Friday, November 13, 2015
KY Governor-Elect Bevin and Health Care Federalism Post-ACA
Matt Bevin will soon become Kentucky's Republican Governor, which has created consternation regarding his plans for discontinuing Kentucky's successful implementation of the Affordable Care Act (ACA). While on the campaign trail, Governor-Elect Bevin first promised to end the Medicaid expansion; then he promised to cap new Medicaid enrollment; and then he promised to reject "Obamacare" but keep Medicaid expansion on Kentucky's terms. Governor-Elect Bevin also promised to dismantle Kynect, widely considered a model state-run health insurance exchange. Each of these promises leads to a complex realm of statutory provisions, governance choices, and inter-governmental dynamics. Each also has real implications for the neediest in our health care system as well as the ongoing negotiations between the federal government and the states in a post-ACA, post-NFIB federalism world.
First, could Governor-elect Bevin completely end the Medicaid expansion in Kentucky? Yes, but not instantaneously. The Medicaid Act creates a right for any person who meets its eligibility requirements to be enrolled upon approval of her application. The Medicaid Act has mandatory eligibility categories and optional eligibility categories, and the federal government must match state funding by at least 50 cents on each Medicaid dollar. As enacted, the ACA built on this design by expanding eligibility to anyone under age 65 earning less than 133% of the federal poverty level, and the expansion was mandatory. States would have been required to enroll the newly eligible population and could not alter the expansion without a waiver from the Department of Health and Human Services (HHS). The ACA funded 100% of the cost for newly eligible beneficiaries until 2017, then decreases the match gradually to 90% over the next several years.
States that complied with the ACA submitted State Plan Amendments to HHS to expand eligibility; Kentucky was one of them. But, NFIB v. Sebelius made the ACA's Medicaid expansion unenforceable by HHS, or "optional." HHS issued guidance after NFIB explaining that states could opt-in to expansion at any time and that they could subsequently opt-out. Although HHS opined that post-expansion opt-out (my phrase) is consistent with NFIB, it has not clarified how such an opt-out would work. Because Governor Beshear expanded Medicaid by executive order, Governor-Elect Bevin would be able to reverse expansion at the state level with another executive order. But, Kentucky would also need to submit a State Plan Amendment to HHS for approval, which can take 2-3 months when non-controversial. The state would also need to determine whether the newly eligible beneficiaries (approximately 400,000 people) are eligible for Medicaid through another category of eligibility, such as pregnancy or disability. Some would qualify for tax credits to purchase insurance in the exchange, but many would not qualify for Medicaid or tax credits at that point. Beneficiaries have a right to appeal dis-enrollment, but for most that appeal will not lead anywhere. So, post-expansion opt-out would not occur immediately or without cost, but it is possible.
Second, could Bevin cap enrollment? No. States cannot limit enrollment of Medicaid beneficiaries under the Medicaid Act; they may only do so if they have a specific waiver granted by the Department of Health and Human Services (HHS). HHS has explained that capped enrollment will not be approved because it is inconsistent with the universal coverage goals of the ACA.
Third, could Kentucky amend Medicaid expansion like Indiana, which Bevin has admired in public remarks? A waiver from HHS is necessary to expand Medicaid differently than the ACA required. So far, such waivers have been granted to seven states, underlining states' empowerment after NFIB to negotiate a version of health care reform that Congress never envisioned. In addition to that vertical cooperative federalism, states are experiencing noticeable horizontal federalism, learning from one another what concessions can be won from HHS. Republican governors of waiver states have touted that they expanded Medicaid their way, spinning the waivers as a win for red state values. And, many of the concessions granted by HHS have reflected a more typically conservative agenda. For example, Arkansas, Michigan, Iowa, Indiana, Pennsylvania, New Hampshire, and Montana have negotiated compromises such as placing the newly eligible population in the exchanges with federal Medicaid dollars supporting their purchase of private plans ("premium assistance"); required premiums and co-payments, especially for people earning more than 100% of the federal poverty level; wellness requirements; limiting payment for non-emergency use of ambulances and imposing co-payments for ER use; private third-party administration; and other adjustments. Notably, HHS rejected work requirements, which reflect "able-bodied" rhetoric that is so politically prevalent. (In a forthcoming paper with Jessica Roberts, I debunk the myth of self-reliance in health care, which underlies the work linkage proposals.)
Some of these waiver concessions may improve insurance coverage; for example, a person who earns close to 133% of the federal poverty level is likely to "churn" between Medicaid coverage and private insurance coverage, and the premium assistance model may make that movement smoother and less likely to result in loss of coverage (time will tell). But, some concessions have harmful effects, such as enforceable premiums that drop coverage for anyone who does not pay, as studies have shown that cost sharing is a barrier to care for low-income Americans. Further, Indiana's waiver is arguably the most complex, raising questions as to why a complicated system should replace one that is relatively simple and working well (other than ideology). Bevin says it's economics, but a Deloitte study performed for Kentucky showed that is not true.
If one thing is clear from states' negotiations with HHS, the agency is strongly motivated by increasing enrollment and by universal coverage policy entrenchment. This could cut both ways for Kentucky, which would be in uncharted waters as a waiver-seeking state that could be the first post-expansion opt-out. Kentucky's Medicaid expansion covers nearly 10% of the state's population, and HHS surely would take a very hard look at any waiver application that makes the already-insured lose coverage. HHS would also be aware that timing is tricky, and Medicaid enrollment could disappear and then reappear for the newly eligible in Kentucky, leaving needy people with gaps in coverage (and thus gaps in care).
Finally, could Governor-Elect Bevin dismantle Kynect? Yes, a state-based exchange can be disbanded, but not immediately. The open enrollment for 2016 that is underway cannot be stopped, and HHS wants a year's notice before a state moves to the federally-run exchange. Dismantling Kynect will cost tens of millions of dollars according to current estimates. And, the state must ensure that privately insured people do not lose coverage in an exchange transition.
