The U.S. Supreme Court’s decision in June to uphold the most controversial part of the Affordable Care Act (ACA) – the “mandate” requiring individuals to buy health insurance – was both historic and a critical victory for those battling to achieve universal health care in the United States.
However, while most of the public’s attention has rightly focused on the court’s determination that the federal government can indeed require us to buy health insurance, this wasn’t the only provision in the ACA that opponents argued was unconstitutional: They also claimed that the ACA’s expansion of Medicaid to more of the nation’s poor coerced states’ participation by setting the penalty for nonparticipation too high.
The court agreed. Now each state has the choice of whether or not to expand Medicaid coverage within its jurisdiction without this decision affecting the original Medicaid dollars sent to it by the federal government.
Less attention has been paid to this second ruling. But at least in the short run, in terms of expanded heath care coverage, this ruling could turn out to have a larger impact.
As reported in Sunday’s News Tribune (“Medicaid debate likely to be big one in Olympia”), Washington state’s decision over whether or not to participate in the upcoming Medicaid expansion, slated to begin in 2014, will affect somewhere between 400,000 and 1 million of our state’s poorest citizens.
Figuring out whether or not the state should participate in this expansion requires understanding the convoluted nature of the ACA. More precisely, it involves grasping the complicated nature of our very porous health care system.
The ACA represented a reasonable attempt to plug holes in our health care system so that just about everyone has access to affordable health care insurance. The alternative ways to achieve this, by either dramatically scaling back the autonomy of private health insurance companies or significantly increasing publicly provided insurance – the two alternatives used in just about every other country in the world – are both politically unfeasible in our country.
The ACA thus entails a politically palatable but hodgepodge combination of both: new restrictions on private insurance companies (coupled with the individual mandate) and an expansion of public insurance.
To expand coverage, the ACA relies on a combination of various carrots. But the Supreme Court’s decision to strike down the ACA requirement that each state participate in the Medicaid expansion or forgo all Medicaid dollars (with participation entailing a 90/10 federal/state cost sharing arrangement for the new Medicaid enrollees) could conceivably leave 11 million citizens without health insurance.
Aside from expanding Medicaid, the ACA includes other carrots for increasing health insurance coverage. Second in order of importance, it provides uninsured families and individuals with income-based subsidies to purchase insurance. But the oddity is that under the ACA, people with income below the poverty line ($23,000 for a family of four) are not eligible for this subsidy. The reason is that originally under the ACA, everyone below the poverty line would be covered under the Medicaid expansion and so wouldn’t need a subsidy – until, that is, the Supreme Court made states’ participation in this expansion optional.
If Olympia follows the threat of Austin and Tallahassee – threats undoubtedly motivated by partisan politics rather than the best interests of their citizens – and opts out of the Medicaid expansion, thereby saving Washington citizens 10 percent of the cost of providing our poorest citizens with health insurance, we’d do so at the cost of leaving them without any reasonable hope of securing health insurance. And according to the TNT article, it’s a real possibility the Legislature will indeed opt out.
It’s in this sense that in the short run the second Supreme Court decision may wind up more influential than its more publicized decision to uphold the individual mandate.
But let’s hope it doesn’t.Katie Baird is an associate professor of economics at the University of Washington Tacoma. Email her at firstname.lastname@example.org.