- The rapid implementation schedule for state and federally-run health insurance exchanges;
- State government decision-making on expanding Medicaid programs;
- The fiscal cliff’s effect on the American healthcare system and the urgent need to rein in medical costs;
- A muddled verdict on voter preferences for Medicare reform; and
- The Patient Protection and Affordable Care Act’s (PPACA’s) remaining legal and legislative challenges.
- States must implement the exchanges in one of three ways:
- run their own state-based exchange,
- form a partnership with the federal government to operate an exchange, or
- allow the U.S. the Department of Health and Human Services (HHS) to operate a federally-facilitated exchange in the state.
- HHS originally required states to submit an "Exchange Blueprint" by November 16, 2012, outlining which insurance exchange option the state prefers. In a letter to state governors on November 9, 2012 and a follow up letter to the Republican Governors Association on November 15, HHS Secretary Sebelius extended this blueprint deadline to December 14, 2012.
- These insurance exchange deadlines have caused problems for many states – mostly Republican-controlled – that waited until the election to take action in hopes that Governor Romney would win and repeal PPACA. Post-election, many healthcare lobbyists are shifting their attention away from federal agencies and Capitol Hill to the 50 state legislatures responsible for building their health insurance exchanges. Kaiser Family Foundation’s interactive up-to-date map shows where states currently stand on health insurance exchanges.
- The Supreme Court’s ruling on PPACA established that states are no longer required to expand Medicaid coverage to those earning up to 133 percent of the federal poverty level (FPL). Of the 32 million who stood to gain health insurance coverage under PPACA, nearly 17 million – half – were supposed to be covered by the Medicaid expansion. With the expansion now optional, it is up to the states to decide who will be covered.
- Unlike with the insurance exchanges, HHS has abstained from setting a deadline for states to make their choice on the Medicaid expansion. States and the federal government have many conflicting incentives at stake in making decisions on the Medicaid expansion. The Advisory Board Company’s updated map shows where states currently stand on the Medicaid expansion.
The Fiscal Cliff’s Effect on Healthcare
The fiscal cliff, an automatic set of major tax and spending policy changes beginning January 1, 2013, applies considerable pressure on both political parties to make healthcare spending cuts as part of the deal to avoid "going over the cliff." President Obama and Speaker Boehner said they would work together on healthcare spending reform:
- On November 8, Speaker Boehner stated that the alternative to going over the Fiscal Cliff involves making "real changes to the financial structure of entitlement programs."
- The next day, President Obama stated: "I intend to work with both parties to do more, and that includes making reforms that will bring down the cost of health care, so we can strengthen programs like Medicaid and Medicare for the long haul."
- However, on November 21, Speaker Boehner published an op-ed declaring that Obamacare is unaffordable and "has to stay on the table as both parties discuss ways to solve our nation’s massive debt challenge."
Muddled Verdict on Voter Preferences for Medicare Reform
By preserving the current balance of power, the election – which brought Paul Ryan’s Premium Support Plan to the national spotlight – does not give a green light to either party on its Medicare reform proposals. Yet, barring interruption to PPACA’s implementation, Medicare will undergo significant changes under PPACA, including the following:
- New consumer health coverage protections;
- Increased preventive care benefits for Medicare recipients;
- The Independent Panel Advisory Board (IPAB), which will make Medicare spending reduction recommendations to Congress that do not directly affect beneficiaries; and
- $716 billion in reductions to Medicare’s future payments to insurers and providers, to be implemented over 2013 to 2022. The focus is on reducing Medicare Advantage payments to private insurers and on bringing down the projected growth of Medicare reimbursements to hospitals, insurance companies, and drug manufacturers.
Conclusion: PPACA Survives, with Legal Challenges
President Obama’s reelection and the sustained Democratic majority in the Senate guarantees PPACA’s survival, but opponents continue to press forward on making the following legal challenges:
- The federal insurance subsidies do not apply in states that abstain from running their own exchanges (and therefore, since the health law exempts people from the individual mandate to have insurance coverage if coverage is not affordable, and since insurance coverage would not be affordable for many people in the absence of subsidies, the individual mandate cannot apply to those people in such states).
- The individual and employer mandates violate the right to free exercise of religion, especially in the case of contraception requirements.
- The law is invalid because it originated in the Senate, whereas the Constitution requires tax legislation to come from the House.
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