Kentucky has experienced the largest drop in uninsurance in the nation due to Governor Beshear's implementation of the ACA, and modifications enacted without due care could result in hundreds of thousands of people losing health care coverage. Change for the sake of change may be an interesting political experiment to some, but it has real world implications for the low income individuals relying on regulatory stability for their health insurance access.
November 13, 2015 in Affordable Care Act, CMS, Health Reform, HHS, Medicaid, Politics, PPACA, Spending, State Initiatives, States, Uninsured | Permalink | Comments (0)
Tuesday, June 23, 2015
Congress, too, is mystified by long-delayed Equal Access regs
Members of the House Committee on Energy and Commerce and the Senate Committee on Finance sent a letter today to Secretary Burwell, urging HHS to issue the Equal Access regulations that have been in limbo since 2011. This is an important and much-needed call for action in the wake of Armstrong v. Exceptional Child Center, which shut down private rights of action for Medicaid providers seeking fair reimbursement from states in federal courts. The letter explicitly recognizes the harm that the Court's recent decision will inflict on the Medicaid program, which I've written about on this blog (most recently here) in the context of both Armstrong and Douglas v. Independent Living Center.
Though the draft regulations were not perfect, and in fact would benefit from putting some real teeth into HHS's review of states' payment decisions on equal access to care for Medicaid beneficiaries, they would at least ensure that HHS is actively overseeing states' payment rate decisions. Currently, states are able to change rates with very little intervention from HHS, which often involves decreasing payment rates to balance state budgets. Now that the Court has tasked HHS with enforcing the equal access provision, rather than the providers who HHS admittedly relied on to raise flags about states' low payment rates, HHS must complete the draft regulations. Perhaps this direct plea from members of key committees will refocus HHS's attention on these important regulations.
June 23, 2015 in Affordable Care Act, End-of-Life Care, Health Care Reform, HHS, Medicaid, Payment, Politics, PPACA, Spending | Permalink | Comments (0)
Wednesday, April 1, 2015
"Very Real Consequences" for Medicaid and Beyond
Back in January, I commented on the oral arguments in Armstrong v. Exceptional Child Center, the Medicaid reimbursement case that the Supreme Court decided yesterday. I noted then that Justice Breyer seemed confused about Medicaid's operation; that Justice Kennedy appeared to be on the fence; and that the four dissenters from Douglas v. Independent Living Center appeared wedded their 2012 position that no private right of action is available under the Supremacy Clause. Sure enough, the Court eliminated private enforcement of the Medicaid Act's payment adequacy provision ("30(A)") against non-compliant states. This decision is a major victory for states, a questionable victory for the Obama Administration, and a potential defeat for access to care in the Medicaid program.
Justice Scalia authored the majority opinion (joined by Justices Thomas, Roberts, Alito, and Breyer), which began with an intentional description of Medicaid as a Spending Clause program. Justice Scalia noted that states agree to spend federal funds "in accordance with congressionally imposed conditions." The majority then effectively constructed a clear notice rule for the Supremacy Clause, indicating that the Supremacy Clause provides a "rule of construction" but does not "create a cause of action" unless Congress "permits the enforcement of its laws by private actors." Although purporting to empower Congress, the majority actually limited the reach of federal legislation by requiring Congress to explicitly confer private rights of action under federal laws. As a Brief by Former Administrators of HHS made clear (in Douglas and again in Armstrong), Congress and HHS rely on private actions to enforce the Medicaid Act, in part because the law has such a broad reach and the agency's staffing is so limited. Contrary to the majority's bizarre characterization of private enforcement of federal laws as limiting, in the Medicaid context, private enforcement is critical for implementing the purposes of 30(A), which was written to ensure equal access to medical care for Medicaid beneficiaries. 30(A) requires on-the-ground observation for assessing states' payment adequacy, which HHS cannot do without the assistance provided by privately initiated enforcement actions.
The majority then cited Chief Justice Roberts' dissent in Douglas to support its position that Congress deliberately excluded private enforcement from the Medicaid Act. This is simply not true. Congress did not "foreclose" or "exclude" private enforcement from the Medicaid Act, either in 1965 when Medicaid was enacted, or when 30(A) amended the Act. In fact, Congress debated language that would have prevented providers and beneficiaries from seeking relief in federal court when states violate the Medicaid Act, but Congress never has added such language to the Medicaid Act. Nevertheless, the majority concluded that the Secretary of HHS is solely responsible for enforcing 30(A) pursuant to her authority under 42 U.S.C. §1396c to withhold Medicaid funds from non-compliant states. The Secretary is reluctant to withhold funds in Medicaid because such an act would harm beneficiaries, but the majority did not engage this quandary, instead deeming 30(A) judicially unmanageable, even though lower federal courts have guided states toward adequate payment decisions for years. The majority also seems to be setting up HHS to fail; if the agency actually withheld Medicaid funding, the state might respond with a claim of coercion under NFIB v. Sebelius, thereby further undermining the program's operations. (Justices Scalia, Thomas, Alito, and Kennedy would have struck down the Medicaid expansion in its entirety under the newly crafted doctrine of coercion in that case.)
