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Health Insurance and the Future of Medicaid in Oklahoma

July 14th, 2014

Credit: That Hartford Guy via Flickr under Creative Commons

Credit: That Hartford Guy via Flickr under Creative Commons

This past week, the Oklahoma Health Care Authority, announced a round of deep cuts to the Oklahoma Medicaid program reimbursement rates. The cuts will result in a total reduction of about 7.75 percent to reimbursements with an estimated $48 million in savings for the Sooner State.

However that is not necessarily good news for providers participating in the state’s Medicaid program. These cuts could trigger more doctors and hospitals to drop out of the public health insurance program. An outcome like that could make life harder for thousands of low income Oklahoma medicaid  recipients who rely on the program to find a doctor or hospital to treat them.

 The Oklahoma Medicaid program and what Oklahomans can expect

The reimbursement cuts come at a time when Oklahoma is wrangling with the federal government over the future of the state’s Medicaid program. Oklahoma is one of about two dozen states that did not accept the formal Medicaid expansion that was originally mandated under the Affordable Care Act (ACA). This has caused problems for Oklahoma, and a number of other states who are trying to continue their Medicaid programs without accepting the ACA’s new version of the program.

Prior to the Supreme Court’s 2012 ruling on the ACA, the legislation’s Medicaid expansion was mandatory for every state. Despite the court upholding the majority of the ACA, they invalidated the mandatory expansion of Medicaid . Thus it was made optional for the states to expand their programs according to the ACA.

The move put Oklahoma in a unique position this year. Because Oklahoma’s Medicaid program did not technically meet the federally mandated standards of the program (they did not accept the ACA expansion), they would have been forced to shut down their Oklahoma Medicaid program in 2014.

However thanks to some last minute negotiating with the Centers for Medicare and Medicaid (CMS), Oklahoma has secured permission for the future of its Oklahoma Medicaid program in its current form, known as Insure Oklahoma, at least until the end of 2015.

At that point Oklahoma will either need to accept the ACA version of Medicaid or attempt to renegotiate with CMS. Federal officials have already express their ire at the current arrange, which makes a renegotiation unlikely. Regardless of how things play out next year, the short term future and well being of those enrolled in Medicaid in the Sooner State could be in jeopardy because of these reimbursement cuts.

Medicaid and Health Insurance Reimbursement Rates

Medicaid and Medicare doctor reimbursement rates are typically the lowest in the country. This means those providers accepting Medicaid and Medicare patients are paid less for each patient than they are for patients with private health insurance. It’s also worth noting that private health insurance companies take their cues to raise or lower reimbursement rates based off of what the Medicaid and Medicare rates are.

Many doctors and hospitals do not choose to accept Medicaid with the aim of getting rich. But they still accept it nonetheless. For Oklahoma doctors already treating Medicaid patients this will mean a substantial reduction is what they are paid per patient treated. Likely the result will be that the network of doctors and hospitals accepting Medicaid will shrink.

The Oklahoma Health Care Authority estimates that the cuts will save the state around $48 million. Another way to look at it is that doctors and hospitals accepting Medicaid patients will lose $48 million with these cuts in place.

Sadly  health care in the United States is a for profit system. Meaning the doctors and hospital need to turn a profit in order to keep their doors open. Contrary to parts of the mainstream media, the ACA does very little to change this. In fact the ACA has left the majority of the U.S. health care system intact, but that is a topic for another day.

The Oklahoma Health Care Authority is seeking more cuts than just the ones voted on this past week. In total they’re hoping for more than $100 million of budget cuts. This 7.75 percent reimbursement cut is just the start.  The agency cited a $55 million loss in federal funding, a growing caseload that has added around $40 million in program costs, and a loss of tobacco tax dollars of around $13.7 million because of declining smoking rates as reasons for the cuts.

At the moment 805,000 people receive health insurance through the state’s Medicaid program. With this round of cuts, these people are in danger of losing their access to health care. Without a doubt many providers will take these reimbursement cuts into consideration when they are renegotiating their contracts for 2015.

Is the ACA Medicaid Expansion the answer?

The main reason the Oklahoma Health Care Authority is seeking these cuts is a huge loss in federal funding for Medicaid. Would the state accepting the full expansion of the ACA’s Medicaid program help solve their fiscal problems? The answer is very likely yes.

The ACA expansion of Medicaid includes expansion of the program to those individual with incomes up to 138 percent of the Federal Poverty Level (FPL). Currently the Insure Oklahoma Medicaid program includes coverage for individuals with incomes up to 200 percent FPL. However Insure Oklahoma has a cap on the number of enrollees per year whereas the ACA expansion does not.

