Volumne 12, Issue No. 1
February 4, 2014

What’s Next for the States and the Affordable Care Act?

It was expected the long anticipated 5-4 Supreme Court ruling regarding the individual mandate for the Affordable Care Act (ACA) would put to rest many uncertainties, yet it has clearly left many states in a quandary as to what to do next. While states may have been surprised the justices upheld the individual mandate, what may have been more astounding was related to Medicaid expansion. The law was written so that states would lose their existing Medicaid federal matching grants if they declined to comply with the federal requirement to expand Medicaid to all individuals at or below 133 percent poverty level. In exchange for compliance, the federal government would provide 100 percent of the extra funds a state would need to cover this larger population; this federal subsidy would gradually reduce to 90 percent by 2020. The federal share for the newly eligible population is much higher than for the current Medicaid population as the federal government currently picks up an average of 57 percent of Medicaid costs. Rather than strike down the law’s huge expansion of Medicaid, The justices ruled that it would not be unconstitutional for the states to refuse to participate in that expansion and that they would not lose federal funds by doing so. Experts suggest that states most likely to follow the Supreme Court’s ruling and opt out of the health care law’s Medicaid expansion are likely to be those with a larger population of uninsured and poor people. Opting out would result in states turning away huge sums of federal money, which could be difficult for most states to do. On the one hand, there’s a deep pot of federal money for states to expand their Medicaid programs. On the other, there’s the fear of getting even more saddled with bills from an increasingly expensive entitlement program.

Policy makers in both parties will face pressure from hospitals in their states to allow more people into Medicaid who otherwise would be uninsured. Hospitals end up absorbing some of the costs of care for uninsured people who can’t pay their bills. Even though Medicaid pays lower rates to hospitals than Medicare or private insurance, it’s better than trying to get payments from uninsured individuals facing high bills. Another unintended consequence of states opting out of this expansion could be an increase in costs for the federal government, because people whose income is between 100 and 138 percent of the poverty level could be eligible for subsidies in the new federal exchange markets if they have no other options for coverage.

As the Supreme Court debated major provisions of the law, 14 states plus the District of Columbia made progress on creation of state based insurance exchanges, another ACA requirement. The law gives states the option of creating their own model market place or letting the federal government do so. Full implementation is expected by 2014, at which time the insurance exchanges will provide people and small businesses with one-stop shops to find, compare and purchase affordable, high-quality health insurance. To date, 34 states and the District of Columbia have received approximately $850 million in Exchange Establishment Level One and Level Two cooperative agreements to fund their progress toward building exchanges. A recently issued Health & Human Services (HHS) announcement makes more funding available and provides further guidance to help states understand the full scope of activities that can be supported under the grants. Under the new announcement, states can apply for exchange establishment cooperative agreements through the end of 2014. These funds are available for states to use beyond 2014 as they continue to work on their exchanges. This ensures that states have the support and time necessary to build the best exchange for their residents.

HHS also reports they will conduct regional implementation forums in coming months to assist states and stakeholders on the work to be done in building exchanges, and to address their questions.  HHS will also engage with tribes, tribal governments, and tribal organizations on how exchanges can serve their populations. Visit here for more information on exchanges, including fact sheets.

It seems states have been given a great deal of flexibility and resources, but the work to be done remains daunting. So what can we all do? Stay informed; look at all sides of the debate and speak with your trusted health care providers. Hold your elected officials accountable. If your state is rejecting provisions of the current law, what specifics does your elected official/ candidate offer that will sustain the current consumer oriented provisions already in effect. Vote accordingly. At the state legislature, ask that scope of practice barriers be removed to ensure patients will have choice and access to needed care. There are many qualified advanced practice registered nurses (APRNs) as well as other practitioners ready to meet consumers’ health needs, but unfortunately continue to face restrictive state regulations. So what’s next may depend upon you as well as your state.  We’re in this together.

Janet Haebler, MSN, RN

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