20601A-WFNZ-the-fan-Final2 35h_CBSSportsRad_1660AM

News Home

Could Enforcing Obamacare Result In A Negative Medicaid ‘Ripple Effect’?

By Candice Leigh Helfand
View Comments
File photo of doctor. (Photo by Joe Raedle/Getty Images)

File photo of doctor. (Photo by Joe Raedle/Getty Images)

Get Breaking News First

Receive News, Politics, and Entertainment Headlines Each Morning.
Sign Up

CHARLOTTE (CBS Charlotte) – Though not a focal point of last night’s town hall debate between President Barack Obama and Republican candidate Mitt Romney, health care has all the same been a contentious subject which has played a significant role in American discourse leading up to the election.

The subject was broached on Romney’s official campaign website, where he noted that he’s in favor of block grants for Medicaid, as well as “limit[ing] federal standards and requirements on both private insurance and Medicaid coverage.”

During his speech at the 2012 Democratic National Convention in Charlotte, former President Bill Clinton mentioned Romney’s stance on Medicaid, the means-tested health care program run jointly by federal and state governments that caters largely to low-income families.

“[Romney] … want[s] to block-grant Medicaid, and cut it by a third over the coming ten years. Of course, that’s going to really hurt a lot of poor kids,” he was quoted as saying in his speech. “But that’s not all. Lot of folks don’t know it, but nearly two-thirds of Medicaid is spent on nursing home care for Medicare seniors … who are eligible for Medicaid.”

Romney has also vowed to repeal Obamacare, known formally as the Patient Protection and Affordable Care Act, as fast as possible after assuming office. But if Obama is re-elected, the PPACA will stay, with much of the legislation therein taking effect by January of 2014.

But according to two health policy experts, the PPACA could prove catastrophic for the nation’s Medicaid program – and the health of the American populace.

Brandon Clark and Jim Frogue, co-founders of the government relations and consulting firm FrogueClark, told CBS Charlotte that a potential series of ramifications could be set in motion by the PPACA’s Medicaid expansion affecting those applying for coverage through their state’s health insurance exchange.

“A lot of middle class individuals are going to apply for a state exchange… thinking they’re going to get a Blue Cross Blue Shield plan, or a United Plan, like they had before,” Clark said. “[But t]hey will find out they’re not on private health insurance, but rather, a state Medicaid program.”

He specifically referenced Section 1311(d)(4)(F) of the PPACA, which states that “if through screening of the application by the Exchange, the Exchange determines that such individuals are eligible for [Medicaid, State Children’s Health Insurance Program (CHIP), or] any such program, [the Exchange shall] enroll such individuals in such program.”

“A large number of families with family farms or small … businesses are going to go into their state health insurance exchange expecting to enroll in a traditional, commercial health insurance plan and end up on their state’s Medicaid program…” Clark said. “Because the law mandates the use of modified adjusted gross income, which includes numerous deductions, to determine eligibility, you could easily have a family of four or five making well over $50,000 per year ending up on Medicaid.”

Frogue said that the climate created from a dwindling number of families on Blue Cross Blue Shield and United would lead to dangerous results.

“The rates of families on Blue Cross Blue Shield or United will decline, and it’s unlikely doctors will want to continue seeing those people [on Medicaid] – it will create a ripple effect,” Frogue told CBS Charlotte. “There’s a physician shortage to begin with, and it’s just going to get worse.

He added: “The Medicaid program pays far less for services, from a routine check-up to a certain procedure. Where the Blue Cross Blue Shield plan would pay hundreds, Medicaid would only pay $55 or $65.”

Matt Salo, executive director of the National Association of Medicaid Directors, told CBS Charlotte that Medicaid has traditionally not paid providers well, resulting in weaker rated than Medicare or private providers.

But others such as Vivek H. Murthy, who serves as both a hospitalist at the Brigham and Women’s Hospital in Boston and the president and co-founder of Doctors for America, disagreed. Murthy said that the Medicaid expansion will benefit all concerned parties.

“A very important element of the [PPACA] is that more than half of people are projected to be insured through the Medicaid expansion – [it will be beneficial for] people who use Medicaid as patients or interact with it as physicians,” he said. “Medicaid does a lot of good for people who would otherwise have a very difficult time getting coverage.”

Murthy also told CBS Charlotte that he was skeptical of the notion of automatic enrollment, specifically how the provision would shift millions of citizens from private providers to government insurance without notification.

The U.S. Government Accountability Office also notes that the PPACA provides increased availability for Medicaid to greater portions of the American public. “[S]tates are responsible for making a number of changes to their Medicaid programs by January 1, 2014, including expanding eligibility levels and streamlining their enrollment processes,” the official website states. “Specifically, states must expand Medicaid eligibility to non-elderly individuals with incomes at or below 133 percent of [the Federal Poverty Line].”

The increase in eligibility could potentially inspire a positive shift in the kind of coverage offered by Medicaid, Salo said.

“Increasing the Medicaid rolls by 17 million and adding another 15-20 million covered lives through the exchanges, all of whom will be in private plans that pay doctors much better than Medicaid, will create enormous pressure on states to increase [Medicaid] rates across the board,” he explained.

But while Salo acknowledged the potential for Obamacare to alleviate issues involving the reimbursement for physicians, it could potentially exacerbate another national problem.

“In part this [issue] will be covered by a provision in the ACA that increases what Medicaid pays to primary care providers, but this increase ends in 2015, creating another ‘fiscal cliff’ that either the feds or the states or the providers will have to address,” he said.

Another potential problem stems from the penalties built in by the legislation that force employees to pay around $2,000 if their employer doesn’t provide coverage. For small businesses, this could be a significant issue, Frogue said.

“If an employer doesn’t provide coverage, the penalties amount to around $2,000 per employee. Under the legislation, small businesses could pay well over $16,000 to insure a family,” he told CBS Charlotte. “Do you want to pay $2,000 or $16,000? The argument is pretty easy, and anyone running a business would agree.”

He added: “The domino effect of employers [doing so] is that people get dumped into the exchange. People end up either paying money they had no idea they were going to pay, or end up on a welfare program [such as Medicaid].”

The other plan on the table, however – Romney’s block-grants – has Murthy equally as worried.

“We need an approach that ensures standards for coverage and overall quality of care, that states have to hit in order to get federal money,” he observed. “Block granting is a simple strategy for reducing federal spending that comes at the cost of increasing the number of uninsured Americans. It’s good for the federal budget books, but bad for people and bad for states.”

Murthy maintains a positive outlook on the future of healthcare under the recently passed legislation.

“The book is still being written, but I think we will see changes for the better [with the PPACA],” he opined.

Clark, however, feels that a lot of families could see negative effects stemming from the expansion over time.

“You’ll find that a lot of middle class individuals who are going to lose, not only in access to their current health insurance plan that they knew how to operate … but because they will have access to fewer than half of the physicians they previously had access to,” he concluded.

View Comments
blog comments powered by Disqus