The majority circled back to Medicaid's status as a spending program in Part IV of its opinion, which Justice Breyer did not join, and which may resurrect a theory of spending programs as being like contracts and unlike other federal laws. Though the Court has long relied on the Pennhurst contract analogy for federal conditional spending programs, in some cases (e.g. Barnes v. Gorman), the Court has suggested that the "third party beneficiaries" of spending programs have no enforceable rights in those programs. The majority opinion very briefly noted that "contracts between two governments" cannot be enforced by beneficiaries of those contracts - citing Justice Thomas's concurrence in PhRMA v. Walsh - as if the federal government and the states were co-equal sovereigns. This dicta brings all Medicaid provider and patient actions into question, whether they are raised under the Supremacy Clause or section 1983, the other avenue for Medicaid private enforcement. The majority thus opened the courthouse doors to further eroding of conditional spending statutes in the context of the Medicaid Act. [more after the jump]
April 1, 2015 in Constitutional, Health Care, HHS, Medicaid, Spending, Unconstitutional | Permalink | Comments (0) | TrackBack (0)
Wednesday, March 4, 2015
Oral Arguments in King v. Burwell, and thoughts about additional implications for the case
Oral arguments ran over an hour in King v. Burwell today (transcript available here). As many are aware, the question in this case involves whether the IRS appropriately interpreted the ACA to authorize tax credits for insurance policies purchased on both state-based and federally-based health insurance exchanges. The plaintiffs claimed that the IRS has acted illegally in providing tax credits through federally-run exchanges, and if they are successful, the IRS will immediately cease offering subsidies to individuals who have purchased health insurance in federally-run exchanges.
Reading oral arguments is always less satisfying than hearing or witnessing them, but reading the tea leaves is still irresistible when justices appear to reveal their positions. For example, Justices Kagan, Sotomayor, Ginsburg, and Breyer appeared to agree with the arguments put forth by the United States. Justices Scalia and Alito appeared to agree with Mr. Carvin and the plaintiffs, though Justice Alito appeared open to some of statutory answers being provided by Solicitor General Verrilli toward the end of his argument. The Chief Justice was almost silent during the oral arguments, and Justice Kennedy raised his favorite topic, federalism, and whether Carvin's interpretation of the ACA can lead to unprecedented coercion of the states, raising a fatal constitutional consequence for what should otherwise be an exercise in legislative interpretation.
This line of questioning is worth considering for a moment. Readers are probably aware that the doctrine of coercion was merely a theory until the Court breathed life into it in NFIB v. Sebelius. In that decision, the Court held that the ACA's Medicaid expansion was unconstitutionally coercive because states, in the plurality's view, had to choose between expanding Medicaid to childless, non-elderly adults or losing all of their Medicaid funding. But, the structure of Medicaid is quite different from the structure of the exchanges. If a state rejects Medicaid funding, then that state has no Medicaid program within its borders - this form of cooperative federalism facilitated the coercion analysis in NFIB, because the states successfully argued that they could not realistically leave the program. The exchanges, on the other hand, epitomize 'backstop federalism' - if a state rejected funding to create a state-based exchange, then the federal government would step in (and it did).
Initially, it was unclear what Justice Kennedy was pursuing in his federalism questioning, because he seemed to indicate that he perceived the Medicaid-style federalism at work in the exchanges. He later clarified, however, that he was concerned about the ramifications of the challengers' theory, that Congress intended to deny subsidies in states that refused to establish exchanges, thereby obliquely and opaquely threatening states by refusing to offer tax credits to their citizens. Not only is this interpretation of the ACA plainly wrong, but it would also create a bizarre conditional spending situation where the states did not know they were being threatened until long after they decided to reject federal policy. Justice Kennedy indicated that this reading of the statute would result in a "serious constitutional problem" that should be avoided, and he is right. But, he was also skeptical about the actual language of the statute, so the U.S. cannot yet breathe easy.
One additional observation for now - the impact on health insurance access will be even greater than the parties discussed. If the IRS ends subsidies for insurance policies purchased through the federal exchange, the current tally indicates that approximately 8 million people will lose the subsidies that make insurance affordable for them. While they will not be subject to a tax penalty for failure to carry health insurance, they also will not be able to afford health insurance. That is immediately clear. But, the ripples will be greater than the 8 million, because some states that have obtained waivers to expand Medicaid are placing their newly eligible Medicaid populations into the exchanges. If the exchanges experience a death spiral due to increased premiums and loss of covered lives in the risk pool, then the exchanges become a very unstable way to provide Medicaid coverage and likely become unaffordable for states. Demonstration waivers are supposed to be budget neutral, which would become impossible in plans like Arkansas' if the plaintiffs win this case. Further, low-income individuals tend to churn between Medicaid and private insurance coverage - but if the insurance offered through federal exchanges is not subsidized, then they will churn into uninsured status, thereby increasing dramatically the number of lives affected by this decision.
Of course, if the Court upholds the IRS interpretation of the ACA, then we can all go back to waiting for the next challenge to come along.
March 4, 2015 in Affordable Care Act, Health Care Reform, Health Reform, Medicaid, Obama Administration, PPACA, Spending | Permalink | Comments (0) | TrackBack (0)
Wednesday, January 28, 2015
Health Care Policy by Common Sense?
In announcing the federal government’s approval of Indiana’s Medicaid expansion, Governor Mike Pence invoked common sense in defending his insistence that beneficiaries shoulder a share of their health care premiums. According to Pence, “It’s just common sense that when people take greater ownership of their health care, they make better choices.”
But relying on common sense is not a good way to make health policy. Common sense leads people to incorrectly believe that they are more likely to catch a cold by going out in cold weather or to take megadoses of vitamins that provide no additional health benefit and can be toxic. Common sense also leads physicians down the wrong path. Because lowering blood sugar has been good for the health of diabetics, medical experts recommended tight control of blood sugar levels. But that resulted in an increased risk of death for many patients.
It turns out that our intuitions often lead us astray, making it important that we rely on data from scientific studies to distinguish between good and bad policies. And we know from the data to date that when the poor are required to pay for their health care, they may choose to forgo it, not only when care is not needed but also when it is needed.
Kudos to Governor Pence for bringing the Medicaid expansion to Indiana and for worrying about health care costs. It may turn out that Indiana's cost-sharing is low enough to avoid problems, but rather than trying to contain costs by discouraging patients from seeking too much care, we should try to discourage physicians from providing too much care. Physicians are better able than patients to distinguish between necessary care and unnecessary care.
