THE AFFORDABLE CARE ACT PART II

ABSTRACT: Other than the individual mandate (see 8/19 post), the biggest focus of resistance to the Affordable Care Act (ACA) has been the expansion of Medicaid, the health insurance program for low income individuals. If all states implement the Medicaid expansion called for by the ACA, over 21 million individuals, including 4.5 million children, who don’t have health insurance will gain coverage.

The resistance has been based on the assertion that the expansion will cost states money. However, for the first three years, the federal government will pay 100% of the cost and at least 90% thereafter. Because the newly covered individuals would have cost the states about $18 billion for uninsured, uncompensated care, overall the states will save $10 billion.

Republican Governors and state legislators, looking for a symbolic and substantive way to express their opposition to the ACA, have taken steps to refuse to participate in the Medicaid expansion, refusing significant federal funding. As a result, nationwide, hundreds of thousands of low-income residents will not receive health insurance.

Although it is too soon to know for certain, the bottom line is likely to be that the Affordable Care Act will provide very significant benefits to those who don’t have health insurance and get it, and that there are likely to be real benefits for those who already have health insurance as well. States that are focused on making the ACA work will see good results; states that work to undermine the law will not see good results. The sad thing about this self-fulfilling prophecy is that it will be the residents of those states who will suffer with no, or less effective, health insurance and probably worse health.

FULL POST: Other than the individual mandate (see 8/19 post), the biggest focus of resistance to the Affordable Care Act (ACA) has been the expansion of Medicaid, the health insurance program for low income individuals paid for jointly by the states and the federal government. If all states implement the Medicaid expansion called for by the ACA, over the next 10 years over 21 million individuals, including 4.5 million children, who don’t have health insurance will gain coverage. But when the Supreme Court upheld the overall ACA, it ruled that states couldn’t be required to participate in the expansion of Medicaid included in the law.

Aside from the political opposition, the resistance has been based on the assertion that the expansion will cost states money. However, for the first three years the federal government will pay 100% of the cost and at least 90% thereafter. Over 10 years, it is estimated that if all states implement the expansion, they would spend an additional $8 billion, which would be a 0.3% increase over their spending without the expansion. Furthermore, because the newly covered individuals would have cost the states about $18 billion for uninsured, uncompensated care, overall the states will save $10 billion. There may be other savings to states from the implementation of the ACA as well, although the impact will vary by state. [1]

Republican Governors and state legislators, looking for a symbolic and substantive way to express their opposition to the ACA, with encouragement from the Tea Party and other staunch Obama opponents, have taken steps to refuse to participate in the Medicaid expansion, refusing significant federal funding. As a result, nationwide, hundreds of thousands of low-income residents will not receive health insurance, despite the fact that there would be no cost to the states for 3 years and a 10% maximum share of the cost after that. In some states, such as Florida, after a hard look at the numbers and some grassroots activism, Republican elected officials have reversed their original stand and have decided to participate. However, New Hampshire, for example, currently is refusing to participate. This means that 58,000 low-income residents will not receive health insurance and, for many of them, it will likely mean they don’t get care they need. [2]

Republicans, and especially Tea Partiers, are making wild claims about how Obama Care will hurt small businesses and the economy. These claims have been soundly refuted as false by independent groups such as FactCheck.org and PolitiFact.com. The latter notes that economists generally believe that the federal budget cuts due to the sequester have done much more harm to the economy.

Undoubtedly, there will be bumps in the road during implementation of the Affordable Care Act. There always are challenges in implementing complex legislation, and the ACA was made more complex by the compromises Obama made in trying to get Republican support, which they then never gave to him or to the law.

Although it is too soon to know for certain, the bottom line is likely to be that the Affordable Care Act will provide very significant benefits to those who don’t have health insurance and get it, and that there are likely to be real benefits for those who already have health insurance as well. Most experts believe that states that are focused on making the ACA work will see good results. But that in states that work to undermine the law the results will not be good. [3] For example, some states are refusing to set up the exchanges to help the uninsured buy coverage and some are refusing to provide information to help residents make informed decisions on which plan to buy. Elected officials in these states are likely to then say, “See it doesn’t work!” The sad thing about this self-fulfilling prophecy is that it will be the residents of those states who will suffer with no, or less effective, health insurance and probably worse health.


[1]       Holahan, J., Buettgens, M., Carroll, C., & Dorn, S., 11/1/12, “The cost and coverage implications of the ACA Medicaid expansion: National and state-by-state analysis,” The Urban Institute and the Kaiser Commission on Medicaid and the Uninsured (http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8384_es.pdf)

[2]       Editorial, 8/7/13, “GOP stance against Obamacare hurts thousands of NH families,” The Boston Globe

[3]       Lehigh, S., 8/14/13, “The GOP’s Obamacare whale hunt,” The Boston Globe

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