Exchanges, Expansions, and Secessions: Follow the Money


Ever sing the song “one of these things is not like the other” when you were a kid?  Let’s try it with three things Governor Bentley said this week.  First up:  Alabama won’t set up our own health insurance Exchange—we will let the feds handle it.  Second: Alabama won’t participate in the Medicaid Expansion intended to start in 2014—we won’t let the feds help us insure Alabama citizens below the poverty line because after 3 years we would start having to pitch in.  Third: the petition asking permission to peacefully secede from the United States (started by a colorful-sounding dude who got ticked off when his topless carwash got shut down) is, according to our Governor, “silly.”

At first, I thought the third pronouncement didn’t belong with the other two.  By foot-dragging every step of the way, we are engaging in continuous passive-aggressive secession already.  Kind of reminded me of a favorite parents’ book “Get out of my life, but first could you drive me and Cheryl to the mall?” But I think I was wrong.  All of these decisions are about money, and all of them result in the steady upward transfer of funds to those who already have plenty.  Even much of the federal money we receive eventually finds its way to the deepest pockets.

I’m not surprised by us bowing out of the Exchange.  The Exchange, for those of you who don’t know, is supposed to be a central marketplace for health insurance products up and running by 2014.  It will be a tremendous windfall for insurers who get a spot—free advertising, mandatory customers, and big federal subsidy bucks for premiums and out of pocket costs.  Since we are great lovers of both corporate incentives and federal handouts in Alabama, why on earth would Bentley bow out?  Part of it is simple grandstanding and playing to the secessionist base.  Bowing out doesn’t remove the incentives— it just gives Bentley a chance to make his symbolic stand, knowing they’ll get their money anyway. It may pay off for him in 2014.

He also won’t catch his share of the blame when the corporations do what corporations always do—maximize their profit at our expense.

Does it matter?  Alabama Arise thinks we need to talk him out of it.  If you agree, you have time to speak up, because HHS extended the deadline.  They have an easy way for you to get your message to our Governor here.  I’m not sure it will make much difference who runs our Exchange.  Insurers will have the bulk of influence on how things are set up, either way.  At state level, it might be more likely that our currently predominant insurer would continue to have the advantage.  At federal level, all the multi-state players would probably have more traction.  I doubt if the outcome will be much different for people who get stuck with one of these products.

The one qualm I have is the outcome of challenges to federally run exchanges.  Apparently the law was slightly misworded so that subsidies technically can’t be given unless an Exchange is run by the state.  The administration says everybody knows what it was supposed to mean, but some folks are counting on a challenge to be successful.  I haven’t found an article that directly quotes the miswritten section, but I think maybe it is Section 1311 d (1), which says “An Exchange shall be a governmental agency or nonprofit entity that is established by a State.”  Further on in Section 1321, there is a provision that if a state doesn’t do what it is supposed to, the Secretary of HHS will operate the Exchange.  If you know of a different glitch in the wording, let me know.

What about the Expansion?  That surprised me.  When SCOTUS first made their call this past summer, I was horrified at the meanness of finding a way to kick people who are already down.  Then I got reassured by friends who convinced me we would be forced, economically, to take the big federal money that accompanies the Expansion.  I also heard the hospitals were in favor of it.  Right now, hospitals get extra money to help compensate for the expense of caring for patients who can’t pay, but that is being drastically reduced over the next several years to account for the expected decrease in uninsured patients.  So I had expected the hospital lobby to be a strong factor in us getting the Expansion.

Apparently, they have figured out they don’t need this money, if this quote (see third page) from a hospital association representative accurately reflects the hospital lobby’s opinion. They “understand”—no objection in particular.  I would guess this may be the major reason Bentley went ahead with his announcement, along with the chance to look heroic to his topless carwash loving fans.  The formulas are complicated.  I have seen some discussion that no one was completely sure what the effects of not taking the Expansion would be, and that depending on what other states did, hospitals here might get MORE for maintaining a higher level of uncompensated care.  Which would also be in keeping with our tradition of whining about big government while raking in more than our share of federal subsidies.

The stated reasons (rarely the full story) are that he doesn’t agree with Medicaid in general, that we can’t afford it when we have to start putting in our share after three years of a free ride, and that we don’t have enough providers.  I don’t agree with Medicaid in general either and would of course rather see Medicare for All, but it is better than being left in the ditch.  I agree we probably wouldn’t be able to come up with our share in three years, given our history of poor-mouthing to the poor and sweet (incentive)-talking to the rich.

As far as insufficient providers go, we have some alternatives—we could allow independent practice of allied health professionals (I’ll have more about that later).  We could use the federal Expansion money to boost the healthcare economy and increase provider supply.  But there’s a nasty part of this provider shortage that didn’t make it into Bentley’s announcement.  It’s not just that this is like saying we don’t have enough food to feed all the bodies here, so we’ll let some die rather than accept truckloads of money to help grow crops.

