013 to detail the “accommodation” announced in February 2012 that will allow some religiously affiliated employers to avoid paying for or talking about contraceptive coverage, while still ensuring seamless coverage for their employees.2
Big decisions ahead
Perhaps the most critical questions for family planning and other reproductive health services are tied to Medicaid. The authors of the ACA envisioned an expanded role for Medicaid as a health insurance program available to almost all Americans with an income below 138% of the federal poverty level, which is roughly $26,350 in 2012.3 That expansion would account for more than half of the 30 million Americans who would gain insurance under the law4, including coverage for family planning services and supplies, maternity care, sexually transmitted infection testing and treatment, and cervical cancer screening and vaccination.
The Supreme Court’s June 2012 decision, however, effectively converted this Medicaid expansion into a state option. Quirks in the ACA mean that unless the statute is amended, most of the residents in a state that opts out who would have been eligible for Medicaid also would be excluded from the subsidies the ACA provides to help defray the cost of private coverage in the exchanges. The Urban Institute projects that 11.5 million uninsured adults, all of them with incomes below the poverty line, would end up in this “donut hole” without any access to affordable insurance coverage.5
There are numerous incentives for states to opt into the expansion, from improving the health of millions of their most vulnerable citizens to supporting cash-strapped hospitals to drawing billions of federal dollars into the state. Indeed, the federal government will pay all of the cost of the expansion for the first three years, then phasing down to 90% by 2020, which is still a far higher rate than for Medicaid traditionally. Yet, conservative politics and perceived fiscal constraints have led policymakers in several states to declare they will not expand Medicaid or that they intend to use their leverage to negotiate new flexibility for shaping their state’s Medicaid program.
The political calculus at the state level might have changed post-election, but it might take years for the situation to be fully resolved. DHHS has not yet provided clarity about states’ options, and 2014 is not a hard deadline for states to opt in. Under past optional expansions to Medicaid, every state ended up participating, but many delayed that decision for a few years. These decisions could be complicated further if Medicaid is dragged into negotiations, which are just beginning as of this writing, to make a grand bargain on the budget and avoid the so-called fiscal cliff. Medicaid is one of the few key programs that was excluded from the automatic cuts (“sequestration”) established in the 2011 budget deal. However, the program’s size makes it a perennial target, and there are no guarantees it will be protected going forward.
References
- Galewitz P. Obama administration extends deadline for state exchanges. Kaiser Health News 2012. Accessed at http://bit.ly/WMCk3r.
- Department of the Treasury, Department of Labor, and Department of Health and Human Services. Certain preventive services under the Affordable Care Act. Fed Reg 2012; 77(55):16,501-16,508.
- Department of Health and Human Services. Annual update of the HHS poverty guidelines. Fed Reg 2012; 77(17):4,034-4,035.
- Congressional Budget Office. Updated Estimates for the Insurance Coverage Provisions of the Affordable Care Act. Washington, DC: Congressional Budget Office, 2012. Accessed at http://1.usa.gov/ApJZDu.
- Kenney GM, Dubay L, Zuckerman S, et al. Opting Out of the Medicaid Expansion under the ACA: How Many Uninsured Adults Would not Be Eligible for Medicaid? Washington, DC: Urban Institute, 2012. Accessed at: http://bit.ly/MZNoR2.
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