Along with the expansion would be a flood of federal money to help implement the program and fund it for the next several years. That sort of extra federal funding is just what the  Oklahoma medicaid program needs to keep itself going in a sustainable manner beyond 2015. Of course the ACA expansion of Medicaid does not come with mandated larger reimbursement rates for providers. This could prove to be a sticking point with bringing new providers on to accept Medicaid.

In any event time is running out before the start of 2015 open enrollment in November. There is still time to restore the cuts and find other ways to fund their Oklahoma Medicaid Program. Unfortunately though it doesn’t seem likely to happen any time soon.

The Hobby Lobby Ruling: What you need to know and how it could affect your health insurance exchange future

July 7th, 2014

Hobby Lobby

Credit: Nicholas Eckhart via Flickr under Creative Commons

Since last month’s Supreme Court ruling on the controversial Hobby Lobby vs. the Affordable Care Act case, the internet has been ablaze with speculation as to what it means for the future of the ACA and health insurance in the United States. While it’s certainly premature to declare the ruling a disaster, it does set and important precedent that could potentially impact millions of Americans’ health care choices.

Hobby Lobby and health insurance exchanges

In case you haven’t heard the news, on June 30 the Supreme Court ruled against the Obama administration in the case of Burwell v Hobby Lobby Stores, Inc. The ruling now allows for family owned (“closely held”) companies to opt out of offering their employees certain forms of birth control if it conflicts with their religiously held beliefs. The lawsuit slowly wound its way through the federal court system last year before the Supreme Court agreed to hear it.

The case was brought by two Christian families who own national businesses and claim that certain forms of FDA approved birth control, including the so-called “morning after pill” are tantamount to abortion and violate their religious beliefs. The two families in question are the Greens who own both Hobby Lobby, a craft store chain, and Mardel, a religious bookstore. The other family is the Hahns who own the cabinetmaker Conestoga Wood Specialties.

The Affordable Care Act requires all businesses with 50 or more employees to provide their workers with a comprehensive health insurance option. Comprehensive here is defined as a health insurance plan that provides coverage in all categories of the ACA’s Essential Health Benefits.

These essential health benefits are 10 categories of health services that all health insurance plans under the ACA must provide coverage for. One of those categories is women’s health services, and specifically mandated in that category is coverage for all FDA approved versions of birth control, which includes the morning after pill.

Hobby Lobby brought the suit to challenge this mandate. They argued that the federal government forcing the company to provide a medication that went against its religious beliefs, violated their first amendment rights. The Supreme Court’s ruling found that “closely held” companies (such as Hobby Lobby) could refuse to provide coverage for medical treatment that violated their religious beliefs.

What does this mean for your health insurance future?

Regardless of whether you believe it was the right decision by the court or not, the decision has important implications for health insurance in the U.S.

For a majority of Americans the ruling in the Hobby Lobby case will likely not impact them directly. At the moment only those firms regarded as “closely held” by the federal government are eligible to receive the same religious exemption from parts of the ACA as the plaintiffs in the Hobby Lobby case. However the term “closely held” is not very well defined, and thus vulnerable to possible abuse by companies looking for an ACA exemption.

The employer health insurance mandate

It’s also worth noting that the Hobby Lobby ruling only impacts those companies that are big enough to be subject to the ACA’s employer mandate. Starting in 2015 the ACA requires that all business with at 50 or more full-time employees (working at least 30 hours a week) provide them with a comprehensive health insurance option that also falls into a certain range of affordability.

Hobby Lobby’s main objection is that it was being forced to provide this health insurance in a way that it did not agree with. Had the company been small enough to not be subject to the employer mandate, one can make the argument that it would have simply opted to not offer any health insurance coverage at all. Instead their employees could have sought out and purchased a health insurance policy at their state’s rspective health insurance exchange or the federal health insurance exchange at HealthCare.gov.

A health insurance precedent

However regardless of whether the ruling will have an immediate impact on your health insurance options it does set a precedent. A precedent that could be potentially harmful to employees working at religious for-profit companies. What if your employer doesn’t believe in blood transfusions, or vaccines? Will they still be able to claim religious exemption at that point?

Going forward the implementation of the ruling is sure to be a bit rocky. Not to mention there are still a few murky aspects of the ruling to work out, like a hard and fast definition of a “closely held” company. According to news outlets there are already several countersuits in the works, so it’s unlikely this is last we’ll hear on the issue.