Obama’s Re-election Entrenches PPACA

Regular readers at HealthLeaders Media will note that we general avoid political stories and commentary related to healthcare.

There are several reasons why, not the least of which is the saturated political coverage elsewhere on the Internet. Most importantly, however, is that people who work in healthcare and those of us who cover it understand that economics, not politics, is the primary force behind the reforms we are fumbling through.

Regardless of who had won Tuesday's presidential election, or which party controls Congress and state governments, the growing cost of healthcare, at two or three times the rate of inflation, requires that our elected leaders in both parties at state and federal levels help the rest of us to keep healthcare affordable.

So, what does the re-election of President Obama mean for healthcare reform? For the most part, it means a continuation and entrenchment of the Patient Protection and Affordable Care Act, aka "Obamacare."

Love it or hate it, this landmark expansion of healthcare coverage has proven itself as sturdy as a supersized bariatric chair.

Since it was passed in March 2010, the PPACA has survived town hall shriek-a-thons, the rise of the Tea Party, emphatic and bitter Republican opposition in Congress, the 2010 mid-term elections that became a referendum on the PPACA, the attempts in Congress to repeal it that followed, an unsuccessful Supreme Court challenge last June, and vows over the summer and fall by just about every Republican presidential and Congressional candidate to repeal it if elected.

And yet, the PPACA remains standing, even as many of its political foes have fallen by the wayside.

Regardless of whether or not you support it, "Obamacare" is the law of the land and it isn't going away. Most people who work in healthcare have already accepted that reality.

Still, there remain nettlesome issues that will likely soon become political flashpoints that,  depending upon a state's "Red" or "Blue" status, could leave healthcare providers in a lurch.

One big concern centers on states' efforts and their enthusiasm toward constructing health insurance exchanges that will allow consumers and small businesses to buy health insurance on the open market. The degree to which states are ready to implement these exchanges, which go into effect in 2014, varies wildly.

In May the Kaiser Family Foundation reported that 15 states would develop their own exchanges. Another Seven states said they had no plans to create exchanges, which means that the Department of Health and Human Services will step in to run the exchanges. Because a federal fallback plan is in place, the political intransigence of individual states should not be an insurmountable obstacle for the exchanges to operate.

The more pressing problem is with Medicaid.

Medicaid expansion
While the Supreme Court upheld key pieces of the PPACA in June, the justices struck down as overly coercive the federal government's demands that states expand their Medicaid rolls to millions of Americans who are now uninsured. With the high court's ruling, that expansion now becomes voluntary. At least six states have said they won't extend Medicaid, and another five states have signaled that they may not participate.

If that trend holds true, safety net hospitals estimate that they'll be smacked with about $53.3 billion in uncompensated care costs by 2019. That's because some states won't expand their Medicaid rolls even as the federal government cuts disproportionate share payments to safety nets as part of an agreement etched out in the ACA. 

Not unexpectedly, there are signs that the vehement opposition to expanding Medicaid rolls may be cracking. The Wall Street Journal reported in September that several states are looking at a partial expansion of their Medicaid rolls. Expect to read more stories like this in the coming months and years.

Because the individual mandate was upheld by the Supreme Court, Medicaid expansion has become the defining political flash point for Obamacare. In most states the problem will resolve itself as election year rhetoric cools and state-level politicians find themselves staring at the prospect of losing hundreds of millions of dollars in direct federal aid.

In most states, public pressure will mount and opposition will crumble as healthcare providers, advocates and patients bombard the media with heart-wrenching stories about the otherwise preventable pain and suffering inflicted upon their poorest and most vulnerable citizens who can't get Medicaid. Fiscal watchdogs will complain about the money left on the table.  

Resistance to Medicaid expansion may hold fast in Texas, Louisiana, and New Jersey, all of which have Republican governors who are expected to consider running for president in 2016.

However, even the most resolute opponent of Obamacare would be hard pressed to reject a windfall of federal dollars, especially as the rest of the nation comes to accept the notion that Obamacare is with us for good.