It’s that even with the providers we have, too few accept Medicaid, about 68.5% in Alabama according to this study.  That study included specialists.  I would guess the percentage of primary care doctors accepting Medicaid in Alabama is lower, based on what I see locally.  Look here on the Madison County Medical Society page—pull up the number of pediatrician members who are taking new Medicaid patients (15) and then total pediatrician members (23).  Then pull up family medicine doctors taking new Medicaid (8) and total family medicine members (70).  Then internists taking new Medicaid (1) and total internists (30).  That’s only 19% of our primary care doctors here who belong to the county medical society and who are taking new Medicaid patients!  For doctors who see adults, only 16%.  We might not have enough doctors accepting Medicaid to meet the minimal federal standards for provision of care to adults who qualify.

What would fix this?  The even nastier possibility is that money alone might not do it.  In 2013 and 2014, primary care doctors will get paid by Medicaid at rates equal to Medicare rates (a big raise for us), because of the ACA.  I think that might pull more docs into the system, but unless I’m wrong, there will be holdouts.  All the docs who refuse Medicaid participation now could manage at least a small percentage of their practice already, if they really cared about the patients.  It would not kill them or bankrupt them to accept, say, 10 or 20% Medicaid.  When I talk to those doctors, they won’t say outright that they are uncomfortable with poor people.  They say the patients don’t come to appointments or don’t follow instructions, the same as they told this researcher.  They say there is too much paperwork.  But their faces say “I don’t know if I want them in my waiting room.”

We have some wonderful, heroic physicians in Alabama, including our Surgeon General.  But we also have too many who don’t take the Hippocratic Oath seriously. Some just try not to think about it and rationalize their choices.  Others go “concierge” and limit their practices to a small percentage of well-off patients, while they work as hard as they can to prevent other providers like nurse practitioners from filling in the gaps.

Should we push for the Medicaid Expansion?  I have heard Bentley might not be firmly decided.  It is probably worth trying to persuade him.  If the hospital lobby doesn’t find it compelling, I doubt we’ll get it.  Medicaid is better than being uninsured.  Doing the Expansion, while not a cure for health disparity, would give some partial relief to widespread misery.  But people with low incomes will never have real access to quality care unless their insurance cards look the same as those with private insurance.

Medicare for All would go a long way towards decreasing health disparity.  Will failure of the Medicaid Expansion be enough to create pressure for single payer?  Probably not.  The pain of poverty is already great and remains invisible.  Invisible enough so that many liberals celebrated the SCOTUS decision without taking time to mourn over the impact of gutting the Expansion.  Invisible enough so that some were willing to play chicken with Alabama’s Medicaid money for 2013 to make political points.  We will get real healthcare reform only when the middle class finally feels enough personal underinsurance pain to get fed up with being abused.

Is there an option in the meantime?  Maybe.  Is it possible we could persuade the President and Congress to subsidize private insurance coverage on the Exchanges for those who would have qualified for Medicaid, with zero co-pays and deductibles?  Not out of sympathy, but because the insurers would be thrilled to get that extra money and we rarely pass up a chance to support our corporate persons.  Remember that the mandate was dreamed up by the Heritage Foundation—they could come up with a way to make private insurance subsidies sound good, with enough insurer support.  Just call it a voucher—certain groups love that word—but make sure it is enough to cover the product.  It would be more expensive, probably at least 12% more, and that’s probably enough to make this idea a no-go. , and that’s probably enough to make this idea a no-go.  On the Exchange, individual and small group insurers are capped at 20% (edited) overhead and profit, compared to our state Medicaid at 3% overhead. But plans with large risk pools generally can get within 15%, and perhaps we could add regulation requiring 100% subsidized plans to stay within a 15% range.   That would be in line with the roughly 11% higher payouts to privately run Medicare Advantage plans compared to traditional Medicare.

I hate like the dickens to hand over more of our tax money to these corporations.  But I hate even more to see the people who struggle every day to keep their heads above water, the people who deliver our pizza and ring up our purchases and care for our children, be so utterly abandoned. They should at the least be able to access the same inferior products the rest of us can.   If we will not expand Medicaid, and if our doctors will not accept the responsibility to provide care without regard to social status and insurance type, subsidized private insurance is the only moral option until we have achieved real healthcare reform:  Everybody in, Nobody out.

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2 Comments

Filed under Healthcare reform, Medicaid

2 responses to “Exchanges, Expansions, and Secessions: Follow the Money

  1. Charles King

    Pippa

    This is great stuff. Call Me. we should have lunch.
    Charles

  2. BONNIE MIZERANY

    I think the only way that this state will take the Medicaid expansion is if enough people make the case of how this would help Alabama’s economy and how many jobs will be created. Sen Jeff Sessions has been quoted as saying this just welfare. Places like Walmart have about 70% of their work force on less than 32 hours a week so they cannot get health insurance. Just as 30% of the folks on food stamps are the working poor, the same would probably be true of Medicaid. The subsidies for hospitals for unreimbursed care will be cut by Obamacare and right now everyone with health insurance pays an average of $2000 to subsidize this care. I think if folks knew they were going to pay one way or the other, it might create some awareness. Just some thoughts – keep fighting.

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