[cross-posted at Bill of Health]
January 28, 2015 in Access, Affordable Care Act, Consumers, Health Care Costs, Health Care Reform, Medicaid, Policy | Permalink | Comments (0) | TrackBack (0)
Tuesday, January 20, 2015
2012 All Over Again
In 2012, the Supreme Court heard two important Medicaid cases, one in January of 2012 pertaining to payment rates (Douglas v. ILC), and the other in March 2012 pertaining to the ACA's Medicaid expansion (NFIB v. Sebelius). In Douglas, the Court's majority deferred to HHS, allowing the agency to exercise primary jurisdiction over California's Medicaid payment rates and punting the question regarding Supremacy Clause actions by Medicaid providers against noncompliant states. And, in NFIB, the Court decided that Medicaid's modification under the ACA was not Medicaid enough for purposes of Spending Clause doctrine but was Medicaid enough for purposes of the remedy, which was to limit HHS's authority to terminate Medicaid funding for states that refused to expand Medicaid eligibility under the terms of the ACA. Confused yet? So is the Court, and that's a potential problem.
Fast forward to 2014, and the Court is once again hearing a Medicaid reimbursement rate case and an ACA case, in the same time frame as 2012, both of which could be very disruptive. The Medicaid rate case is Armstrong v. Exceptional Child Center, and the weirdly confused oral arguments occurred today. The question the Court granted from the petition for certiorari was whether private parties can enforce the Medicaid Act's equal access provision ("30(a)") against a noncompliant state when HHS has not demanded compliance from the state through payment of adequate reimbursement rates. Armstrong may have far-reaching implications for the Medicaid program, for implied rights of action, and for federal courts' jurisdiction over Supremacy Clause actions, to name a few possible dimensions. Steve Vladeck, author of a very important amicus brief on behalf of former HHS officials, has posted about some of these issues. Rather than re-hash his fine commentary, or Will Baude's pithy overview for SCOTUSblog this morning, I will quickly share some impressions of today's oral arguments.
First, the justices had no idea how Medicaid works, which matters quite a lot when it may be the vehicle for constitutional change. Justice Breyer, for example, did not appear to understand the difference between the state describing how it would set payment rates and the state actually setting the amount of money it would pay to reimburse health care providers for their services. Here, Idaho created a methodology for rate setting that was approved by HHS, but then its legislature decided to use a different rate setting methodology tied to the state's budget. Breyer kept using the example of a doctor submitting a bill for $80 when all he could receive was $60, but the example was inapposite. Another minor example is that the prohibition against balance billing was news to the justices. Another example is Justice Alito's hypothetical about states that allow for medical marijuana being sued because feeral law does not permit possession of marijuana, which had no apparent relevance for the Medicaid preemption questions at hand.
James Piotrowski, on behalf of Exceptional Child Center tried to limit the conversation to whether the state actually followed the plan that CMS approved (which it appears Idaho did not). He also tried to explain why a broad-based Supremacy Clause/Spending Clause decision would be both unnecessary and dangerous, and he advocated for a limited ruling that would allow this set of plaintiffs to seek an injunction to force the state to abide by the reimbursement plan that HHS approved.
The trouble is that the Solicitor General, as he did in 2012, promoted the view that no private rights of action should be permitted. Justices Sotomayor and Kagan quickly called out Mr. Kneedler on HHS’ deep disagreement with this position. Kneedler asserted that HHS does not want these private actions, even though HHS pointedly did not sign the SG's brief, and even though the amicus brief here and in Douglas on behalf of former HHS officials (of all political stripes) clearly explained that HHS both expects and needs private actions to occur. In both cases, the former HHS officials explained that the agency is so woefully understaffed and underfunded that it could never police all of the states' reimbursement rates on a claim by claim basis.
The four dissenters from Douglas were relatively quiet during oral arguments today. In 2012, the Chief Justice authored a dissent that would have denied private rights of action under 30(a) to force states to pay adequate payment rates for equal access to health care providers. I suspect that Roberts, Scalia, Alito, and Thomas remain in the same positions, unless they were convinced that Idaho should have just stuck to the plan and their legislature drove off the rails after CMS approved their rate setting methodology. The real question will be if Kennedy sees this action as some kind of affront to state sovereignty given his affinity for federalism resolutions. If so, then Supremacy Clause actions will be lost for 30(a) litigants, and states will run over Medicaid providers who cannot enforce the adequate payment language in the Medicaid Act. In the very moment that more and more states are negotiating Medicaid expansion under the power given to them by the Court in NFIB, this would be a dangerous precedent both theoretically and on the ground. More to come.
January 20, 2015 in Affordable Care Act, Constitutional, Health Care Costs, Health Care Reform, Health Law, Health Reform, HHS, Medicaid, Policy, State Initiatives, States | Permalink | Comments (0) | TrackBack (0)
Monday, October 27, 2014
Hot off the press!
In this article, published today at the Illinois Law Review online, Jessica Roberts and I argue why the Medicaid expansion is a matter of social justice that must be taken seriously in the upcoming gubernatorial elections. Here's the blurb from the journal:
On the doorstep of its fiftieth anniversary, Medicaid at last could achieve the ambitious goals President Lyndon B. Johnson enunciated for the Great Society upon signing Medicare and Medicaid into law in 1965. Although the spotlight shone on Medicare at the time, Medicaid was the “sleeper program” that caught America’s neediest in its safety net—but only some of them. Medicaid’s exclusion of childless adults and other “undeserving poor” loaned an air of “otherness” to enrollees, contributing to its stigma and seeming political fragility. Now, Medicaid touches every American life. One in five Americans benefits from Medicaid’s healthcare coverage, and that number soon will increase to one in four due to the Patient Protection and Affordable Care Act. Medicaid’s universalization reveals that the program can now be best understood as a vehicle for civil rights. ...
October 27, 2014 in Affordable Care Act, Coverage, Disabilities, Health Care Reform, Medicaid, Obama Administration, Politics, PPACA, Public Health | Permalink | Comments (0) | TrackBack (0)
Wednesday, July 23, 2014
Circuit Split in One Day: Tax Credits, Halbig and King (or, The Latest ACA Headache)
This has been cross-posted for a more general audience at ACSblog. Though it contains more background than most healthlawprof readers will need, analysis comes after the jump.
