Christie HerreraDirector, Health and Human Services Task Force

American Legislative Exchange CouncilPresentation before the Galen/IPI “Medicaid and the States” Hill Briefing

Thursday, October 7, 2010

ObamaCare and Medicaid:What It Means for the States

About ALECAbout ALEC• ALEC is the nation’s largest, nonpartisan membership

association of state legislators.

• ALEC has 1,600 legislators across the country, which is about 1/4 of all legislators nationwide, and 77 “alumni” members in Congress.

• ALEC’s mission is to promote Jeffersonian principles in the states: free markets, individual liberty, limited government, and federalism.

• ALEC promotes its principles through model legislation. In 2009, 10 states enacted health-related model legislation drafted by ALEC. Since 2005, 30 states have enacted ALEC health policy legislation.

ObamaCare and Medicaid: An OverviewObamaCare and Medicaid: An Overview

• ObamaCare and Medicaid: What it means for the states -Skyrocketing enrollment

-Bloated budgets-Restricted access to care-Poor health outcomes

• How states are fighting back-Lawsuits

-Legislation-Other strategies

• What real reform looks like: Florida’s success story

ObamaCare = Skyrocketing EnrollmentObamaCare = Skyrocketing Enrollment

ObamaCare = Bloated BudgetsObamaCare = Bloated BudgetsMEDICAID SPENDING PER CAPITA, FY 2007

Source: StateHealthFacts.org

ObamaCare = Bloated BudgetsObamaCare = Bloated BudgetsPERCENT OF BUDGET SPENT ON MEDICAID, FY 2008

Source: StateHealthFacts.org

ObamaCare = Big Cuts in Other PrioritiesObamaCare = Big Cuts in Other Priorities

Source: National Association of State Budget Officers

The Problem with Federal FundingThe Problem with Federal Funding• Federal money isn’t “free”—

everyone pays federal, state, and local taxes.

• It doesn’t cover everyone. One in four uninsured are already eligible for Medicaid, but not yet enrolled. When they do, states won’t get enhanced funding.

• PPACA’s Medicaid “doc fix” fully subsidizes provider reimbursement rates up to Medicare levels until 2015—when states will face political pressure to pick up the tab.

• Administrative costs add 5.5% to total benefit costs, so states are still on the hook even with enhanced federal funding.

Sources: National Institute for Health Care Management Foundation,The Heritage Foundation

ObamaCare = Restricted AccessObamaCare = Restricted Access

• Medicaid is now the only option for low-income Americans.

• 40% of doctors restricted access to Medicaid due to low reimbursement rates.

• 50% of doctors accept new Medicaid patients compared with the 70% that accept new Medicare patients.

• 2/3 of ER “frequent fliers” were covered by Medicaid/Medicare.

• Medicaid patients are twice as likely as the uninsured, and five times as likely as the privately-insured, to be an ER “frequent flier.”

• Medicaid patients are twice as likely as the uninsured, and four times as likely as the privately-insured, to use the ER.

Sources: Office of Senator Tom Coburn, Annals of Emergency Medicine,National Center for Health Statistics

ObamaCare = Poor Health OutcomesObamaCare = Poor Health Outcomes

• Medicaid patients who need surgery are 13% more likely to die than the uninsured, and 97% more likely to die than those with private insurance.

• Medicaid patients are 50% more likely to die after bypass surgery because of poor follow-up care.

• Medicaid patients with cancer are two to three times more likely to die from the disease.

• Medicaid mothers received less prenatal care and had higher infant mortality rates than those with private insurance.

• Florida: Medicaid patients are 31% more likely to have late-state breast cancer, and 81% more likely to have late-stage melanoma.

Sources: Heartland Institute, Wall Street Journal,Office of Senator Tom Coburn, National Review Online

Fighting Back: Fighting Back: Florida v. U.S. DHHSFlorida v. U.S. DHHS+ 16 AGs (FL, SC, NE, TX, UT, LA, AL, CO, PA, WA, ID, SD, IN, ND, AK, MI)+ Four governors (MS, AZ, NV, GA) and NFIB• March 23: Initial complaint filed in Northern District Court of FL• June 16: Feds file motion to dismiss• September 14: Oral arguments before Judge Roger Vinson• October 14: District Court decision on motion to dismiss• December 16: Hearing on summary judgment

MAJOR ARGUMENTS• Congress can’t compel the states to assume unfunded

mandates levied in PPACA (Commerce/Guarantee Clauses)• The states can’t be commandeered to administer and fund the

health insurance exchanges (10th Amendment)• The states can’t be forced to expand their Medicaid programs

at significant cost to the states (Article I, Sections 2 and 9)• The individual mandate is unconstitutional (Commerce Clause)

Fighting Back: Legislation/OtherFighting Back: Legislation/Other• ALEC’s model Freedom of Choice in

Health Care Act has been introduced or announced in 42 states

• Six states enacted it statutorily: VA, ID, AZ, GA, LA, MO

• Three states will have it on the ballot: AZ, OK, CO (petition initiative)

• Resolutions against Medicaid expansion/unfunded mandates• Resolutions or study bills calling for Medicaid “opt-out”• Involvement in the rulemaking/comment process• Public conversations with stakeholders (Heineman)

Real Reform: Florida’s Medicaid PilotReal Reform: Florida’s Medicaid Pilot• 2005: Medicaid reform pilot went live in Broward & Duval Co.• 2007: Medicaid reform pilot went live in Baker, Clay, Nassau Co.• Insurance companies compete in “Medicaid marketplace”• Beneficiaries get core benefits and choose “customized” ones• Workers can opt-out and get premium assistance for ESI• Healthy behaviors earn money in “Enhanced Benefit Accounts”• Multilingual “choice counselors” help beneficiaries pick a plan

THE RESULTS• Beneficiaries can choose from up to 12 competing plans• Plans are offering benefits not covered by Medicaid• 80% of benefit packages don’t require a copayment• 80% of beneficiaries are voluntarily choosing their own plan• 97% of beneficiaries are satisfied with choice counseling• Beneficiaries earn over $650k/month in Benefit Accounts

Source: Florida Agency for Health Care Administration

Contact Us!Contact Us!

Christie HerreraDirector, Health and Human Services Task Force

American Legislative Exchange Council1101 Vermont Avenue, N.W. #1100

Washington, D.C. 20005(202) 466-3800

christie@alec.orghttp://www.alec.org