Now that the healthcare reform law has been upheld, I think there are at least two areas where the states (including Indiana) have to take action.
One area is Medicaid expansion. As written, I think the law basically forced states into expanding their Medicaid program. It penalized states for not expanding their Medicaid programs by gutting (eliminating?) federal funding for their existing programs. One majority of the court held that this penalty was unconstitutionally coercive. A separate majority of the court held that the remedy for this unconstitutional coercion was, basically, to read it out of the statute. So, states don’t put their existing Medicaid programs at risk by declining to adopt the expansion.
The expansion itself provides for Medicaid coverage to individuals with income 133% of the poverty line or below. This is up from something like 65% currently along with a requirement that you meet one of the eligibility categories. (Broadly speaking – there are nuances.) The federal government would pay all of the expansion expenses for the first few years and then requiring the states to contribute incrementally more, up to 10% of the costs in 2020 and thereafter. Now states have to decide whether they want to take the 90% federal government match or not. From a pure state cost/benefit perspective, it’s tough to walk away. But, from a political perspective, I imagine that a lot of red states will turn away the federal money at the expense of their poorer citizens.
The other major state action I know about has to do with healthcare exchanges. I’m going from an explanation from an acquaintance whose opinion I trust. What the law mandates, as I understand it, is that each state (or group of states) create an insurance exchange. If they don’t, the federal government will do it for them. Each exchange must have at least two insurance companies competing in it, of which one must be a not for profit. If not, the federal government will create a not-for-profit mutual insurance company. Inaction will, therefore, lead to federal interference.
That expansion will cost Indiana an extra $2 billion per year. There’s only so much cash you can find under the couch.
If states are picking up 10% and your $2 billion/year figure is accurate, that would mean spending $2 billion to get your citizens $20 billion worth of coverage. Sounds like sound financial planning; particularly if your citizens are paying the federal side of the bill anyway – just not getting the services.
So raise taxes on those who can best afford it. Those who have more wealth than the per capita mean are not morally entitled to it anyway–they’re stealing it from those who have less, since all are fundamentally entitled to an equal share of the social wealth.
Wow.
An unequal distribution of social wealth has no place in a free society.
And what programs will you cut to make that $2 billion possible?
Where do you get $2 billion from? This story reports that the cost as $2 billion for the states together with $150 million/year paid by Missouri. Assuming a similar cost to Indiana, I’d support a tax of $23 per Hoosier per year or whatever that works out to; particularly if it leads to healthier Hoosiers and fewer of them using high dollar, low effectiveness treatment methods like emergency rooms that we end up paying for anyway.
Everyone will likely be going to Medicaid. I don’t see many companies, or even government agencies, keeping healthcare around. Why would any government agency provide healthcare, they don’t pay taxes anyways. Unless a company gets one of those prized waivers from the law, it will likely be cheaper to do away with the current healthcare plan.
The employees will then have to buy their own healthcare, which will be more costly since the law will demand everyone, including people with health issues costing hundreds of thousands of dollars be covered. People will be furious, and most won’t be able to afford any of the offerings, so they will demand government “do something.” This will bring about national healthcare. A step backwards in quality of care, as the taxation needed to provide the same level of care will be enormous and would cause serious issues (economic collapse, rioting, etc.).
Since this coming model will be funded almost entirely by income tax, many highly productive people are starting to reconsider their high paying jobs. Many folks who have assets in the bank, and could easily survive on half the pay, are considering doing what they want, not what they have to. This could be good for the economy, or it could be horrible. You might have people not willing to work 50-60 hours a week, weekends, holidays, night shifts, etc.., even though the jobs are good paying. The reason is because the take home pay will be substantially less than what it will be under the current tax code. Plus, many government jobs are going to see a massive exodus of employees. Once those hundreds of dollars per paycheck start coming out, if the pay and work isn’t worth it, and one has assets, much better to bail and do something else. Remember, less pay will equal less taxation, and possibly a job one loves without all the headaches, working weekends, working nights, traveling, working holidays, etc..
