A big hurdle was passed on June 28, when the Supreme Court decided that the Affordable Care Act was legal. After years of vitriol, fighting, malicious ad campaigns, exaggeration from all sides, and lawsuits, the court reaffirmed anticlimactically that the government has the right to tax its citizens.
The ACA is a very complicated law. It helps to break it down into three parts. Phase One is already under way. Phase Two, the part decided by the Supreme Court, includes mandatory health insurance and the now-optional Medicaid expansion. The last and potentially the best will be Phase Three – state innovation.
It is important to remember that the law has been in place since 2010 and that many provisions went into effect immediately. Three insurance provisions immediately became so popular that insurance companies announced they were keeping them whether the Supreme Court upheld or overturned the law. These popular provisions let dependents up to age 26 stay on their parents’ plans, mandate no “lifetime dollar limits,” and require insurance companies to pay for specific preventive health care and screenings without a co-payment.
Other Phase One provisions of the ACA that have been implemented include the expansion of community health centers, the National Health Service Corps, and increased funding for training nurses, doctors and other health professionals in exchange for their agreement to work in underserved communities. These expansions are critically important to New Mexico.
The ACA also funded needed expansions for New Mexico community health centers, allowing health centers to modernize, add new facilities and hire additional professional and support staff. With 135 locations across New Mexico, health centers provide care to nearly 300,000 of our neighbors every year. Sixty-seven percent of the patients live in rural and frontier parts of the state, and 91 percent are low income. Community health centers received this increase in funding because of the high quality of care they provide at a reasonable cost. Economists at George Washington University recently analyzed health center patient outcomes and determined that community health centers save the system $24 billion a year, primarily through disease management programs and enabling services, both of which prevent costly hospitalizations.
This next phase is the worst part of the ACA – it is the “insurancy” part and will come into effect in 2014. The only good part of Phase Two is that it will be followed by a very good Phase Three, state innovation. New Mexico is in Phase Two right now along with many other states. Information technology systems and health insurance exchange systems are being developed with federal grants. The exchange is where people will go to qualify for public insurance, receive subsidies to purchase private insurance, and/or purchase insurance directly.
Advocates wanted the insurance available in the exchange to be like Medicare, a national plan that provides a uniform set of benefits for all recipients. The ACA, in one of its worst provisions, sets up numerous tiers of benefits, services and fees. Sounding more like the Olympics than a health reform, insurance companies will be able to offer bronze, silver, gold and platinum level health plans. This is a further step backward from an equitable health care system.
This is the part of the law that was challenged in the Supreme Court by 26 state attorneys general. Many states felt that the federal government could not force individuals to buy health insurance, an ACA requirement known as the individual mandate. The opponents lost on this point because the court found that a tax could be imposed on individuals who do not have health coverage.
The states lost this point but won a much, much more important victory in their eyes. States won the right to refuse to expand Medicaid to every state resident at or below 133 percent of the poverty level – $14,856 a year for a single person – even though the federal government will pay 100 percent for this expansion. Most people at 133 percent of poverty work and pay taxes, but their employers refuse to provide health coverage or wages high enough for them to buy their own insurance.
Because of high poverty rates and the large number of working poor and self-employed low-income people, New Mexico Medicaid has already been providing coverage to many people at 133 percent of the poverty level and even higher. Increasing eligibility in 2014 – with 100 percent support from the federal government – will help the state budget and expand care to a large number of currently uninsured New Mexicans at the same time.
Potentially the best part of the ACA is Section 1332, the waiver for state innovation. This is the most important part of the law, a place where all sectors of the political spectrum can have a meeting of the minds. This section gives states the right to design just the system that will work most effectively in its jurisdiction while guaranteeing that national standards for access, quality and affordability are met.
This section is scheduled to go into effect by 2017. The state of Vermont has already passed legislation enacting a state-operated universal health care system, Green Mountain Care. The Vermont Congressional delegation is seeking to shorten the time until implementation.
Green Mountain Care will be able to provide more care through efficiency. With the state as the only insurer, paperwork will be reduced compared to a system with hundreds of insurers, each with their own rules. By reducing overhead and administration to the Medicare range of 3 to 4 percent, compared to the private sector’s overhead rate of 30-40 percent, savings will immediately be available to pay for care of the newly insured. For years, Vermont has led the way in universal coverage for children through the innovative state Dr. Dynasaur program. Building on this excellent foundation, Vermont is expected again to lead the nation, this time into a Medicare-for-all type program.
New Mexico stands to benefit from state innovation more than almost any other state. For many years, New Mexico did not have a private insurance market. The insurers did not like this and passed legislation that ran scarce Medicaid dollars through for-profit insurance corporations, wasting hundreds of millions on the insurers cut that could have been better used provide more health care.
Here is a little secret none of the insurance companies want you to know: Almost all insurance in New Mexico is paid for by the taxpayers! This is very different from most other states and is a result of the huge impact of government programs across the state – whether the Veterans Administration, Indian Health Service, Medicare or firefighters, taxpayers foot the bill for health care. For example, highly paid Los Alamos employees might believe that they have “private” insurance, but without federal and state funding, there wouldn’t be a Los Alamos National Laboratory. The same is true for other federal contractors who think they are in the private sector when actually they are on the public dole.
If New Mexico shows the same courage as Vermont and enacts a state-specific universal health plan, billions of dollars will be saved, millions of lives will be improved and we can move on to solving the other serious problems facing the state.
Carol Miller is a longtime public health advocate and lobbyist.