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Another look at ruling
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Last week we began an overview of the effects of the Supreme Court upholding much of the Affordable Care Act (ACA).  That decision upheld virtually all of the act except the mandatory expansion of Medicaid to cover more people (as a gauge, the income level set would cover families of four with up to $33,000 in income or 133 percent of the federal poverty rate.)

Georgia’s leaders face some decisions over the next few months that will be flavored by the outcome of the presidential election. These decisions come at a time when the state and the Department of Community Health are struggling to keep up with the rising costs of those already covered by Medicaid. There are 1.7 million children and adults presently enrolled in Medicaid and Peachcare, costing the state $2.6 billion yearly and being matched by $5.5 billion in federal funds.

The most recent estimates that came to light this past week show the state will have to add probably $300 million-plus in the FY13 amended budget and include at least that much and more for growth in FY14 to meet rising costs of those presently covered. So it is easy to see why leaders are uneasy about the whole Medicaid picture.

This column is certainly not the complete picture of the issues Georgia faces with the ACA but the three concerns below are issues that are immediate.

Three concerns
1. It is necessary to note that Georgia might face increased costs (estimates of $79 million in FY13 and $220 million in FY14) even if Medicaid expansion is rejected. As noted last week, the federal government will pay a large share of the cost of the newly eligible. But much of these projected state costs (at least in the next few years) would be a result of the “woodwork” effect.

Currently there are individuals who are eligible for Medicaid but choose not to participate. When the mandate goes into effect, many of these individuals are expected to join Medicaid (i.e., come out of the “woodwork”). These individuals would join Medicaid to avoid the penalty tax or because their employer drops coverage. These people would also not be covered at the enhanced rate and would need to be covered under the current financial arrangement with the federal government, (65 percent-35 percent).

2. The second concern involves the provider community. Georgia’s hospitals report that they lost an estimated $1.5 billion treating patients who do not pay for their services.

With an estimated one in three hospitals losing money every year, uncompensated care is a problem nationwide and led to a compromise reflected in the original ACA legislation. Hospitals and other providers agreed to take a reimbursement cut that will equal $155 billion over 10 years because of the belief that fewer uninsured patients would walk through their doors.

Providers are concerned that if Georgia opts out of the Medicaid expansion, they will receive less money for the services they currently perform and will also have to continue to deal with uninsured individuals.

3. The last concern involves a coverage gap between health insurance exchanges and Medicaid.  Starting in 2014, states (or the federal government if a state opts not to create one) will offer a health insurance exchange where individuals and businesses can go to purchase insurance. Those individuals making between 100 percent and 400 percent of federal poverty level (FPL) are eligible for subsidies from the federal government in order to make health insurance more affordable.

As mentioned above, Medicaid currently does not cover all people who are under 100 percent of the FPL and with the Supreme Court ruling, there would be a coverage gap for some who make under 100 percent of FPL and do not have health insurance. These individuals, based on prevailing opinion, would not be eligible to use the exchange, receive subsidies, or join Medicaid if the state did not choose to expand Medicaid.

Other issues might arise that complicate the decision of whether Georgia should opt in or opt out of the ACA. Ultimately, state leaders will have to decide what makes sense for Georgians.

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