Even before the Patient Protection and Affordable Care Act (the "Act") was signed into law, lawmakers and health policy analysts in every state began trying to figure out what reform would mean for their state - the benefits and the costs. While the Act includes many different types of reform that would need to be considered carefully in order to really answer this question, the Medicaid reforms are generating a lot of attention because of the potential cost to states responsible for implementation. Specifically, the Act does several things to expand, improve and preserve existing Medicaid coverage. It redefines certain federal standards and criteria that states must implement.

This post gives a brief overview of the key reforms and then review some of the benefits and costs to states.

Key Medicaid Reforms

Medicaid is a program that is jointly funded by the federal and state government. The federal government establishes certain minimal standards with which states must comply, such as eligibility criteria, coverage mandates, and methods and criteria in setting provider reimbursement. States adminster the Medicaid program, and they have a great deal of discretion and authority to regulate all aspects of the program within these limits. States decide who can be covered, what services must be provided, and how much providers (physicians, hospitals, etc.) will be paid; however certain reforms limit states' discretion in these areas.

First, the Act expands Medicaid eligibility. With limited exceptions, states have only been required to cover people with disabilities, children, and pregnant women. States have always had the option to expand coverage voluntarily, subject to certain limits, but this was within their discretion. Beginning in 2014, however, states will be required to cover all individuals under age 65 with incomes no greater than 133% of the federal poverty level, guaranteeing coverage for "essential health benefits." This will help cover many people who are currently left out of the system - particularly nondisabled and childless adults. Second, the Act requires states to maintain current income eligiblity levels for children in Medicaid and the Children's Health Insurance Program (CHIP) until 2019.

Third, the Act increases Medicaid payments for primary care services provided by primary care doctors (physicians with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine) to 100% of the Medicare payment rates. This is important because many providers and patients have complained of inadequate reimbursement under Medicaid, and many physicians refuse to see Medicaid patients as a result. Medicaid coverage is not very useful, if there aren't enough physicians willing to treat Medicaid patients.

Notably, the federal government is also financing this expansion - more on this in the benefits discussion below.

The Benefits

First, it's important to note that Medicaid is voluntary for states; they are not required to participate in this program, but every state has chosen to do so. Presumably this is because of the federal matching funds that enable states to provide insurance to more people and support the health care infrastructure (especially hospitals) in underserved areas. I think it's fair to say that the federal funding of this expansion is very substantial: The federal government will pay 100% of the cost for covering newly eligble individuals for the first couple of years of the expansion, and then gradually reduce its share over time. It will also fully finance the increased payment rates for physicians for two years.

Medicaid expansion is viewed as an important part of the larger health reform bill, which many predict will bring significant financial benefits to states and improve overall health for its residents. States like California stand to benefit the most under these reforms because of the large numbers of uninsured, especially those with chronic conditions.

Finally, many states have already expanded Medicaid eligibility categories using provisions in federal law that encourage experimentation and allow some deviation from federal standards. These latest reforms simply reflect an approach already embraced by many states in theory and in practice, and provide greater funding to expand even further.

The Costs

State officials are understandably concerned about the price tag on these new coverage obligations, especially in light of the current budget crises many states are facing in this troubled economy. Indeed, many states, like California, have either enacted or tried to pass severe cuts to Medicaid and other public programs in response to these crises. In fact, Arizona just became the first state to completely eliminate its CHIP program to help close its deficit. Arizona did this despite the fact that the program costs Arizona $18 million annually, while federal matching funds cover $56 million, according to the Bureau of National Affairs. It's also unclear what effect this will have on future federal funding in light of the Act's requirement to maintain current income eligilibity levels for children.

Ironically, the increased cost that states fear immediately is not from Medicaid expansion, but rather from the new individual mandate to purchase insurance. States are worried that the mandate will cause an influx of new Medicaid beneficiaries who were eligible for Medicaid coverage under the old system, but who never signed up. The cost of these new patients will be significant because the federal government is only fully subsidizing the newly eligible; for new Medicaid beneficiaries who were eligible under the prior system, the federal government will only pay the usual amount of matching funds. In other words, states are worried that they cannot afford to cover patients that they already had a legal duty to cover.

The Fallout

Politically, some of these concerns are being used by Republicans to continue the fight they lost in Congress - they are looking for ways to avoid complying with Medicaid and other health care reforms - either through state legislation or litigation challenging the reforms in court. In my next post, I'll explain why these Medicaid reforms are clearly constitutional.

Whle the budget crises that many states are facing should not be underestimated, too often states and local governments respond in ways that are penny-wise and pound-foolish -- making cuts that look significant on paper, but actually cost much more in the long term. As noted in my prior post, limiting public benefits costs money and lives: the uninsured are much less likely to get regular care that could prevent more costly and serious illness or disability. And they are more likely to rely on emergency rooms for chronic illness that could be managed more cheaply. Local governments, hospitals, and other patients bear this cost. As states try to weigh the costs of their new Medicaid obligations against the benefits of greater coverage, they should consider these benefits carefully.

Unfortunately, the Medicaid program has always reflected a tension between the legal promises of health care and the reality of access limited by dwindling resources. The debate about the new Medicaid reforms simply highlights this tension.

