by Mitch Kokai
Senior Political Analyst, John Locke Foundation
It hasn’t been implemented yet, but the federal health care reform law is already failing, according to a new column from Ben Domenech of The Transom.
1. Kicking the Can on Deficits. The White House is admitting that Obamacare’s Medicaid expansion won’t work as promised. Sarah Kliff: “For decades now, Medicaid has sent states billions of dollars in something called Disproportionate Share, or DSH, payments. These funds, which totaled $11.3 billion in 2011, go to the hospitals that provide a higher level of uncompensated care and are meant to help offset the bills of the uninsured. At first, the health law appeared to make DSH payments unnecessary. When the Affordable Care Act expanded Medicaid to 17 million Americans, it would significantly reduce the burden of unpaid bills on health-care providers. The Supreme Court decision, however, changed the equation. It allowed states to opt out of the Medicaid expansion. Many Republican governors now say they won’t move forward on that program, which means that a lot of the unpaid bills will still exist. And that left hospitals clamoring for these DSH cuts to be reversed so they could continue covering the uncompensated care they provide. The White House budget essentially proposes something close to that: not reversing the DSH cuts, but delaying their implementation for one year.”
This is both what everyone predicted at the time, and it’s a stunning indication of how much the deficit savings under Obamacare continue to evaporate. Essentially the White House is kicking the greater reductions into the out years, counting on future Congresses to stop DSH payments – creating a likely “DSH-fix” scenario, just as we currently have with the “Doc Fix” on Medicare payments. As for states currently deciding whether to expand Medicaid, this step means the providers can no longer use these DSH payments as a justification for demanding expansion. These cuts were never real – now, the administration has admitted as much.
Domenech goes on to document failures linked to health insurance exchange costs and “premium shock.” It seems there is wisdom in steering clear of this program to the greatest extent possible.