You will see a lot of productive folks with assets decide to go Galt.
I doubt the go Galt crap. I think this would be a better place if even one tenth of the Galters lived up to their threat. Good bye and good riddance. That ad hominem aside…
If employers drop their health insurance and employees have to buy into an exchange I’m not sure taxes will have to go. Say a family of 4 pays a monthly premium of $150 and their employer paid $900. Also, let’s say the employee kicked in $200 in a Health Savings Account(HSA) and the employer stopped kicking in their $100.
That’s $1,800 the employee has now to put into their health insurance plus $2,400 to cover out of pocket expenses, and about $12,000 the employer now has free. My feeling would be that the employer will just take that money and give it to the executives instead of giving the employee a nice raise. After all, employees are told over and over again that the overall compensation is salary and benefits.
If the employer increased the salary by that $10,000 and pocketed the rest, that is a pretty healthy salary increased that can be taxed. With no real net change in the money flowing into the health care system.
The problem is going to be what happens with all of that employer money that goes to health insurance. I don’t know the PPACA (you probably call it Obamacare) well enough to know about that.
Either way, the USA spends about twice as much as any other industrialized Western country with not much better outcomes.
There’s plenty of money sloshing around the system, we just need to make sure it is spent on medicine and not profits.
“I doubt the go Galt crap. I think this would be a better place if even one tenth of the Galters lived up to their threat. Good bye and good riddance. That ad hominem aside…”
It will all come down to those who have saved, or folks who live so frugal, that they don’t need their $60K/year job, they could make do on $30K/year. I’ve spoken to many people who would love to leave their current job, but the healthcare is an issue. You will be surprised how many folks maybe perfectly content running a bar code over a laser, cashing checks at the bank, or working in retail that they like (ie: Gun store, hardware store, craft store, electronics store, etc.).
As far as the money saved, that will be the key in this. If it is not given as a raise, employees will suffer greatly. There won’t be minimal savings. IU’s study said that of the $150,000,000 they spent on healthcare as a whole, only about $9,000,000 was for administrative costs. The remaining $141M went to hospitals, doctors, and medicine (drug companies, pharmacies). To have additional savings, hospital executives, doctors, and nurses will need to take pay cuts. Might be better just to federalize them all and make them all government employees….no one will be allowed to make more than the President of the US. Wage caps for upper level admin and wage cuts for those in the $60-$200K/year range will help reduce costs as well. Unless costs reduce, the plan for individuals will still be costly, and there is no guarantee that the money saved will be used for employee raises.
People have to realize the profiteering side of healthcare isn’t all that big. Unless IU is getting a hell of a deal, they proved that less than 9% is going to WellPoint type companies. I think nurses working night shift, holidays, and weekends would balk at calling their $65-$90K/year (depends on skills, OT, etc.) wages “profits.”
I just want full on nationalized healthcare. I could finally quit the job I do now and get something much more safer, less weekends working, no possible overnights, and likely some holidays off. Mostly, if I save up enough assets (a hundred grand or so, home paid off), I could always just quit whatever job I’m at and let others pay for my healthcare while I find the job I want, not any job that I need.
There are probably millions of Americans that are locked into a wage job because of healthcare. Many people would like to quit a job they dislike with benefits to work at a job that is more satisified. Like as a gunsmith or selling motorcycles. There are others that would like to be entrepenuers but cannot forego the employer-paid benefits. Universal healthcare could unlease a freshet of new economy activity and open up jobs for younger workers. And it would save the underemployed at 55 from exhausting their savings or going bankrupt because of unreimbursed medical care.
The numbers you share from IU and the admin expenses are impressive. 4.5 % is excellent. Do not discount that success. It is appoaching Medicare’s expense rate at 2-4%.
A tangent.
In 1980 the cost of US healthcare decoupled from the rest of the western world. Prior to 1980, US healthcare costs were on the high end of the world curve, similar to Canada.