The D.C. Circuit held in Halbig v. Burwell that the IRS cannot provide tax credits to individuals who purchase private health insurance in states with federally-run insurance exchanges, potentially depriving millions of middle and low income Americans access to affordable health insurance. Improbably, while the blogosphere lit up, the Fourth Circuit held in King v. Burwell that the IRS properly interpreted the Affordable Care Act (ACA) to provide tax credits in all exchanges whether run by a state or the federal government. Members of the Obama Administration immediately declared they will seek rehearing by the D.C. Circuit en banc. The standard of review for petitions for rehearing is rigorous, but given the importance of the case, and the new circuit split, rehearing is conceivable. Further, it is not unreasonable to anticipate that the Supreme Court ultimately will grant a petition for certiorari in either or both of these cases. If it is upheld, Halbig could be the most damaging decision in the ACA litigation wars yet. For those not mired in the details of the ACA and its ongoing legal challenges, here’s why.
The ACA attempts to create near-universal insurance coverage by making Americans insurable and by commanding insurers to play by uniform rules. The ACA was created because, in 2008, one in five Americans did not have health insurance coverage. To make this number tangible, imagine everyone you know with blue eyes… and now imagine they do not have health insurance. That’s how many were uncovered, and the lack of coverage was just about that random too. In the United States, if you don’t have health insurance, you don’t have access to consistent healthcare. The ACA has clear goals, but it is a muddy scrum of legislative drafting that never underwent a conference committee process, and that imprecision has facilitated the litigation in these cases.
To avoid adverse selection (the problem of free riding), the ACA requires Americans to carry minimum essential coverage or face a tax penalty (upheld in NFIB v. Sebelius); however, if insurance premiums would cost more than 8% of an individual’s income, then no tax penalty will be assessed. To facilitate health insurance coverage, the ACA created health insurance exchanges, also called marketplaces, where individuals and small groups can purchase health insurance that provides standardized benefits without exclusions for preexisting conditions and other disequalizing prohibitions. People who earn 100-400% of the federal poverty level are eligible for federal tax credits that assist in paying premiums for private insurance on the exchanges (“premium assistance tax credits,” codified at 26 U.S.C. 36B), increasing substantially the number of people who can afford to purchase private health insurance.
States were given a choice to create exchanges with federal funding under ACA section 1311, and if they opted not to, then the federal government would create “such” exchange in the state under ACA section 1321. Sixteen states and D.C. created their own exchanges before January 1, 2014, so currently two-thirds of states have federally-run exchanges. This landscape is shifting slightly as some states’ exchanges fail and they move to federal mechanisms, while other states are still eyeballing the federal money available until 2015. What matters here is that the majority of exchanges were federally-run on the day that Halbig was decided.
July 23, 2014 in Affordable Care Act, Constitutional, Health Care Reform, HHS, Medicaid, Politics, PPACA, States | Permalink | Comments (0) | TrackBack (0)
Tuesday, March 18, 2014
Hot Off the Press: Medicaid Matters Symposium
I am pleased to share the Medicaid Matters symposium issue that has just been published in Volume 102, Book 2, of the Kentucky Law Journal. This special issue includes articles from Brietta Clark, Mary Crossley, John Jacobi, Elizabeth Weeks Leonard, Laura Hermer (with Merle Lenihan), Sallie Sanford, and Sidney Watson (and me). This is an excellent collection of thoughtful articles that resulted from a day-long workshop on Medicaid in the post-ACA world. Many thanks to the participants in the workshop, and I hope you will enjoy the fruits of their labors!
March 18, 2014 in Affordable Care Act, Health Care Reform, Health Reform, Medicaid | Permalink | Comments (0) | TrackBack (0)
Saturday, November 23, 2013
Dynamic Medicaid Expansion
Yesterday's reports on the annual meeting of the Republican Governors Association indicated disarray over the Medicaid expansion, and an opinion piece in the NYT highlighted the common story that only half of states are expanding their Medicaid programs. If CMS is counting, then this tally is correct, as the federal agency can only account for those states that have submitted the proper documentation for expansion. But this is not the only way to consider the states' decisionmaking regarding the expansion. I have just posted a short essay preliminarily detailing research I have performed over the last several months, which reveals that many states currently counted as "not participating" are acting to expand their Medicaid programs. Here is the abstract:
November 23, 2013 in Affordable Care Act, CMS, Constitutional, Health Care Reform, Health Law, Health Reform, HHS, Medicaid, Obama Administration, PPACA, Spending | Permalink | Comments (0) | TrackBack (0)
Monday, October 7, 2013
Federal-State Tensions in Fulfilling the ACA's Promises
[Cross posted today at Constitution Daily:]
The Affordable Care Act expresses many goals, but its heart is the desire to create a health insurance home for all Americans. The American healthcare system historically exists at the pleasure of a number of stakeholders and is not a coherent whole. This lack of system is reflected in the consistent tensions that underlie American healthcare, most notably federal power versus state power; the collective versus the individual; and the individual versus the state. In creating near-universal health insurance, the ACA has resolved one of those tensions, individual versus the collective, in favor of the collective. To that end, the ACA eliminated many of the practices health insurers used to cherry pick policyholders, which excluded people who need medical care from their risk pools. In so doing, the ACA represented a federal choice to make all people insurable, whatever their wealth, age, medical history, sex, race, or other distinguishing factor.
Despite the redirection this leveling of the health insurance playing field represents, the ACA did not craft a coherent whole out of the American healthcare system. Instead, the ACA remodels the preexisting, unstable healthcare system. In building on the old foundation rather than starting anew, the law retained the historic role of the states in regulating medical matters. To that end, the ACA urged the states to implement two key aspects of its insurance modifications: Health Insurance Exchanges and the expansion of the Medicaid program. The federal government has the power under the Spending Clause to create a federally-run insurance mechanism, but it chose instead to employ cooperative federalism to keep states engaged in healthcare policymaking. The trouble is that some states have not been cooperating with these central legislative goals.
