ObamaCare and Medicaid: What It Means for the States

1. ObamaCare and Medicaid:What It Means for the States Christie Herrera Director, Health and Human Services Task Force American Legislative Exchange Council Presentation before the Galen/IPI “Medicaid and the States” Hill Briefing Thursday, October 7, 2010

2. About ALEC • ALEC is the nation’s largest, nonpartisan membership association of state legislators. • ALEC has 1,600 legislators across the country, which is about 1/4 of all legislators nationwide, and 77 “alumni” members in Congress. • ALEC’s mission is to promote Jeffersonian principles in the states: free markets, individual liberty, limited government, and federalism. • ALEC promotes its principles through model legislation. In 2009, 10 states enacted health-related model legislation drafted by ALEC. Since 2005, 30 states have enacted ALEC health policy legislation.

3. ObamaCare and Medicaid: An Overview • ObamaCare and Medicaid: • What it means for the states • -Skyrocketing enrollment -Bloated budgets • -Restricted access to care • -Poor health outcomes • How states are fighting back • -Lawsuits • -Legislation • -Other strategies • What real reform looks like: Florida’s success story

4. ObamaCare = Skyrocketing Enrollment

5. ObamaCare = Bloated Budgets MEDICAID SPENDING PER CAPITA, FY 2007 Source: StateHealthFacts.org

6. ObamaCare = Bloated Budgets PERCENT OF BUDGET SPENT ON MEDICAID, FY 2008 Source: StateHealthFacts.org

7. ObamaCare = Big Cuts in Other Priorities Source: National Association of State Budget Officers

8. The Problem with Federal Funding • Federal money isn’t “free”—everyone pays federal, state, and local taxes. • It doesn’t cover everyone. One in four uninsured are already eligible for Medicaid, but not yet enrolled. When they do, states won’t get enhanced funding. • PPACA’s Medicaid “doc fix” fully subsidizes provider reimbursement rates up to Medicare levels until 2015—when states will face political pressure to pick up the tab. • Administrative costs add 5.5% to total benefit costs, so states are still on the hook even with enhanced federal funding. Sources: National Institute for Health Care Management Foundation, The Heritage Foundation

9. ObamaCare = Restricted Access • Medicaid is now the only option for low-income Americans. • 40% of doctors restricted access to Medicaid due to low reimbursement rates. • 50% of doctors accept new Medicaid patients compared with the 70% that accept new Medicare patients. • 2/3 of ER “frequent fliers” were covered by Medicaid/Medicare. • Medicaid patients are twice as likely as the uninsured, and five times as likely as the privately-insured, to be an ER “frequent flier.” • Medicaid patients are twice as likely as the uninsured, and four times as likely as the privately-insured, to use the ER. Sources: Office of Senator Tom Coburn, Annals of Emergency Medicine, National Center for Health Statistics

10. ObamaCare = Poor Health Outcomes • Medicaid patients who need surgery are 13% more likely to die than the uninsured, and 97% more likely to die than those with private insurance. • Medicaid patients are 50% more likely to die after bypass surgery because of poor follow-up care. • Medicaid patients with cancer are two to three times more likely to die from the disease. • Medicaid mothers received less prenatal care and hadhigher infant mortality rates than those with private insurance. • Florida: Medicaid patients are 31% more likely to have late-state breast cancer, and 81% more likely to have late-stage melanoma. Sources: Heartland Institute, Wall Street Journal, Office of Senator Tom Coburn, National Review Online

11. Fighting Back: Florida v. U.S. DHHS • + 16 AGs (FL, SC, NE, TX, UT, LA, AL, CO, PA, WA, ID, SD, IN, ND, AK, MI) • + Four governors (MS, AZ, NV, GA) and NFIB • March 23: Initial complaint filed in Northern District Court of FL • June 16: Feds file motion to dismiss • September 14: Oral arguments before Judge Roger Vinson • October 14: District Court decision on motion to dismiss • December 16: Hearing on summary judgment • MAJOR ARGUMENTS • Congress can’t compel the states to assume unfunded mandates levied in PPACA (Commerce/Guarantee Clauses) • The states can’t be commandeered to administer and fund the health insurance exchanges (10th Amendment) • The states can’t be forced to expand their Medicaid programs at significant cost to the states (Article I, Sections 2 and 9) • The individual mandate is unconstitutional (Commerce Clause)

12. Fighting Back: Legislation/Other • ALEC’s model Freedom of Choice in Health Care Act has been introduced or announced in 42 states • Six states enacted it statutorily: VA, ID, AZ, GA, LA, MO • Three states will have it on the ballot: AZ, OK, CO (petition initiative) • Resolutions against Medicaid expansion/unfunded mandates • Resolutions or study bills calling for Medicaid “opt-out” • Involvement in the rulemaking/comment process • Public conversations with stakeholders (Heineman)

13. Real Reform: Florida’s Medicaid Pilot • 2005: Medicaid reform pilot went live in Broward & Duval Co. • 2007: Medicaid reform pilot went live in Baker, Clay, Nassau Co. • Insurance companies compete in “Medicaid marketplace” • Beneficiaries get core benefits and choose “customized” ones • Workers can opt-out and get premium assistance for ESI • Healthy behaviors earn money in “Enhanced Benefit Accounts” • Multilingual “choice counselors” help beneficiaries pick a plan • THE RESULTS • Beneficiaries can choose from up to 12 competing plans • Plans are offering benefits not covered by Medicaid • 80% of benefit packages don’t require a copayment • 80% of beneficiaries are voluntarily choosing their own plan • 97% of beneficiaries are satisfied with choice counseling • Beneficiaries earn over $650k/month in Benefit Accounts Source: Florida Agency for Health Care Administration

14. Contact Us! Christie Herrera Director, Health and Human Services Task Force American Legislative Exchange Council 1101 Vermont Avenue, N.W. #1100 Washington, D.C. 20005 (202) 466-3800 christie@alec.org http://www.alec.org