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Poor, Uninsured and Ignored: Potential Beneficiaries of the Alleged 'Economic Dragooning'

JURIST Guest Columnist Srishti Miglani, St. Louis University School of Law Class of 2015, discusses the impact of Medicare Expansion...

The uninsured cried and the states rejoiced as the "gun to the head" was removed by the US Supreme Court when it held that Congress could not penalize the states by removing all funding for the existing Medicaid programs if the states did not participate in the Medicaid Expansion (Expansion) provision of the Patient Protection and Affordable Care Act (PPACA) [PDF]. By clipping the wings of the Expansion provision, the Court left the fate of those Americans, who are too poor to afford health insurance but not poor enough to meet the Medicaid eligibility requirements, to the 50 states.

The expansion provision of the PPACA [PDF] has two main requirements: (1) the states have to expand their Medicaid programs to cover all individuals who are under the age of 65 and earn incomes that fall below 133 percent of the federal poverty level (up to 138 percent of the federal poverty level) and (2) the states have to provide the new Medicaid beneficiaries an "essential health benefits package," which will meet the obligations imposed under the individual mandate.

The controversial section in the provision was Section 1396c [PDF], which gave the Secretary of Health and Human Services (HHS) the power to take away all federal Medicaid funds from a state if the state chose not to carry out the PPACA-required Expansion. In National Federation of Independent Business v. Sebelius [PDF], the US Supreme Court saw this penalty as a form of "coercion," leaving the states with no choice but to comply, and held it to be unconstitutional.

Despite the fact that Justice Scalia would have struck down the entire PPACA, he correctly pointed out the crucial role Expansion would play in the lives of 15 million uninsured Americans when he said that the goal of the Expansion, to "provide at least a specified minimum level of coverage for all Americans," was dependent on the participation of all the states and "[i]f any State—not to mention all of the 26 States that brought this suit—chose to decline the federal offer, there would be a gaping hole in the ACA's coverage." He noted that there was no other provision in the PPACA that would provide insurance to these Americans and prevent them from "being left out in the cold."

As of October 22, 2013, 26 states have decided to expand their Medicaid programs and North Carolina is starting to lean towards Expansion. Besides the noble goal of expanding access to health care to millions of uninsured Americans, there are several other reasons why states have chosen to expand Medicaid or should if they have not done so yet.

First, the federal government will pick up the tab for the newly eligible adults enrolling in the state Medicaid programs from 2014 until 2016, followed by 95 percent federal assistance in 2017, 94 percent in 2018, 93 percent in 2019 and 90 percent in 2020 and subsequent years. With the federal government providing a huge incentive for the states to provide health insurance to their poorest segments, many states have joined the bandwagon of the PPACA's goal of reducing the number of uninsured.

Secondly, this influx of money will boost many states' economies by promoting job and income growth. This boost will be further magnified by the money states will save by reducing the amount of uncompensated care. Michigan [PDF] predicts savings of $320 million in uncompensated care costs and $206 million in General Fund costs in 2014, and these savings will continue to rise as more Michigan residents gain health insurance coverage pursuant to the Expansion.

Third, Expansion will help the safety net of rural hospitals, physicians and urban centers that serve the low-income segments while decreasing cost-shifting. The problem of cost shifting that plagues our health care system starts with emergency room usage by the uninsured, which results in hospitals shifting the cost of that care to the insurance-bearing users, which results in higher premiums borne by taxpayers and businesses. In states like New Mexico [PDF], where state and local government pay for 30 percent of the cost of uncompensated care, Expansion will help ease this monetary burden by taking some of the uncompensated care out of the equation. In addition, with the decreasing federal disproportionate share hospital (DSH) payments, the extra strain on the hospitals serving an inordinate number of low-income Americans will be eased in the states expanding Medicaid.

Lastly, states like North Carolina are contemplating Expansion because of the presumptive eligibility options available to hospitals and other entities under the PPACA. Presumptive eligibility has been used by many states since the 1980s, but the PPACA gives the states the option to allow Medicaid-participating hospitals to conduct presumptive eligibility determinations, even if the state is not using this method for any other populations or settings in the state. Since hospitals will bill the state for caring for patients from the time of the presumptive eligibility determination to the final assessment, there is a fear that in the case of a Medicaid-ineligible person, the state would have to incur the cost of care during that time period. This flawed fear is, for now, driving some states to lean towards Expansion. Whatever the ultimate reason might be, reducing the number of uninsured is every state's goal and Expansion is the means by which states can realistically achieve that goal.

Every great idea has its opponents and so does the PPACA's Expansion provision. The opponents of Expansion argue, among other things, that there is no guarantee that Congress will be able to keep its promise and pay for the newly eligible beneficiaries, thereby leaving the states to bear the costs which they cannot even accurately predict. The Republican ideology and the general attitude of the Red states towards the PPACA—evident by the stalemate that caused the federal government shutdown, and ironically cost billions of dollars—have added to the unsubstantiated fears. The states are also afraid that the huge surge in Medicaid enrollment will overburden their budgets despite the federal aid. Only 61.7 percent of the people currently eligible for Medicaid have enrolled, which leaves the other 38.3 percent either not wanting to or unable to enroll. Additionally, states that have the largest numbers of people who will be eligible for Medicaid if the states chose to expand are the ones who traditionally have been the worse at "finding and keeping eligible adults enrolled in Medicaid," and it is even worse in states that require annual eligibility verification. Realistically, the states' fears of newly eligible adults coming "out of the woodwork" to overburden the states' Medicaid programs might be a little exaggerated.

The law does not exist in a vacuum. There exists a constant interplay between law, politics and policy. The law that made it mandatory for states to expand their Medicaid programs was struck down as unconstitutional. The political ideology that divides our nation has traditionally made it difficult for much-needed health care reform to occur and the same politics continues to voice its opposition towards Expansion. Medicaid expansion is a sound policy decision that should be adopted by the states. The indigent segments in many states that lack health insurance and therefore lack affordable health care are waiting to see if their states will put politics aside and start to care about matters of life and death. Let us hope that common sense, sound policy making and a unified goal of giving millions of Americans affordable access to health care will trump the anti-Expansion rhetoric.

Srishti Miglani is a staff member of St. Louis University Law Journal.

Suggested citation: Srishti Miglani, Poor, Uninsured and Ignored: Potential Beneficiaries of the Alleged 'Economic Dragooning', JURIST - Dateline, Nov. 7, 2013, http://jurist.org/dateline/2013/11/srishti-miglani-health-law.php.

This article was prepared for publication by Leigh Argentieri, a senior editor for JURIST's student commentary service. Please direct any questions or comments to her at
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