The Exchanges, or Marketplaces, are an instrument through which qualified private health insurance plans can be purchased by individuals or small businesses. The states were offered federal funding to create their own state-run Exchanges, which were operative as of October 1, 2013 (Tuesday last week). Many states created Exchanges, but many rejected them as an expression of their distaste for the ACA. Predictably, many of the states that have refused to create their own Exchanges were the same states that challenged the constitutionality of the ACA. While there is value in dissent, the states that refused to create Exchanges invited more federal power into the state, because rejecting the federal offer for funding to create a state-run Exchange did not halt Exchanges from coming into existence. Instead, the ACA tasked the federal government with operating Exchanges in states that did not create their own. While expressing a desire to protect their state sovereignty, these states have invited federal authority into their borders. Though the Exchanges at both the state and federal levels have experienced some technical glitches this week, it appears that many people are eager to purchase insurance through them and that they have been successful at doing so. The states that rejected Exchanges have not stopped implementation of the law, but their actions have other notable ramifications.
The Medicaid expansion was designed to catch childless adults under age 65 and below 133% of the federal poverty level in Medicaid’s safety net. As with other modifications to the Medicaid program over the years, the expansion added a new element to the Medicaid Act that states could reject, but they could lose all of their funding if they made that choice. The day the ACA was signed into law, states challenged the expansion of the Medicaid program as unconstitutionally coercive. They succeeded on this claim in NFIB v. Sebelius, and the Court rendered the expansion optional for states. Immediately pundits began to question whether the states would participate in the Medicaid expansion.
Though national media tallies make it appear that just over half of the states are participating in the Medicaid expansion, in reality the number is and will be much higher. In almost every state reported as “leaning toward not participating,” and in many states reported as “not participating,” some significant act has occurred to explore implementation of the Medicaid expansion. Some states have special commissions or task forces researching expansion; some state governors have indicated a desire to participate and have included the expansion in the budget; some legislatures have held debate or scheduled it for the next session; and so on. Though some states will not have their Medicaid expansions running by January 1, 2014, it seems very likely that most if not all states will participate in the expansion in the relatively near future.
In the meantime, state non-cooperation will have a direct effect on some of the nation’s poorest citizens. People from 100% to 400% of the federal poverty level are eligible to receive tax credits for purchasing insurance in the Exchanges. In states with no expansion, people above 100% of the federal poverty level who would have qualified for Medicaid will still be able to obtain insurance through federal subsidies in the Exchanges. But, people who are below 100% of the federal poverty level will be too poor for tax-credits and living in states that have not yet expanded their Medicaid programs, therefore they will not be able to enroll in Medicaid either. These very low income people will not be penalized for failing to carry health insurance, but they will not have health insurance either. These individuals will get caught in a health insurance black hole that exists in part because the Court allowed states to refuse Medicaid expansion and in part because of state resistance to partnering in the implementation of the ACA.
State cooperation in the Medicaid expansion is even more important than state participation in the Exchanges, because many thousands of people may not get the access to health insurance that is the promise of the ACA. The debate over the meaning of federalism that swirls around political and academic circles will have a direct and important effect on the people who can least afford it. The good news for them is that Medicaid’s history indicates that all states eventually participate in the program and its amendments, but this week’s implementation of the Exchanges keeps access to medical care through health insurance tantalizingly out of reach.
October 7, 2013 in Affordable Care Act, Constitutional, Health Care, Health Care Reform, Health Law, Health Reform, Medicaid, Obama Administration, PPACA, Private Insurance, Spending, State Initiatives | Permalink | Comments (0) | TrackBack (0)
Friday, September 27, 2013
More states are expanding Medicaid than you might think
Big news in the world of ACA implementation: CMS approved Arkansas' proposed waiver for an alternative mechanism for Medicaid expansion, which is to be called the Arkansas Health Care Independence Program. Arkansas proposed a premium assistance program, wherein newly eligible Medicaid beneficiaries will obtain insurance through the Arkansas health insurance exchange by receiving financial assistance for premium costs. This will place the new Medicaid population in qualified health insurance plans, i.e. private health insurance, which is administratively more expensive than government-sponsored insurance, but it may help to deal with the problem of "churn" between Medicaid and Marketplace-based private insurance.
CMS's approval of Arkansas' Medicaid demonstration program is significant for a number of reasons, but here I'd like to focus on what I think is one of the biggest: this waiver approval will pave the way for other states that are "undecided" to finally declare their intent to expand their Medicaid programs. I believe this will happen relatively quickly, because most states are already working on expansion. You would not think this is true from the national media's reporting on the Medicaid expansion. If you have been following any of the many color-coded maps depicting the five possible categories of expansion (expanding, not expanding, leaning toward expanding, leaning toward not expanding, and alternative model), you would think that just over half of the states are participating in the Medicaid expansion. The national media has gotten this story wrong, because they do not pick up on the negotiations, investigations, committees, special commissions, and other ways in which the "leanging toward not participating" states are actually exploring how they can expand their Medicaid programs. To understand how dynamic the state decision making is, you have to track the local newspapers that follow every move of the state legislatures and their conversations with their governors (which I have been doing all summer).
After NFIB v. Sebelius was decided, I wrote that most states would still expand their Medicaid programs. It appears that most states are now working toward Medicaid expansion in some form. In future posts, I will explain this dynamic federalism story in more detail. For today, I will emphasize that CMS has opened the door to more state waivers, which will lead to more states expanding their Medicaid programs. Though I am not necessarily on board with federalism by waiver, espcially given states' history of waiver mistakes and failures, I do think that in this instance, alternative expansion is better than no expansion. Otherwise, many of our poorest citizens will be left out of the attempt at national insurance coverage, not paying a penalty, but not having access to much-needed healthcare either.