The Patient Protection and Affordable Care Act recently signed into law by President Obama builds on the existing public and private financing system to increase the number of people who can afford insurance, and thus access care. One way it does this is by expanding the existing Medicaid program to cover more people.

Medicaid was enacted in 1965, and it is a jointly funded, federal-state program designed to improve health care access for certain groups who demonstrate economic need. The federal government establishes certain minimal standards with which states must comply, such as eligilibility criteria, coverage mandates, and reimbursement methods; but states administer the program, and they have a great deal of discretion and authority to regulate all aspects of the program within these limits.

Generally, states participating in Medicaid have only been required to cover certain groups of people: people with disabilities, pregnant women, and children, with incomes below a certain level. Medicaid is also available as a supplement for low-income Medicare beneficiaries. (Medicare is the federal insurance program that covers the aged and people with disabilities).

Why only mandate Medicaid coverage for these groups? Historically, these groups were viewed as "deserving" -- they were seen as needing help through no fault of their own, and many felt that society had a moral duty to ensure their well-being. However, these eligibility criteria have long been criticized by health policy experts, patients' advocates, and many state and local lawmakers as too narrow.

First, they exclude categories of people who do not appear any less deserving of help. For example, our society values and encourages work, yet Medicaid has excluded nondisabled and childless adults who are capable of working and have worked, but were unable to get insurance due to no fault of their own. These groups tend to be priced out of the individual insurance market, and they often work for small employers, do seasonal work, or have part-time jobs that do not offer the more affordable group health insurance. Many of the "working poor" don't make enough to afford insurance even when it is provided.

Second, the notion that certain types of people are more deserving than others when it comes to health care access is a controversial and morally problematic basis on which to make policy decisions. Increasingly, we hear policy and lawmakers talking about how important it is that everyone have health care, and acknowledging the reality that rising costs create a significant barrier to care for people who want to buy insurance.

Finally, limiting eligibility for public insurance may save the government money in the short term, but it actually costs society much more in the long run. The uninsured are much less likely to get regular care that could prevent more costly and serious illness or disability. Inadequately managed care increases work absenteeism and interferes with one's mental ability to focus and be productive generally. And the uninsured are more likely to rely on emergency rooms for chronic illness that could be managed much more cheaply by a primary care provider, specialist, or outpatient center. Local governments, hospitals, and other patients bear this cost.

For these reasons, many states have already expanded Medicaid coverage beyond the required categores based on provisions in federal law that give states discretion to do this. Nonetheless, gaping holes in the public safety net still exist. The Medicaid expansion in the Act is good news because it helps patch up one of these holes. Beginning in 2014, all individuals under age 65 and with income up to 133% of the federal poverty level will be eligible for Medicaid coverage. This is important because even with the new insurance reforms and subsidies, this group probably will still not be able to afford private insurance.

Essentially, Medicaid is their "public option."

President Obama just signed into law the Patient Protection and Affordable Care Act -- one of the most significant health reform measures since enactment of Medicare and Medicaid.

This Act attempts to build on our existing health care system by significantly expanding Medicaid, giving Medicare beneficiaries better prescription drug coverage, and increasing consumers' access to affordable, quality health insurance. Among the most important provisions in the bill are legal rules that remove existing barriers to health insurance. Plans will no longer be able to deny people insurance on the basis of preexisting conditions, terminate coverage when an insured turns out to be high risk, or set annual or lifetime limits on benefits. Children can stay on their parents' insurance until age 26, and government regulators will have more authority to review and regulate insurance rates to prevent unreasonable rate hikes, like the recent one by Anthem Blue Cross in California (the one that reinvigorated the health reform bill everyone thought was dead). And there are many other consumer protections, as well as promises of government subsidies to help some people pay for insurance.

Immediately after the law's enactment, state lawmakers opposed to it began mounting local political challenges and filed a law suit challenging the law's constitutionality. In later posts, I will address the details of these challenges and why I think they will probably fail. But for now I want to address the most common fear given for opposing the law -- a fear of "goverment takeover" of health care - the concern that government is getting too big and doing too much in ways that will jeopardize quality and access in the private health care market.

This fear is very confusing for a number of reasons. First, the federal and state governments have been intensely involved in the design and financing of health care for quite some time. Much of this may not be visible to patients, but this is certainly clear to the state lawmakers and health care providers (including managed care plans) that depend on this help. States and health care providers, especially hospitals, get massive amounts of federal funding - directly and indirectly. Surely, the federal government not only has a right, but a duty on behalf of citizens, to ensure that recipients of these funds try to expand health care access. Fears of "big government" seem surface when the federal government increases consumer protections and accountability with respect to the amount and quality of care being provided; yet such fears do not seem to inhibit demands for federal funding or support.

