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Obamacare, the Oregon Experiment, and Medicaid

Tomorrow, as mandated by the Patient Protection and the Affordable Care Act (PPACA, often called just the Affordable Care Act, or ACA, or “Obamacare”), the government-maintained health insurance exchanges will open for business (that is, assuming the likely government shutdown doesn’t stop them temporarily). We here at SBM have written about the ACA quite a few times, but I would like to write about it in perhaps an entirely different context than you’re used to now that the biggest change mandated by the law is here. Just to see the contrast, I’ll mention that Jann Bellamy has written about the ACA in the context of how provisions have been inserted by promoters of “complementary and alternative medicine” (CAM) could potentially provide an “in” for requiring reimbursement of CAM practitioners for their services by insurance plans sold through the exchanges or even how CAM practitioners might promote themselves as primary care providers (PCPs) under Obamacare, as did Matt Roman. I myself warned about legislative meddling that might permit funding of religion-based health care in the exchanges, and Kimball Atwood sounded early warnings about insertion of the provisions that Jann warned about. Instead, view this discussion as a follow-up to a post I did almost a year ago that used a statement by Mitt Romney during the height of the Presidential campaign as a jumping off point to look at the relationship between health insurance status and mortality. While we at SBM try to remain more or less apolitical, in some cases (licensing of naturopaths, for example) it is not possible to disentangle science from politics, and we have to dive in. Also, politics is the art of the possible; so, policy-wise, what is best as determined by science might well not be what is possible politically.

The reason I wanted to revisit this topic is because of a political battle that went on for quite some time over the last several months to expand Medicaid in Michigan according to the dictates of the ACA. The reason that this battle is occurring in many states is because when the Supreme Court ruled last year that the individual mandate requiring that citizens have health insurance was Constitutional, one provision that it ruled unconstitutional was the mandatory expansion of Medicaid in states participating in the Medicaid program to cover all people under 65 up to 133% of the federal poverty level. States thus had to decide whether or not they would accept the Medicaid expansion. In our state, Governor Rick Snyder supported the expansion. Even though he is Republican, he is also a businessman and realized that it was a good deal, with the federal government covering 100% of the cost for the first three years and then phase down to 90% of the cost in 2020. The bill to expand Medicaid managed to pass the House of Representatives, but then it stalled in the Senate. Unfortunately—and this is what got me involved—my state Senator Patrick Colbeck led the opposition to the Medicaid expansion in the Senate, much to my chagrin and disappointment. His argument, which is being repeated elsewhere in the blogosphere, is that Medicaid is worthless and doesn’t improve health outcomes. Instead, he endorsed an alternative that (or so he claimed) places Medicaid-eligible patients into in essence low cost, high deductible concierge practices, with health savings accounts. This was a plan promoted by practices like BlueSky Health. Ultimately Mr. Colbeck lost, and Medicaid was expanded in Michigan in a plan that was characterized by John Z. Ayanian in this week’s New England Journal of Medicine as “a pragmatic pathway to link Republican and Democratic priorities for health care.”

However, the whole kerfuffle got me to thinking. In my post a year ago, I basically asked what the evidence was that access to health insurance improves health outcomes, but I didn’t really stratify the question into kinds of health insurance. Rather, I just looked at being uninsured versus having health insurance. After my little Facebook encounter with one of my elected representatives, I wondered what, exactly, was the state of evidence. So I decided to do this post. In the U.S., currently we have in essence three kinds of health insurance, broadly speaking: private insurance, Medicare, and Medicaid. Medicare, for those of our readers from other countries, is a plan that covers the medical care of people 65 and over and those receiving Social Security disability benefits. It is funded through payroll taxes and directly paid for by the federal government. Medicaid, in contrast, is a plan designed for low income people who fall below certain income levels. Also in contrast, it is jointly funded by the states and the federal government with each participating state administering the plan and having wide leeway to decide eligibility requirements within the limits of federal regulations that determine the minimal standards necessary for states to receive matching funds. Indeed, the loss of this leeway to determine the income level at which a person is eligible for Medicaid is one of the reasons the provision for Medicaid expansion was part of the Supreme Court challenge to the ACA. These days, most Medicaid plans hire private health maintenance organizations (HMOs) to provide insurance. Finally, what needs to be understood is that, compared to private insurance, Medicare reimbursement rates tend to be lower and Medicaid reimbursement rates are lower still, which is part of the reason why a lot of doctors don’t accept Medicaid. Increases in reimbursement under the ACA might well help this situation. (more…)

Posted in: Clinical Trials, Epidemiology, Politics and Regulation, Science and the Media

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