President Obama has been reelected to another four-year term, the Democrats have the majority in the U.S. Senate and the Republicans retain control of the U.S. House of Representatives. Significant health care issues threaten our economic recovery, and similarly significant economic issues threaten our health care.
Those issues include: health care spending that exceeds the growth in GDP; impending cuts in Medicare payments to physicians of nearly 30 percent; and across-the-board 2 percent cuts, set to begin in 2013, to all Medicare providers. None of these matters will be resolved unless the president and Congress can work in a bipartisan manner now that the election is over.
We expect the Patient Protection and Affordable Care Act to continue to be implemented, with most remaining provisions to take effect Jan. 1, 2014. Major features still to be implemented include continued phasing out of annual and lifetime limits on coverage; prohibition against exclusion of coverage based upon preexisting illness; the corresponding requirement that all individuals have insurance coverage; a requirement for employers with more than 50 employees to offer insurance; expansion of Medicaid eligibility; and the implementation of health insurance exchanges in every state.
Idaho faces two major decisions, one of which is whether to expand the state’s Medicaid program.
The health care reform law required states to expand Medicaid to cover all persons whose income is at or below 133 percent of the federal poverty level. The U.S. Supreme Court has clarified that states may choose whether to participate in this Medicaid expansion. Expansion would add an estimated 110,000 more individuals to the Idaho Medicaid program.
The federal government would cover all of the Medicaid expansion costs for a period of three years and then taper its contribution down to 90 percent of the expansion costs by 2020. If Idaho chooses not to participate in the Medicaid expansion, those who would have been eligible for Medicaid under the expansion will remain uninsured.
Currently, health care provided to sick or injured people who have no insurance and cannot afford to pay for their own care may be covered by county indigency programs and the state catastrophic health care fund, known as the “Cat Fund.” If Idaho expands Medicaid, most county indigency and Cat Fund spending would be replaced with federal funds, reducing the tax burden on Idaho citizens.
Idaho’s second big choice is whether to have a state-run insurance exchange or default to the exchange the federal government will set up and run for states that choose not to have a state-run exchange.
A health insurance exchange is an online marketplace of various insurance options, including whether people qualify for Medicaid or for a subsidy to help cover the costs of insurance. The health care reform law provides subsidies for purchases through the health insurance exchange if the purchaser has an income under 400 percent of the federal poverty level. Only 25 percent of Idahoans have incomes too high to qualify for a subsidy, so there will likely be a high level of interest in using the exchange for health insurance.
If Idaho does not develop a state exchange either through a state agency or creation of a nonprofit, there will be a federal exchange. A federal exchange is highly unlikely to be responsive to the needs of Idahoans, because it will serve more than one state likely with a one-size-fits-all solution.
The governor has appointed working groups to examine these questions. At St. Luke’s, we know that health care costs are unsustainable and that the system needs to be fixed to best serve the people of Idaho. St. Luke’s is changing health care through innovative programs and early successes. With respect to the challenges we all face together, I believe Idahoans will be best served by Idaho solutions.
David Pate is president and CEO of St. Luke’s Health System.
