JLF Memo
May. 16th, 2011: - johnlocke.org

Featured Article

Legislators file in support of Florida
By Joseph Coletti

North Carolina GOP legislators joined with their colleagues in Minnesota to file an amicus curiae brief with the federal 11th circuit court of appeals in support of 26 states' lawsuit against ObamaCare. The two groups of legislators argue that ObamaCare is a violation of the spending clause, short of coercion but still unconstitutional. Republican legislators discussed their filing in a press conference last week.

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Hatching a new plan for Medicaid
By Nicole Fisher

It's not new information that Medicaid costs and requirements are crippling state and federal budgets. What is new is that federal action is now being taken to repeal these burdensome requirements.

U.S. Senator Orrin Hatch (R-Utah) announced on May 3, 2011 Senate Bill 868, known as the State Flexibility Act. This novel piece of legislation introduced by the Senate Finance Committee is designed to repeal the Maintenance of Effort (MOE) requirements for Medicaid found in the Patient Protection and Affordable Care Act (PPACA), also known as ObamaCare.

The MOE provisions in section 5001(f) of PPACA force states to maintain "eligibility standards, methodologies, or procedures" under its state Medicaid plan, preventing flexibility and cost savings for states. This is because states are prohibited from decreasing Medicaid enrollment numbers or services offered under current PPACA legislation. However, millions of people will be added to the program thanks to PPACA, causing taxpayers and state budgets to suffer greatly under the weight of new expenses.

Presently, the CBO estimates that repealing the MOE requirements through the State Flexibility Act will save about $2.8 billion over the first four years and $2.1 billion in the years following. This translates into millions of dollars in savings for each state.

Although she did not lend her support to this particular bill, Health and Human Services Secretary Kathleen Sebelius has admitted that states need greater freedom to reform their individual Medicaid programs to better reflect and serve their states unique citizens. This admission has come after more than half of US states have resisted the strict guidelines imposed by PPACA, and called for autonomy.

The State Flexibility Act was created in the US Senate after governors from both sides of the isle requested that MOE requirements not be imposed on their states. Additionally, several states have submitted waivers to the federal government asking for exemption from the MOE provisions citing inability to meet or afford the obligations.

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WakeMed offers $750 million for Rex

WakeMed hospital made a $750 million cash bid for Rex Hospital, part of the state-owned UNC Health Care System. WakeMed claims it will help Rex's cash position. UNC President Tom Ross says "no," but the legislature has final approval and may consider selling Rex a good way to close part of state government's $2 billion shortfall. It could still run afoul of antitrust rules and state asset sales usually need an open bidding process. An open process would be good anyway and could bring in new bidders. Hospital consolidation often leads to higher prices for care, so this proposed merger runs into the same problems as Certificates of Need and Accountable Care Organizations (ACOs).

N&O finds a limit to government power in health care

The Raleigh News & Observer editorial board wrote, "Some Republicans in the General Assembly, perhaps not challenged enough by a crushing state budget deficit and the dire consequences for many working families, now have turned their attention to an effort to put government regulations in the middle of doctor-patient relationships and to use their power to curb individual rights of privacy." The editorial board is not talking about legislative support for ObamaCare, but to the "Woman's Right to Know Act" (H854) that would require a 24-hour waiting period before an abortion.

Maine opens its insurance market to cross-state competition

Maine's House of Representatives passed a package of health insurance reforms that will open up the insurance market in that state, so it looks more like a market, and should mean more affordable insurance for young adults. Mainers would be able to purchase insurance from other states, small businesses would be able to form larger purchasing groups, insurance rates could vary more by age, and the state would create a high-risk pool for people with expensive health care needs.

Upcoming Events

Friday, May. 20th, 2011 at 1:00pm-4:30pm
A Citizens' Constitutional Workshop in Franklin, N.C.
with presenters Dr. Troy Kickler & Dr. Michael Sanera
What the Founders and the State Ratification Conventions
Can Teach Us Today

Saturday, May. 21st, 2011 at 1:00pm-5:30pm
A Citizens' Constitution Workshop in Murphy, N.C.
with presenters Dr. Troy Kickler & Dr. Michael Sanera
What the Founders and the State Ratification Conventions
Can Teach Us Today

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