What caused the decoupling and sent US cost curves on a higher trajectory is apparently not well understood. When I saw these figures a couple years ago, I first thought that the increase was maybe coterminous with the begining of repeal of hosptital certificate of need requirements. I never researched the issue, however.
Another explanation I have seen was with coming DRGs (diagnosis-related group hospital revenue), hospitals and aligned provider groups established ambulatory surgical centers were lower acuity patients could be addressed at a lower cost and higher margin. I have never seen that well researched, however.
But regardless of the cause, the costs of US healthcare began outstripping the costs of the rest of the world. HMOs had a bit of success, and I hoped in the early 1990s that they would stem increases.
Thinking about healthcare exchanges and the potential for employers to drop coverage and push employees onto exchanges, healthcare benefit delivery may be taking a 20 yo turn back to the Clinton Plan Healthcare Alliances. They would not have the market power that alliances would have had, at least at this point, but with enough members, market power might develop.
Interesting, also a natural path for companies to take.
http://www.latimes.com/business/la-fi-employers-opt-out-20120630,0,4778467.story
Interesting link. Thanks. With the ACA in place, it is worth considering how the market will react. First, we have chest pounding by Jindahl and Scott that they will not expand their Medicaid plans. Good luck trying that, the provider community will swamp Scott in Florida.
In 1980 the cost of US healthcare decoupled from the rest of the western world. Prior to 1980, US healthcare costs were on the high end of the world curve, similar to Canada.
What caused the decoupling and sent US cost curves on a higher trajectory is apparently not well understood. When I saw these figures a couple years ago, I first thought that the increase was maybe coterminous with the begining of repeal of hosptital certificate of need requirements. I never researched the issue, however.
Another explanation I have seen was with coming DRGs (diagnosis-related group hospital revenue), hospitals and aligned provider groups established ambulatory surgical centers were lower acuity patients could be addressed at a lower cost and higher margin. I have never seen that well researched, however.
But regardless of the cause, the costs of US healthcare began outstripping the costs of the rest of the world. HMOs had a bit of success, and many hoped in the early 1990s that they would stem increases. But an unholy alliance of plaintiff’s lawyers and the AMA (worried more about autonomy than income) managed to weaken managed care plans.
Thinking about healthcare exchanges and the potential for employers to drop coverage and push employees onto exchanges, healthcare benefit delivery may be taking a 20 yo turn back to the Clinton Plan Healthcare Alliances. The exchanges would not have the market power that alliances would have had, at least at this point, but with enough members, market power might develop. It will be interesting to watch.
There is a story in the IBJ (quoted in the Indiana Law Blog) about the Indiana Medicaid Expansion.
http://www.ibj.com/ruling-could-leave-290k-hoosiers-uncovered/PARAMS/article/35240
No less a political luminary than David Long, pro-tem of the Indiana senate checked some goat entrails and said this:
Because of those costs, the president pro tem of the Indiana Senate, Sen. David Long, R-Fort Wayne, said Indiana would “certainly” not expand its Medicaid program.
“Now, Hoosiers can avoid such a tax increase by the state opting out of Obamacare’s Medicaid mandate, which we will certainly do,” Long said in a statement after the Supreme Court handed down its ruling.
Daniels said the decision would fall not to him, but to the man that replaces him as governor in January and to the next Legislature.
John Gregg, the Democrat candidate for governor, issued a statement that did not address the Medicaid expansion issue.
Mike Pence, the Republican candidate to replace Daniels, stopped short of saying Indiana would not expand its Medicaid program, talking more about the flexibility that might be had under the new ruling
What a statement. Hoosiers can avoid a tax increase by pimping out hundreds of thousands of hoosiers and dumping their healthcare costs onto hospitals and other providers and those employers and individuals that purchase coverage.
I still beleive that the IHA and the IMA have the lobbying power to force the legislature to participate in the Medicaid expansion. Gasdsen Flags and misspelled words on placards at tea party rallies only go so far when massive political lobbies turn on their engines.