Exiling the Poor from the Insurance Market
posted by Frank Pasquale
John Roberts’ jurisprudential wizardry in NFIB has been compared to the artistic genius of pro wrestlers and rappers. Poor Americans in states newly empowered to resist the ACA’s Medicaid expansion may need even more ingenuity to get themselves insured. Both Kevin Outterson and my colleague John Jacobi have observed the perplexing predicament imposed on the poor in states that keep Medicaid 1.0, and resist Medicaid 2.0. From Jacobi’s post:
The reform provides insurance subsidies through tax credits. The credits are calculated on a sliding scale, according to household level, for people with income up to 400% of FPL [the federal poverty line] — subsidizing more generously someone earning 200% of FPL, for example, than someone earning 350% of FPL. But, under 26 USC 36B(c)(1), credits will not be distributed to those with incomes below 100% of the FPL. Why? Because Congress assumed states would take up the Medicaid expansion, obviating the need for exchange-based subsidies for the very poor. . . .Bottom line: states rejecting Medicaid 2.0 will not only forego about 93% federal funding for the program between 2014 and 2022, but they could also be depriving the poorest of the uninsured from any shot at coverage — potentially affecting millions nation-wide.
Georgia hospitals are already worried about the “unexpected prospect of lower reimbursements without the expanded pool of patients” to be covered by the Medicaid expansion:
Last year, Georgia hospitals lost an estimated $1.5 billion caring for people without insurance. The promise of fewer uninsured is what led the national hospital industry to agree to the health law’s $155 billion in Medicare and Medicaid cuts over a 10 year period. The Medicaid curveball comes at a time when Georgia hospitals are already in the throes of a massive industry transformation to improve quality and efficiency driven by market forces as well as the new law. Hospitals face lower payments from insurers and pressures to consolidate. One in three Georgia hospitals lose money. All are busy preparing for new standards under the law that, if not met, could mean millions of dollars in penalties.
It’s hard to imagine how hospitals like Grady can continue to act as a safety net in that environment. The article notes that “Georgians already pay for the cost of care provided to people without insurance through higher hospital bills and inflated insurance premiums.” If that trend continues, all the states refusing Medicaid 2.0 may end up doing is shifting the cost of the Medicaid expansion population from national taxpayers to Georgians with insurance. The superwealthy Americans of Marin County and Manhattan ought to send Georgia Governor Nathan Deal a thank you note for keeping Georgians’ problems for Georgians themselves to solve.
July 8, 2012 at 9:31 pm
Posted in: Health Law, Law and Inequality
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Responses (12)
Brett Bellmore - July 9, 2012 at 7:35 am
What precisely is the point here? That unconstitutional laws ought to be upheld anyway if they benefit somebody?
Frank Pasquale - July 9, 2012 at 8:54 am
No–the point is that Red States that resist the Medicaid expansion are hurting their own citizens. Providers will determine whether that pain is primarily felt by the poor (by refusing to treat the uninsured), or insured citizens (by sticking insurers with bills high enough to cross-subsidize care for the poor). It will be up to “must have” hospitals to play hardball against the insurers, or let the poor go untreated and suffer avoidable pain and death.
Prattle On, Boyo - July 9, 2012 at 2:23 pm
Given the predilection for so called red states to chop off their own nose to spite their own long-term interests faces, I predict the red states will allow the poor to die in the streets en masse.
Brett Bellmore - July 9, 2012 at 4:21 pm
As they were a couple of years ago, when the ACA hadn’t been passed yet?
Shag from Brookline - July 10, 2012 at 6:52 am
Once again Brett demonstrates his plantation mentality.
Brett Bellmore - July 10, 2012 at 8:34 am
Again I demonstrate my irritation with people who assert that a reversion of the law to a recent status quo ante will result in Hell on Earth. It’s annoying enough when the status quo ante is ten or twenty years back, and the person claiming this horrible consequence might be simply subject to failing memory, or assuming to take advantage of such. But it really sticks in my craw when we’re assured that restoring a prior state only a couple years back will have such ahistorically horrible consequences.
The poor were not dying in the street en mass before the passage of Obamacare, or even prior to the One’s election. Spare us all the histrionics.
Joe - July 10, 2012 at 8:56 am
Finishing reading “Did Jesus Exist,”* (who some people actually think is “the One”), I don’t think the ends of times are upon us, but the PPACA (which expanded not “LBJ-aid” but “Medicaid”) addressed a serious problem in a way that noticably helped many people. Taking it away would in return hurt many people. If this was constitutionally required, it would be appropriate, but it is not.
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* Bart Ehrman. Spoiler: he did. His continual existence is not a historical question as such, and that is the method of the book.
Brett Bellmore - July 10, 2012 at 9:10 am
Obviously I disagree with the chief Justice about upholding the ACA being important enough to justify an unreasonable reading of the penalty being a tax, while blowing whether that “tax” was a direct tax. But, yes, my point is that you can’t properly spare an unconstitutional law review by yoking it to a clause that helps somebody. The “Bill of Attainder and free puppies for girls with Leukemia” act of 2012 does not get upheld just because taking puppies away from little girls with leukemia would be inhumane. It would, rather, be constitutionally irrelevant.
Joe - July 10, 2012 at 9:49 am
I don’t know who is saying that we should pretend a law that we think is unconstitutional is not because the law helps puppies so your “point” is somewhat pointless.
Brett Bellmore - July 10, 2012 at 10:30 pm
I hear plenty of people saying the ACA had to be upheld because it enabled sick people to get insurance. Same principle.
Shag from Brookline - July 11, 2012 at 6:27 am
Brett is apparently hard of hearing with this incomplete sentence:
“I hear plenty of people saying the ACA had to be upheld because it enabled sick people to get insurance.”
Brett left out that the sick people wanted insurance so they could get affordable medical treatment. Brett has let us know of his travails, apparently successful, with his personal healthcare situation. Perhaps others should be as fortunate as he. But then again, Brett’s a libertarian: he got his, and he doesn’t care about others. That’s apparently his principle.
Joe - July 11, 2012 at 9:18 am
I do not want to get to the merits here like Shag since it sort of buys into the allegation. I am not assuming stuff not in evidence, that is, the “plenty of people” would say that even if it was clearly unconstitutional.
They think it is constitutional or at best is a reasonable question either way (the whole presumption of constitutionality thing that sensibly goes back to the Founding; I realize some, like Randy Barnett want to toss that out), so yes, the serious negative effects of tossing it would be a bad thing.
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