Medicaid Expansion Fits with Right to Health Care

Details: 08 March 2013

A cost-effective, human-needs policy opportunity not to be squandered or a cost-prohibitive financial obligation not to be undertaken?

In the interest of the common good, which view should Nebraska have of the option the federal Affordable Care Act offers for expanding health care coverage for thousands of low-income Nebraskans by means of Medicaid?

Assuming that LB 577 is advanced by the Health and Human Services Committee, the Nebraska Legislature is likely to make this decision before its session ends in June. The issue is complex. The debate won’t lack disagreement or intensity.

Medicaid is a federal-state partnership that provides health-care coverage for certain groups of people who meet means-tested eligibility requirements. Currently in Nebraska, Medicaid coverage is available for children; aged, blind and disabled adults; pregnant women, and a category of extremely impoverished parents. Childless adults are not eligible. Eligibility is primarily based on the federal poverty level (FPL) and family size. For example, parents of Medicaid-eligible children must make less than 47 percent of FPL in order to be eligible themselves; for a household of three, that’s about $11,000.

The ACA Medicaid option, as proposed by LB 577, would make a benchmark plan of health benefits, including behavioral health care, available to all Nebraskans earning less than 138 percent of FPL; approximately $15,500 for an individual and $27,000 for a family of three.

One significant aspect of this option is that it would address a gap in access to health insurance. As of 2014, in order to be eligible for subsidies and tax credits to purchase insurance on the yet-to-be established exchange, individuals will have to have household income of at least the poverty level. If Nebraska rejects the Medicaid-expansion option, thousands of adults—those without categorical eligibility plus those with incomes too high for status-quo Medicaid eligibility—will still be uninsured: no exchange; no Medicaid. Access to health care will continue to be severely limited, often delayed and often reliant upon expensive visits to hospital emergency rooms.

As a key element of the option for Medicaid expansion, the federal government is statutorily committed to pay 100 percent of the costs of services provided for the newly eligible in each of calendar years 2014, 2015 and 2016. The rate drops to 95 percent in 2017, to 94 percent in 2018, 93 percent in 2019 and 90 percent in 2020 and thereafter. Opponents of the expansion option say the Federal government cannot be trusted to keep that commitment and states will be left with unmanageable costs.

Cost is a complex, ongoing, legitimate issue, not only regarding Medicaid, but the health care system as a whole. But seemingly overlooked in the Medicaid-expansion debate is that the ACA also imposes billions of dollars of cuts in Medicare and Medicaid reimbursements otherwise paid to hospitals and other health-care providers, including those here in Nebraska to the tune of $856 million. The federal government is able to use these nationwide savings, as well as some other ACA revenue measures, to fund Medicaid expansion. Failure to enact LB 577 not only would reject a means of health-care coverage for thousands of currently uninsured Nebraskans, but it would squander participation in federal savings generated from Nebraska hospitals.

Bad debt incurred by health care providers, as well as their charity care, coupled with reduced compensation from Medicare and Medicaid, all affect the cost of private health insurance. Premiums paid for this insurance subsidize all other forms of health care, including emergency-room visits by the uninsured.

At the public hearing on LB 577 Feb. 28, nearly two dozen representatives of health care organizations and advocates for access to health care testified in support of the legislation. The Nebraska Catholic Conference, representing the mutual interests and concerns of the three Diocesan Bishops, was among the proponents. Excerpts from the testimony submitted on behalf of NCC follow. The testimony in full is accessible on the Conference’s website: www.nebcathcon.org.

"The tradition and approach of Catholic social teaching regarding health care are shaped by a fundamental principle: that every person has a right to adequate health care, a right that flows from the sanctity of human life and the inherent dignity of human beings, each one being made in the image of God….

"The Bishops’ Conference has concluded that the Medicaid-expansion option advances this important principle and promotes the common good. Expanding Medicaid eligibility will improve access and equity for many of those otherwise excluded, especially very-low-income adults. There is clearly a life improving, and in cases, life saving benefit to Medicaid coverage. Moreover, this expansion will mitigate other financial pressures throughout the health care system.

"We understand and appreciate that there are concerns about cost…. The robust public-policy discussion about cost control and improving outcomes throughout the health-care delivery system has been ongoing and must continue. Nevertheless, cost concerns alone cannot justify continuing to exclude so many vulnerable Nebraskans from access to health care, particularly in light of the available Medicaid coverage option."