September 27, 2013 in Affordable Care Act, Constitutional, Coverage, Health Care Reform, Health Reform, HHS, Medicaid, PPACA, Spending, States | Permalink | Comments (0) | TrackBack (0)
ACA and the Perils of Federal-State Partnerships
When it comes to public benefit programs, federal-state partnerships often disappoint. States once determined eligibility for food stamps, and access to the program was not available in many counties across the country. And because states have set the income thresholds for adults to qualify for Medicaid, access to health care coverage has varied considerably from state-to-state for the indigent.
Unfortunately, both because of ACA’s design and the Supreme Court’s decision on the Medicaid expansion, ACA’s implementation relies quite a bit on federal-state partnerships. We are now seeing substantial differences from state to state in the roll out of the statute. As the Wall Street Journal reported earlier this week and the New York Times earlier this month, poor people are much more likely to obtain Medicaid coverage in New Mexico than next door in Texas, and customers for insurance on an ACA exchange will find much more guidance from state officials in Colorado than in Missouri.
The Medicare model of a federal-only program works much more effectively at delivering its benefits than does the Medicaid/ACA model of a federal-state partnership.
September 27, 2013 in Affordable Care Act, Health Care Reform, Medicaid, PPACA | Permalink | Comments (0) | TrackBack (0)
Thursday, September 5, 2013
Poverty and Cognitive Function
Don't miss a fascinating article in the August 30th issue of Science, "Poverty Impedes Cognitive Function." The article contends that there is a causal explanation for the correlation between poverty and disfunctional behavior, such as the failure to keep medical appointments or to employ healthy behaviors. Put crudely, the connection is that people in poverty have to think about so much just to keep going that they don't have the cognitive bandwidth to make carefully reasoned decisions.
The authors of the article, Anandi Mani, Sendhil Mullainanthan, Eldar Shafir, and Jiaying Zhao, present two studies in support of their claim. The first study involved four experiments in which shoppers at a New Jersey mall were paid participants. The income level of the shoppers varied, from the bottom quartile of US income to over $70,000. In the first experiment, participants were asked to think about a decision about how to pay for car repairs, and were randomized to inexpensive ($150) or expensive ($1500) costs of the repair. They were then asked to perform simple cognitive tests on a computer. Among those asked to think about the inexpensive repair, there were no significant differences by income level in performance of the cognitive task. By contrast, there were significant differences in performance by income among those confronted with the more expensive repair. Variations on this experiment involved problems where sums of money were not involved (to control for math anxiety), incentives in the form of getting paid for getting the right answers on the cognitive tests, and situations in which participants came to a decision about the financial problem, engaged in intervening activities, and then were asked to perform the cognitive tests. Each of these variations produced results similar to the initial experiment: the performance of people in poverty on the cognitive tests was significantly associated with the expensive repair, but the performance of those in higher income groups was not.
In the authors' second study, participants were a random sample of sugar cane farmers in Tamil Nadu in southern India. They were interviewed before and after the cane harvest. Pre-harvest the farmers faced more significant financial pressures (as measured by criteria such as numbers of pawned items, numbers of loans, and the like) than post-harvest. Performance on cognitive function tests was significantly higher post-harvest than pre-harvest. Because the cane harvest extends over a considerable time period, the authors were able to control for calendar effects; the difference was similar early or later in the 5 month period of the harvest. The authors conclude that poverty has about the same cognitive consequences as the loss of a night's sleep.
To be sure, other variables might explain the authors' findings. They are careful to discuss many of these such as physical exertion, stress, nutrition, or training effects. If the authors are right, however, their findings have some impressive implications for health policy. One, which they note, is that it may just be more difficult for people who are poor to perform complex tasks needed to apply for eligibility for programs such as Medicaid (why are we surprised that so many who are eligible don't sign up?). Another is that programs designed to incentivize healthy behaviors may just not work very well if they ignore cognitive loads.
September 5, 2013 in Access, Affordable Care Act, Consumers, Health Care Costs, Health Care Reform, Health Economics, Health Reform, Medicaid, Obesity, Prevention, Public Health, Uninsured | Permalink | Comments (0) | TrackBack (0)
Wednesday, June 26, 2013
US v. Windsor: Some Constitutional Uncertainty, Many Healthcare Implications
The Court's decision striking down section 3 of DOMA in United States v. Windsor was unsurprising, yet still a relief to many. Section 3 defined marriage for federal statutory purposes to mean only marriage between one man and one woman. Based on the late March oral arguments in Windsor, as well as Justice Kennedy's majority opinions in Lawrence v. Texas and Romer v. Evans, the common wisdom was that federalism would be the prevailing reasoning because the states historically have governed family law matters, including marital status. One of Justice Kennedy's projects has been revitalization of the Court's enforcement of federalism to protect the states, especially as a method to protect individual liberties (see, e.g., Bond v. United States).
And so it was. Justice Kennedy provided both structural and substantive reasons for striking down section 3 of DOMA. From a structural perspective, Justice Kennedy's majority emphasized traditional state dominion over marriage, writing: "By history and tradition, the definition and regulation of marriage ... has been treated as being within the realm of the separate States." Though the opinion walked right up to the federalism line, it stopped short of holding that DOMA exceeded congressional authority or violated the Tenth Amendment. Instead, the majority moved forward on substance and held that the federal government cannot take away the marriage right and its attendant societal status once conferred by the states. To do so was a violation of gay couples' liberty and dignity. The Court also hinted at an equal protection analysis, condemning Section 3 as creating second class marriages in states that recognize same-sex unions. The majority applied only rational basis review, rather than heightened scrutiny, holding that DOMA was motivated by anti-gay animus and served no legitimate governmental purpose.