Second, many of the protections we have now - things we now take as a given - only came about because of government intervention. Racial minorities, women, and people with disabilities were routinely denied health care and insurance before federal antidiscrimination laws were enacted. For decades, many people were also refused care by some hospital emergency rooms, resulting in death or permanent injury. States did not do a good job of protecting consumers, so Congress passed EMTALA, which requires hospitals receiving Medicare (essentially all hospitals) to screen and stabilize every patient who comes to the emergency room, regardless of ability to pay. This is why everyone is entitled to care for emergency treatment. Finally, the federal government has enacted important, though limited, protections in the private insurance market. Most people are able to afford insurance through employment because of federal tax incentives and antidiscrimination protections for people buying group policies. And people can change jobs freely, without fear of losing coverage or having a condition excluded, because of the COBRA subsidies and portability protections Congress enacted in 1996.

The reality is that legal protection and government regulators play a critical role in helping people access the health care they need. And despite heated rhetoric by the opponents of reform, there is a growing recognition of the importance of legal protections and legal help in improving health care access and outcomes. In fact, the LA Times and NY Times recently published articles highlighting this trend, and describing the evolution of partnerships between medical professionals, lawyers, and communities who use legal tools to improve health.

Doctors understand that medicine alone cannot improve some patients' health. Socioeconomic factors, such as unhealthy living conditions, homelessness, discrimination by employers and insurers, and lack of resources, impede patients' ability to get care and stay healthy. Increasingly we see medical-legal partnerships popping up around the country to address these barriers: attorneys are embedded in community clinics and medical centers, and they work with doctors and patients to identify health-related problems that require legal solutions.

Sometimes, the legal help is pretty straightforward. For example, a patient may not have the money to pay for treatment, but the patient either had trouble getting public benefits or didn't realize he was entitled to them. An attorney can help that patient get the insurance he needs in order to get regular medical care. Other times, the need may be more complex. For example, the LA Times article profiled a doctor who became frustrated when medical treatment did not prevent the asthma and respiratory problems that plagued one of his patients. Her problems were caused by infestation and mold in her apartment. The doctor sent her down the hall to talk to an attorney who was on-site to help patients facing precisely these kinds of problems. The attorney, knowledgeable about housing law and health regulations, contacted both the landlord and the LA Housing Department; this improved the patient's living conditions, which ultimately improved her health.

The Patient Protection and Affordable Care Act is an important step toward expanding access to care by creating more robust legal protections for consumers in the private health care market, and attacking the inequality and other barriers that can impede health care access and good health outcomes. But enactment is only a first step. As the recent articles on medical-legal partnerships show, lawyers and other patient advocates also have a critical role to play in ensuring that these goals are realized. Rather than worrying about too much government, patients' advocates will be watching to make sure that government is doing enough to live up to its promises. They will monitor federal and state regulatory agencies responsible for implementing these new protections to make sure that they are effectively protecting consumers, they will educate patients and insureds about their new rights, and they will use legal tools to help protect these rights when necessary.

As the LA Times noted in its recent article, "sometimes good legal help is the best medicine." Only time will tell how effective this latest dose of legal medicine will be.

Health Care Justice Blog is about the injustice and inequity in our health care system that harms people every day, but does not necessarily get the public attention it deserves.

The public debate about health care focuses on how to get more people covered by health insurance: the implicit assumption is that insurance coverage equals health care access. While insurance is a critical tool for ensuring health care access, health care injustice is a much broader problem that harms the insured and uninsured in numerous ways:

• Private insurance does not necessarily guarantee health care access because of bad faith denials, illegal rescissions (retroactive termination), discrimination, and the sale of "junk insurance" policies that leave patients with medical debt and unable to get necessary care.


• Women, LGBT people, and people with mental health conditions, developmental disabilities, and HIV/AIDS are routinely discriminated against by insurers and some medical providers.


• Hospital closures, physician flight, and government funding cuts in underserved, predominantly minority communities, mean that racial and ethnic minorities have a more difficult time accessing care regardless of insurance status.


• Ironically, the only groups with a "constitutional right" to health care — those in prison and civil detention centers — too often are denied medically necessary care which results in severe and prolonged pain, disability, or even death.


• The uninsured have significant barriers to health care, but federal and state laws provide some help. For example, nonprofit hospitals have "charitable obligations" to provide free or discounted care, but many patients don't know about this help or how to access it.


• Existing health care, antidiscrimination, and charitable trust laws create minimal access and quality standards for all communities. Unfortunately, these laws are routinely ignored by the government regulators responsible for their enforcement.

Achieving health care justice requires more than simply expanding insurance coverage. It also requires: a financing and delivery system that is capable of providing timely care in a nondiscriminatory manner; a legal system that is willing to enforce health care, charitable trust, and antidiscrimination laws aggressively; and communities that are knowledgeable about their health care and civil rights.
This Blog does a number of things. It explains what kind of injustices exist in the private health care market and the public safety net; explores the extent to which federal, state or local laws provide tools for improving health care access; and identifies the gaps in existing health care law, enforcement practices, and policies that exacerbate access problems. Health Care Justice Blog offers news analysis, legal commentary, and notable health reform and policy developments. It also provides resources for individuals, lawyers, and policymakers — check out the links on the right. Finally, you can share your own experiences by posting a "Testimonial" — click on the link in the upper right hand corner.

I hope you find this site interesting and useful. I welcome any suggestions or comments.