Columns » Ernest Dumas

Cheer the exchange, lament the higher cost



If you followed the tumult over implementing the part of health insurance reform that covers Arkansas's poor working people, the big Republican victory last week must have you fighting contrary impulses, whether to weep or cheer.

Cheer is the right reaction, unless you are one of those taxpayers who frets that the government is spending too much of your money on the freeloading poor who do not earn enough money to buy their own insurance. Then lamentations may be in order. The tax bill for insuring the working poor is going up, not down, thanks to the Republican initiative that Gov. Beebe last week persuaded the Obama administration to accept.

Before commiserating with the weepers, let's explain why, to most people, the Republican legislators have done a good thing, even if for the wrong reason.

Guaranteeing ready access to medical care for up to 250,000 low-income adults next January will be a huge gain for Arkansas, which has one of the unhealthiest populations in the country by every measure, and now that coverage seems nearly assured. Only 10 days ago, it appeared that a minority of the legislature, mostly Republicans, would stand in the way because they had run against "Obamacare" and vowed to block whatever part they could from taking effect in Arkansas.

They may still block insurance for that last segment of people, but that is a more remote prospect today. When the issue was whether to extend Medicaid to all adults below 138 percent of the poverty line — an option the U.S. Supreme Court said the states had — authorizing the expenditure of the federal grant funds to do that required the votes of three-fourths of the legislature. Republican leaders implied that if those people, rather than sign up for Medicaid, were required to buy insurance on the new exchanges like everyone else, even if the federal government paid the premiums, they might go along.

Beebe flew to Washington and took it up with Kathleen Sibelius, Obama's secretary of health and human services. Sure, she said, be our guest. House and Senate Republican leaders sounded jubilant.

Now, if the rank-and-file Republicans, including the tea-party contingent, will only go along.

There seemed to be a chance they wouldn't be needed. A majority passes enabling legislation that does not carry an appropriation, and if Washington and not the state dispensed the money to insurers, as in the case of the regular exchange, an appropriation would not be needed. State Department Human Services people believe Washington will send the money for premium support through the state, which would necessitate an appropriation and the three-fourths vote.

But no one knows for certain how the exchange will operate since Washington will essentially run it.

So the Republicans may have kicked over the obstacle to medical coverage that they had erected.

By now, everyone knows why universal coverage is a good thing: mainly healthier, productive people. The 100 percent reimbursement by the federal government for three years and 90 percent afterward will pull billions of dollars into the state, a robust stimulus for the economy and a healthy infusion of taxes for the state treasury.

Hospitals, which faced a financial crisis if the legislature blocked the Medicaid expansion, now will be even better off. So will doctors and other providers. They will be paid more for treating the poor through the exchanges than under Medicaid, which is the most tightly run medical insurance program in the country. Many doctors will not take Medicaid patients because they are paid so poorly.

The happiest of all should be the working poor. Their medical care will cost them no more than whatever copays the insurance policies or Medicaid will require, and the Medicaid stigma will be lifted. Every doctor should be happy to treat them because he will be paid the same for treating them as for his other patients.

Medicaid has always borne that stigma. The government always said, essentially, that if you treat the poor who are dependent on government you do not deserve as much money as when you minister to the well-to-do. But no longer in Arkansas, at least for this class of patients.

State administrators are happy because they will not have to deal with the nightmare of people switching back and forth between Medicaid and the exchange when their economic situations change.

Did I mention that the insurance industry is ecstatic?

Now, for those who hate the idea of any of your taxes going to treat low-income people, you may gnash your teeth over the Republican triumph. No one can be sure how much more it will cost to pay for their care through the exchanges rather than Medicaid, but you can be sure it will be at least 20 percent. For comparison, the government pays about 17 percent more for the elderly and disabled who take their Medicare through private Advantage plans rather than through straight Medicare. The differential will be much more for the private substitutes for Medicaid. Taxpayers will have to pay full reimbursement for the poor's care and then cover the insurance companies' much higher overhead and a profit of up to 20 percent.

But let's look on the bright side for once and thank the GOP.

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