Neither the federalism, nor the equal protection, nor the due process analysis was either complete or clear cut, and each opens more questions than it closes. For example, Justice Kennedy views the experiment of the states to protect individual liberty, and here, it happens that twelve states do protect liberty, more than the federal government. But, this view of federalism's aspirational work does not address the 37 or so states that do not protect the liberty interests of their gay citizens from state discrimination let alone the federal government's limited view of gay rights. And, this reversion to assessing traditional state law domains does not advance modern conceptions of federalism that acknowledge most state law is ineffibly intertwined with federal law by virtue of statutory interconnectedness, conditional spending, or other cooperative federalism mechanisms. Instead, Justice Kennedy seemed to be reaching back to the dual sovereign model of doctrinal federalism.
Fortunately, this regressive model of federalism does not seem to hinder the work that Windsor is likely to do with regard to DOMA's far-reaching effects on healthcare. For example, marital status influences not only access to affordable private health insurance (which is usually easier and cheaper through marriage), but also qualification for the Federal Employees Health Benefits Program as well as Social Security, the gateway for Medicare at age 65. Section 3 also affected Medicaid enrollment and spend-down requirements for the elderly entering nursing homes. The Medicaid/DOMA issue was presented to the Court in a petition for certiorari that the Court has not granted or denied yet. Back in October, I highlighted the First Circuit's decision in Massachusetts v. Department of Health and Human Services, which was mentioned in passing by Justice Kennedy as a case that would suffer vacatur if the Court dismissed for lack of standing. It seems fair to read approval of the First Circuit's decision into Kennedy's cite, which makes me think the Court will not grant the petition.
In addition to public and private health insurance issues, some healthcare delivery issues are likely to be resolved by Windsor as well. For example, many stories have detailed how hospitals have turned away same-sex partners under the guise of HIPAA privacy. Other tales have highlighted how substituted decision-making at the end of life can devolve to estranged family members when same-sex partnerships are not recognized as giving the gay spouse decisional authority that would ordinarily be given without a second thought to a heterosexual spouse. Doctors' offices have refused to recognize same-sex spouses as parents of children who need medical attention. And, care for infants of same-sex couples may become easier now that the Family Medical Leave Act will apply to same-sex marriages. It seems that the federal recognition of gay marriage that will flow from Windsor will be beneficial in many healthcare situtations, even in states that do not recognize same-sex marriage. Federal agencies have much work to do interpreting the word marriage in the coming days, but it seems that these decisions will facilitate a more functional approach to families' experiences in the healthcare system.
June 26, 2013 in Aging, Constitutional, Health Law, HHS, Medicaid, Medicare, Politics, Spending, States, Unconstitutional | Permalink | Comments (0) | TrackBack (0)
Friday, June 14, 2013
Beyond Medicaid--How the Affordable Care Act Will Change Mental Health Treatment--and some helpful Apps for further research
This is a helpful article from a mental health perspective about how the Affordable Care Act will change mental health treatment.
Given the volume of material health lawyers need to review about not just law directly but also health policyFor anyone who has not yet entered the world of content aggregation, I'm also recommending Zite, a free app that will create a personalized "magazine" consisting of any specific website you visit on a regular basis and also sites within a content area that help you get the news you are looking for without having to visit dozens of individual sites. Another similar app is Feedly and less serious (more fun) is Stumbleupon which is similar to the experience of browsing in a library.
June 14, 2013 in Affordable Care Act, Coverage, Medicaid, Mental Health | Permalink | Comments (0) | TrackBack (0)
Wednesday, May 29, 2013
Indiana's second petition for certiorari denied
The Supreme Court will not be hearing Indiana's argument that it can deny governmental funding to healthcare providers who perform abortions. The Seventh Circruit had held that Indiana's prohibition on government funding was an impermissible limitation on Medicaid's free choice of provider provision, a violation of the statutory rights promised to Medicaid enrollees. Media coverage by such news outlets as NPR and BNA has indicated that the abortion funding prohibition was the sole issue at stake in this petition, noting that this petition was a test case for the ten or so states that have passed legislation aimed at defunding Planned Parenthood. While this point is important and true, the petition submitted by Indiana told a much bigger story.
Indiana used the Seventh Circuit's decision as a vehicle for asking the Court to completely eliminate Section 1983 rights of action for Medicaid enrollees. Indiana had petitioned the Court with a similar question in Indiana Family and Social Services v. Bontrager, the petition for which was denied a few weeks ago. Indiana asked the Court to take the cases as companion cases, which is evident from the petition filed in Secretary of Indiana Family and Social Services Administration v. Planned Parenthood of Indiana, but not in the media coverage. Even though the petition in Bontrager was denied, Court watchers still considered Indiana's petition and Planned Parenthood's cross petition possible grants.
I suspect that the denial was due to agreement with the substance of the Seventh Circuit's decision that this kind of restriction on Medicaid funding is inappropriate (or a desire to stay out of the abortion fray for now, given that Arizona, Hobby Lobby, and others may be filing petitions soon). However, I also suspect that at least four of the justices are willing to revisit the garbled jurisprudence surrounding section 1983 actions thanks to Gonzaga. Michigan filed amicus briefs supporting Indiana's petitions, which were signed by about eleven states, that focused on the federalism and separation of powers implications of section 1983 actions against states that fail to comply with the Medicaid Act. Unsurprisingly, the states' briefs rejected not only section 1983 rights of action, but also Supremacy Clause actions, which were at issue in last term's Douglas v. Independent Living Center. The states cited the dissent authored by Chief Justice Roberts rejecting Supremacy Clause actions by Medicaid enrollees and providers as evidence that all of the private actions against states should end.
So, keep your eyes and ears open - as I mentioned a few weeks ago, the Court is hearing an ADEA case in the October 2013 term that may become a referendum on 1983. Or, the Court may be waiting for just the right Medicaid remedy case. Either way, it seems reasonable to expect that the Court will take up the Medicaid enforceability through 1983 question again in the not-too-distant future.
May 29, 2013 in Constitutional, Medicaid | Permalink | Comments (0) | TrackBack (0)