The remark that solicited the boos when Republican presidential candidate Mitt Romney was addressing the NAACP convention was his standard statement that he would repeal and replace “Obamacare,” which is not to be confused with Massachusetts’ “Romneycare.” But it’s not about the individual mandate, which was protected by the Supreme Court, or the insurance exchanges, which the law says will be created by the Federal government if the states refuse to do so. The primary issue is the expansion of Medicaid.
The law call for raising the income level for Medicaid qualification to 133% of the Federal poverty limit and include adults without children. This qualification expansion can also include the disabled who are in the two-year waiting period for Medicare. The expansion would open Medicaid to the working poor, those who are limited in their earning ability and who are denied access to health insurance by employers who only hire part-time to avoid paying benefits. Additionally, the states will not be able to use an “asset test” for Medicaid qualification. That means that someone who has lost his/her job but owns a house or a good car will not be prevented from joining Medicaid. Parents whose children have been enrolled in programs like S-CHIP will now be able to join Medicaid. Children will continue to be eligible for the programs specifically designed for them, but the new income eligibility level will allow more to be enrolled.
Beginning in 2014, those states enrolled in the expanded Medicaid will receive full federal funding for three years, and then be funded at 90%. States may choose to expand their Medicaid coverage early, but will not receive the expanded funding until 2014. The expansion population is defined as those who were not eligible due to their income on December 1, 2009, up to those earning 133% of poverty level.
Republican governors are tripping over each other to reject the expansion. Among the states rejecting the expansion are Arizona, New Mexico, Texas, Kansas, Oklahoma, Arkansas, Louisiana, Missouri, Alabama, Georgia, Florida, and South Carolina as well as Iowa and Wisconsin. Millions will be denied health care. The Medicaid expansion is intended to fill the gap between those who can afford to buy health insurance from an exchange and those who already qualify for Medicaid. It is in some ways simpler than filling this gap with subsidies for insurance premiums.
Hospitals would be adversely impacted by the rejection of the expanded benefits. They already suffer from the uninsured, who must be stabilized when they appear in emergency rooms. Hospitals gambled that the ACA would greatly improve their financial situation by decreasing the number of uninsured patients whose bills don’t get paid. For that reason, they agreed to cuts in Medicaid and Medicare reimbursements over 10 years to help fund the law.
Governors are afraid that the expansion will bring out more than just the newly eligible, but bring out those who are already eligible but have not enrolled. There are millions of them. But the expansion of Medicaid could have positive effects on states’ economies. Studies have shown that Federal Medicaid dollars ripple through an economy. Each dollar of Medicaid results in a $2 increase in gross domestic product.
The economic impact has already been felt on Wall Street in the medical industry, and insurance company WellPoint is spending $4.9 billion to buy out Amerigroup, a small medical insurance company that specializes in Medicaid administration.
The ACA is going to most benefit minorities, who have the highest percentage of uninsured, so naturally, any statement that it will be repealed would be greeted with boos from a minority audience. It’s not as though any Republican has put forth a competent plan to replace it. The best anyone has offered was holding hearings and studying the problem. During the debates over the ACA, the best the Republicans offered was a plan to insure 3 million of the 50 million uninsured. During his administration, President George H. W. Bush proposed a plan to insure 30 million of the 35 million uninsured. Just in twenty years, the Republican self-definition as “compassionate conservatives” has deteriorated to that level. They not only do not want to insure the uninsured, they are ignoring their own supporters in the medical industry. The ACA will benefit health insurance companies by enrolling tens of millions in their policies, benefit medical providers by greatly reducing the uncollectible accounts receivable that they now face, and benefit the pharmaceutical industry by giving them more customers. The insurance companies will be trading higher levels of benefits and expanded coverage for those with pre-existing conditions for a larger risk pool that should decrease costs. It will also present them with more preventative care and early interventions, which should reduce the number of cases that reach critical stage before medical care is sought and received.
This is a purely ideological battle, one that does not make any logical sense from the Republican point of view. They are cutting off their own corporate supporters with this position. And Mitt Romney, standing in front of the NAACP with that patented Republican smug look while being boo’ed, saying later that he expected to be boo’ed but would not pander to the audience, showed why the Republican party doesn’t have a chance in Hell of changing the minds of those they don’t care about or for.