Sunday, July 27, 2014

Obamacare court decisions and how they make WisGOP look even worse

This past week we had a decision by a DC appeals court striking down subsidies for Obamacare's federal health care exchanges, immediately followed by a Virginia appeals court that said the federal subsidies were OK. As for now, the subsidies stay on for those who bought insurance through the federal exchanges, but this is being appealed to higher courts, and seems destined to be decided by US Supreme Court, which is a scary proposition given this crew's recent record.

Wisconsin was one of those states that did not choose to set up a state exchange for insurance (and turned down $38 million dollars from the feds that would have helped set up the exchanges), so let's discuss what would happen if the Supremes do strike down the federal subsidies for the insurance exchanges. Jason Millman of the Washington Post notes that consumers would end up paying much higher costs for insurance, since most people who got insurance through the exchange were counting on the federal subsidies to help them pay for it.
The D.C. appellate court ruling in Halbig v. Burwell, that the federal government isn't authorized to administer insurance subsidies in the 36 states that refused to set up their own health insurance exchanges, is a major blow to the key feature that makes coverage affordable. Of the 5.4 million people who signed up for coverage in the 36 states with a federal exchange, 87 percent of them received federal subsidies to purchase insurance, according to the Obama administration. Those discounts, on average, meant those customers are paying about one-fourth of their actual premium, the Department of Health and Human Services reported.

The consulting firm Avalere Health calculated that those states by 2016 would forfeit about $36 billion in federal subsidies to purchase insurance. The impact would be much larger in some states — Mississippi, one of the poorest states, saw 94 percent of exchange enrollees qualify for subsidies. On average, premiums in these federal exchange states would increase 76 percent as a result of this decision, Avalere said.
You can click here to download the Avalere study, which estimates that Wisconsinites would be paying between 70-74% higher premiums if the Halbig decision were to stand, while neighboring Minnesota (who set up their own exchange) would have no change at all. So due to Gov Walker and WisGOP's TeaBagging of Obamacare, tens of thousands of Wisconsinites stand to see huge increases in what they'd have to pay for insurance, and many would not choose to be insured at all as a result.

And this is where I should note that the Affordable Care Act has been a significant success in places where it is has been fully implemented. A recent Gallup survey showed the uninsured rate has fallen from 18.0% in September 2013 to 13.1% at the end of June. But as the Urban Institute noted, the reduction in people uninsured is significantly more in states which expanded Medicaid and did their own implementation of Obamacare, compared to states like Wisconsin that did not.

But just because we have a Governor and Legislature that's trying to screw up the Affordable Care Act doesn't mean Wisconsinites aren't still seeing benefits from Obamacare. Wisconsinites are getting $2.6 million in rebates in the next week due to Obamacare rules regulating excessive profit and administrative costs by insurance companies. The Appeals Court decision doesn't affect this, but keep it in mind when you hear righties try to denigrate Obamacare, as there are many small things in it that have helped consumers beyond the increased ability to get health care services. Obamacare has also helped to lead to lower health care costs overall, and this is a part of the reason the Medicare trust fund's 100% fully-funded status was extended by another 4 years earlier this month, through 2030.

Let's go back to the questions about the federal insurance exchanges. We now know that less than 40% of Wisconsinites kicked off of BadgerCare by Walker's policies didn't get coverage through the exchanges, and the Halbig decision would blow that strategy apart even more, leaving nearly 25,000 Wisconsinites in the lurch, as they'd be unlikely to afford the insurance without the subsidies involved. It would also likely raise premiums for other health care recipients, because of lower levels of competition from the exchange and related complications. Of course, Walker's cynical strategy on Obamcare was that people either would get coverage (letting him off the hook for dumping them off of BadgerCare), or that Obamacare wouldn't work, which would allow GOPs a political advantage, and possibly get it removed before too many people got help and ended up liking it.

Now if the Supremes knock down the federal exchanges, you have the worst of all worlds- fewer people in Wisconsin covered, many others thrown into turmoil and uncertainty due to the burden of higher insurance costs, and a higher cost to state taxpayers (because of the refusal to accept expanded Medicaid). There will be demands to do something about it throughout the state, especially in low-income rural areas that are among the highest parts of Wisconsin that are in need of assistance for health care, which is not what Walker and WisGOP had in mind. Or we could elect a governor like Mary Burke, who would take Obamacare's expanded Medicaid funds, and elect Democrats into the Legislature who actually would work to save taxpayer dollars and cover more people, instead of the "more expense for less coverage" strategy that we've seen from WisGOP the last 3 years.

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