Clinton, Sebelius Promote Exchanges, Medicaid Expansion

Philadelphia—Six weeks before enrollment began for the new health insurance exchanges, US Department of Health & Human Services (HHS) Secretary Kathleen Sebelius traveled to Pennsylvania to encourage people to sign up for coverage and urge Pennsylvania state legislators to expand its Medicaid program.

Ms. Sebelius spoke about the Patient Protection and Affordable Care Act (ACA) before politicians and members of the local community gathered at Congreso, an organization that provides social, economic, education, and health services aimed toward the Latino community. Philadelphia Mayor Michael Nutter, a vocal critic of the state’s refusal to increase Medicaid enrollment, joined Ms. Sebelius at the event.

The visit was part of an itinerary that took Ms. Sebelius across the country to pitch the virtues of the ACA heading into next year, when most people will be required to purchase health insurance or be taxed. Among concerns that more people than expected will choose to pay the penalty rather than buy coverage, members of President Barack Obama’s administration are intent on getting people signed up, particularly young, healthy adults and residents of states such as Texas and Pennsylvania where the local governments are opposed to the ACA.

“Clearly this law will work better in states where everybody wants it to work,” Ms. Sebelius said. “It is more challenging when there is misinformation put out on a regular basis where you have to tell people, ‘Yes, the law indeed will apply to you.’”

Former President Bill Clinton, who attempted to introduce universal healthcare in the early 1990s, has also helped promote the ACA. During a 50-minute speech in Arkansas on September 4, which was broadcast live on the White House’s website, Mr. Clinton urged people to sign up for coverage and explained the law’s provisions.

Although the Supreme Court upheld the constitutionality of the ACA last June and numerous attempts to repeal the legislation have failed, surveys indicate that many people have not kept up with news regarding the law. An August poll from the Kaiser Family Foundation found that 44% of respondents were unaware of the current status of the ACA, including 8% who thought Congress had repealed the law and 5% who believed the Supreme Court had overturned the legislation.

Some Republicans and conservative groups have continued to buy advertisements and campaign against the ACA. They hope to defund or delay certain provisions.

“There is a tremendous amount of confusion and ignorance out there,” Timothy Jost, a law professor at Washington and Lee University and author of several healthcare law books, said in an interview with First Report Managed Care. “It is a real uphill battle to get people to know that there is something here that is going to help them…I feel like the job has been made much harder by the active, entrenched, continuing hostile opposition to the law in Congress and in many of the states. I think it is unprecedented. The only precedent that I can think of in my lifetime for this kind of an effort has been resistance to integration in the 1950s and ‘60s.”

The nonpartisan Congressional Budget Office (CBO) projects 14 million more people will be insured in the United States in 2014. Nine million additional people are expected to have insurance through the expansion of Medicaid and the Children’s Health Insurance Program, while an estimated 7 million will purchase coverage through insurance exchanges. The CBO estimates 2 million fewer people will receive nongroup and Medicare coverage next year.

Individuals and small businesses will be able to sign up for coverage on the exchanges online, in person, or over the telephone between October 1, 2013, and March 1, 2014, and choose among several plans. United States citizens with incomes between 100% and 400% of the federal poverty level will be eligible to receive tax credits to help offset the costs.

Still, there are worries that people will forgo coverage and opt to pay the tax. In 2014, the penalty is $95 per adult and $47.50 per child. For families, the maximum is the greater value of $285 or 1% of the family’s yearly income. The penalty increases to $325 per adult and $162.50 per child (maximum of $975 per family or 2% of the family’s income) in 2015 and to $695 per adult and $347.50 per child (maximum of $2085 per family or 2.5% of the family’s income) in 2016 and beyond.

Throughout its campaign, the Obama administration has targeted young, healthy people who may decide that paying a $95 tax next year is a much cheaper choice than buying coverage on the exchanges. To educate that population about the choices available, HHS and states plan on utilizing social networks as well as help from entertainers and athletes who can extol the virtues of having insurance. For example, Maryland officials partnered with the Baltimore Ravens to air radio and television advertisements for the state’s insurance exchange during the team’s games.

If the exchanges are filled with mostly older, sicker people next year, insurers will raise their rates, according to Mr. Jost. However, he noted that the ACA established reinsurance risk adjustment and risk corridor programs to provide insurers with protection and limit losses if costs are higher than expected in the exchanges from 2014 through 2016.

During a trip to Houston in August, Ms. Sebelius announced the Healthy Young America collaboration between HHS and Young Invincibles, a nonprofit organization aimed at adults from 18 to 34 years of age. For 5 weeks beginning on August 19, young Americans were asked to submit a video promoting the ACA in a contest that promised to award up to $30,000 for more than 100 winners.

That same day, Texas Governor Rick Perry released a statement denouncing the plan.

“If ObamaCare were a sound healthcare policy, Secretary Sebelius wouldn’t have to resort to video contests and prizes to tempt people to sign up,” Mr. Perry said. “Texans are already subject to too much costly and burdensome federal regulation, and ObamaCare only makes the problem worse.”

Mr. Perry and other ACA critics were mostly disappointed with last year’s Supreme Court decision, but they were pleased that the judges gave states the option to expand their Medicaid programs. Originally under the ACA, states would lose all of their Medicaid funding if they refused to expand in 2014. However, the court ruled that the government could not withhold funding.

Next year, adults with incomes at or below 138% of the federal poverty level will be eligible for Medicaid, although some states will choose to keep their current eligibility levels, which vary widely. According to Kaiser Family Foundation data as of early September, 24 states and Washington, DC were expected to expand Medicaid, 22 states were expected to not expand Medicaid, and 4 states were still debating the issue.

In Pennsylvania, Ms. Sebelius noted that in the first 5 years of Medicaid expansion, the state would receive $17 billion. The federal government will pay for 100% of the costs associated with new Medicaid enrollees in the first 3 years. In the next 7 years, states will share some of the costs, but they will never pay for more than 10% of the costs.

Still, Pennsylvania Governor Tom Corbett voiced concerns about expanding Medicaid because the program was expensive and state officials were worried that increasing the number of enrollees would add to the state’s budget woes. Mr. Nutter, Philadelphia’s mayor since 2007, and others in Pennsylvania were incredulous about that thinking.

“That is a disgrace,” Mr. Nutter said. “This must change. There is no reason not to expand Medicaid in Pennsylvania…Access to affordable healthcare is our right here in Pennsylvania.”

Ms. Sebelius claimed that an analysis indicated that expanding Medicaid would add $3 billion in economic development in Pennsylvania through more staff at hospitals and more money for people to spend without worrying about affording insurance.

“Absent Medicaid expansion, there will be way too many citizens who will not have any access to affordable care,” Ms. Sebelius said. “That would be a tragedy.”

The campaign to expand Medicaid and encourage people to buy insurance will continue for the next few months because the deadline to enroll on the exchanges is not until March 31, 2014. Each state will have agents, brokers, and navigators trained to help people learn about the exchanges’ offerings and complete the applications to enroll and apply for premium tax credits.

Despite the CBO’s projections that 7 million people will purchase coverage on the exchanges in 2014, Mr. Jost said the accuracy of that estimate and other projections would not be known anytime soon. He expects most people will wait a few months to decide whether to enroll.

“I do not think we will know until the end of March,” he said. “If the media start saying on October 2 that 7 million [people] have not signed up and therefore the program is a failure, that is just nonsense…There are not that many people who are going to sign up for something months ahead of time. We will see.”