RPC Reg Spotlight March 27, 2012

 

Regulatory Action in the Spotlight:

 

Expansion of Medicaid/Mandatory Coverage

 

Adverse Effects:

 

  • Rule will be costly for states to implement.
  • Will require a significant amount of paperwork hours.

 

Response of the Obama Administration:

 

The Centers for Medicare and Medicaid Services (CMS) officially published a 268-page final rule on expansion of Medicaid coverage on March 23, 2012 (RIN 0938-AQ62).  The rule implements several provisions of the Patient Protection and Affordable Care Act (PPACA) of 2010 and the Health Care and Education Reconciliation Act of 2010.  One of the major provisions is providing for an extension of Medicaid coverage to “non-pregnant individuals between 19 and 64 years old who are not otherwise eligible and enrolled for mandatory Medicaid coverage; are not entitled to or enrolled in Medicare; and have household income…at or below 133 percent of the Federal Poverty Line (FPL).”  These standards mean that an individual making $14,856, or a family of four making $30,656, will be eligible for Medicaid coverage. These regulations will be effective on January 1, 2014. 

 

The final rule seeks to make it easier for eligible Americans to enroll in Medicaid and the Children’s Health Insurance Program (CHIP) through coordinating interaction with the new Affordable (Health) Insurance Exchanges.  Acting CMS administrator Marilyn Tavenner stated that, “Today, too many uninsured Americans turn to the emergency room for care and can’t pay their bills. Insuring more Americans will decrease the hidden tax states and consumers with insurance pay to cover the cost of caring for the uninsured.” 

 

 

Impact on the United States:

 

This final rule is set to cost $580.19 million in uncompensated state costs and imposes a burden of 21,279,202 paperwork hours.  After substantial revisions to the final rule, CMS added an estimated 10 million additional paperwork hours.  The Medicaid expansion will bring an estimated 16 million additional Americans into the program.  According to a Regulatory Impact Analysis, the total increase in State coverage costs for FY 2012 through 2016 is estimated to be $14 billion.  Currently, 26 states are mounting a legal challenge of the Affordable Care Act’s requirement to expand Medicaid or face losing federal matching funds. 

 

 

In Closing:

 

Currently, many Medicaid patients have trouble finding a doctor who will accept them.  According to a 2009 Center for Studying Health System Change report, 28.2% of physicians do not accept new Medicaid patients, while 19.2% accept only some new Medicaid patients.  American Medical Association President Dr. Peter Carmel stated, “Most physicians are currently unable to accept Medicaid patients due to low reimbursement rates, and this problem must be addressed as new patients enter the program.”  There is concern that current Medicaid patients will have further reduced access to health care providers once the Medicaid expansion goes into effect.  As Grace-Marie Turner, president of the Galen Institute said, “Medicaid may give them insurance cards – good luck getting that care.” 

 

 

Relevant Legislation:

 

The House of Representatives passed H.R. 2, the Repealing the Job-Killing Health Care Law Act on January 19, 2011. On March 1, 2011 the Committee on Energy and Commerce held a hearing entitled “The Consequences of Obamacare: Impact on Medicaid and State Health Care Reform.”  At that hearing, Mississippi Governor Haley Barbour stated: “Governors will soon be forced with the choice to either cut state spending in other priority areas or to increase taxes to pay for the federally required expansion of the Medicaid program.”  On October 27, 2011, the House passed H.R. 2576, a bill introduced by Rep. Diane Black to close a loophole in the Patient Protection and Affordable Care Act (PPACA) that would allow some middle class Americans to receive Medicaid benefits.