States Take Different Paths After Supreme Court Ruling

States Take Different Paths After Supreme Court Ruling
August 7, 2012

Loren Heal

Loren Heal (loren.heal@gmail.com) is a research programmer at the University of Illinois at Urbana-... (read full bio)

States are taking very different attitudes toward implementation of President Obama’s health care law after it survived constitutionality tests thanks to Chief Justice John Roberts. Although some states see the Roberts decision as a green light to go forward, others understand the decision as giving them control over their imperiled budgets by allowing them to opt out of the President’s Medicaid expansion.

The Illinois Policy Institute released maps of states’ intention to implement exchanges and expand Medicaid, the two chief decisions facing them. Illinois Policy Institute Health Policy Analyst Jonathan Ingram said Massachusetts is likely to be among the most aggressive states, while Texas declines to participate altogether and Illinois struggles with fiscal problems. 

Illinois Struggles with Costs

Ingram says Illinois faces cost burdens which may prevent implementation.

“Legislation to create the exchange stalled in the spring, and legislative negotiations were suspended earlier this year in Illinois,” said Ingram. “Gov. Pat Quinn has said that he may try to set up an ObamaCare exchange through executive order, if the legislature refuses to do so, or he may try to set up a state-federal partnership exchange. Illinois simply doesn't have the money to run a new bureaucracy under federal control that will cost hundreds of millions of dollars every year.”

Quinn, a Democrat, recently told reporters he plans to implement Obama’s massive expansion of Medicaid. But “Quinn hasn't said where he plans to get the billions of state dollars needed for the expansion,” Ingram said.

“The Medicaid expansion,” Ingram explained, “is unaffordable and ultimately hurts the very people Medicaid was meant to protect. ObamaCare’s massive expansion of Medicaid would dump millions of new people into a broken system, forcing the most vulnerable to compete with millions of new people for appointments with fewer and fewer doctors willing to see them. The program is already failing to provide access to quality care for our neediest citizens. Adding millions of people to that failing program will only make things worse.

“Lawmakers in Illinois should join the growing chorus of lawmakers across the country refusing to opt-in to ObamaCare's voluntary expansion of Medicaid. The Supreme Court confirmed that the states are in fact separate and independent sovereigns. It's time we act like it,” Ingram concluded.

Texas Remains Defiant

Texas Republican Gov. Rick Perry sent a July 9 letter to HHS Secretary Kathleen Sebelius emphatically stating the state’s intention not to expend its resources implementing the administration’s policies, even after the Supreme Court found in favor of constitutionality.

“Texas is not likely to implement an exchange, or to expand its Medicaid program,” said Arlene Wohlgemuth, Executive Director of the Texas Public Policy Foundation.

A doctor in Texas, who prefers to stay anonymous out of fear of retribution, said he and his fellow physicians are concerned about their livelihoods under Obama’s law.

“The doctors are going to see decreased reimbursements. Already the number one concern of private practice doctors in Texas is, ‘How can I keep my office open with the current horrendous reimbursements from third party payers?’” said the doctor. “Contrary to the fairy tale in the Act, Medicaid reimbursements will not increase in the long term.”

Massachusetts Implements

Joshua Archambault, director of health care policy at the Pioneer Institute, said even though Obama’s law sets many rules at the federal level and offers little flexibility for the states, Massachusetts is planning to implement it.

“I expect Massachusetts to aggressively implement the Medicaid expansion and the Massachusetts Connector, which is what we call our state exchange. The Massachusetts Connector will look very different after implementation and Medicaid expansion than it does now,” said Archambault.

Archambault says because reimbursement rates in Medicaid remain far below what is necessary for doctors’ practices to remain open, providers will feel the pinch even as states strain to meet their portion of the Medicaid expansion.

“Most states in fiscal crisis now are there because of Medicaid,” Archambault said. “I think you’ll see a real budget-crunching approach as states decide how to go forward. A lot of that is because every state is different.”

According to Archambault, the Supreme Court may have decided the legal future of the law, but not the political future.

“There is a difference between being constitutional and being good policy,” said Archambault, “This ruling doesn’t decide the issue. There is still the Independent Payment Advisory Board. The states will have to decide on Medicaid expansion. There are issues with the Federal exchange subsidy that may make the law unviable. And there are still are some very big issues for providers.”

Loren Heal

Loren Heal (loren.heal@gmail.com) is a research programmer at the University of Illinois at Urbana-... (read full bio)