In all the hoopla over the main verdict concerning the individual mandate in the Affordable Care Act and the Chief Justice’s vote on it, two other important features have had less attention paid to them.
The ACA sought to decrease the number of poor uninsured by expanding the eligibility of Medicaid to those earning up to 133% of the federal poverty level, compared to the current 100% for most people. The federal government would pay 100% of the extra costs incurred for the first three years and at least 90% (probably around 93%) subsequently, with the states covering the balance. Under the original law, the federal government could coerce the states into accepting this expansion by withdrawing all their Medicaid funds if they refused. The Supreme Court ruled 7-2 that this was unconstitutional and that states could resist the expansion without paying the penalty of losing all their current Medicaid funding.
Initially the administration did not seem that concerned about this setback since the terms of the expansion seemed so generous to the states that it seemed unlikely that they would reject the opportunity to cover more of their poor uninsured at relatively little cost to them.
But they had overlooked the doctrinaire attitude of some Republican-dominated states that are so opposed to the ACA that they say they are willing to forego the funds and not expand Medicaid eligibility, thus continuing to deny some poor people access to regular health care and forcing them to continue to depend on the more expensive emergency rooms, which actually costs a lot more. Seven states have definitely said no, while another eight are supposedly undecided, but leaning towards no. Some are even going so far as to argue that the ruling allows them to actually cut Medicaid eligibility to less than what it is now, throwing even more poor people onto the rolls of the uninsured.
It is quite extraordinary the extent to which these Republican-dominated states are willing to let the lower-income people suffer from inadequate health care coverage, even rejecting ‘free’ money from the federal government to do so. It remains to be seen if and when greater awareness of what they have done sinks in, the people in those states will be angry enough at their leaders cutting off their noses to spite their faces that they will demand that they reverse course and accept the expansion. After all, even if they don’t care about health care for the poor, more money coming into the state will help its economy, and so even naked self-interest will work in favor of accepting it.
Some Republican-dominated states are also not going to create the health care exchanges that are required to be set up by the ACA, through which individuals can more easily compare competing health insurance options and purchase coverage, with financial support offered for those earning between 133–400% of the federal poverty level. The states that have so far not taken any action to create these exchanges include Louisiana, Florida, Nebraska, Alabama, Oklahoma, Georgia, Indiana, Kansas, Missouri, Michigan, South Dakota, Texas, Virginia and Wisconsin, though they still have until the end of the year to change their minds and create one. Under the law, the federal government will step in and create exchanges for those states that do not meet the deadline for doing so.
In this case, the states’ rejection may actually be a good thing. The exchanges set up by the federal government will be more uniform is design and operation and if they turn out to be better than those set up by other states, more states may adopt them. The more people that get covered by a single federal system (Medicare, Medicaid, Veterans Administration, health exchanges), the easier it will be to transition to a single payer system in the future.