How the campaigns cast a shadow on HIX, Medicaid — and why they're now poised for forefront

By Tom Sullivan
08:11 AM
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Amid all of the politicking by both President Barack Obama and former GOP contender Mitt Romney around healthcare during the campaign season and general election, two of the more divisive pieces of the Affordable Care Act – Medicaid expansion and health insurance exchanges – were inhibited as many Governors waited to learn the election’s outcome.

And while both face staunch resistance today, at least some experts believe that Medicaid expansion and HIXs are now on the verge of blossoming into focus among U.S. states.

Reason being: The ACA is here to stay and states face a simple, and similar, choice on both issues of either accepting federal funding and being expected to use it accordingly, or not and missing out on the money. What’s more, there have been silent rifts between conservative politicians essentially toeing the ACA repeal party line and public health officials slowly and cautiously moving forward with HIX and Medicaid, to the extent that they can under such political leadership.

A mathematical matter
With Romney campaigning on promises to ultimately repeal and replace the ACA after issuing an executive order on day one that would have granted states waivers from implementing the health reform law’s provisions, the argument against investing in the IT, personnel and expertise resources that standing up an exchange would require certainly held appeal to conservative political leaders.

[Political Malpractice commentary: Don't pop the champagne for ACA anytime soon]

In South Carolina, for instance, former Governor Mark Sanford accepted a federal grant, a legislative session including 13 Republicans voted to create an HIX, and then the Tea Party took over, working on those 13 one-by-one, as Karen Martin, head of the Spartanburg South Carolina Tea Party Chapter tells it. Then when Nikki Haley became the new Governor of South Carolina “we made it very clear to Governor Haley that ‘we do not want this. We do not want this. We do not want this,’” Martin told Government Health IT during an interview earlier in the campaign season.

In South Carolina’s case, Gov. Haley established a panel including at least one Tea Party Representative that eventually decided against standing up an HIX. “Well,” Martin began, “we could have told you that a million dollars ago.”

On the Medicaid front, in addition to South Carolina, Florida, Georgia, Louisiana, Mississippi and Texas are maintaining that they will not expand the number of enrollees.

But Joel Ario believes that sort or resistance is about to change.

“Among political leadership there’s been a lot of talk about how during a campaign season when the candidate makes a major point to repeal, you can’t undercut that,” said Ario, managing director of health solutions at Manatt, Phelps & Phillips, a law firm that works with states and providers on health IT and related public policy issues. “But even among some of the political leadership, and I’ll point to Nevada and Arizona as good examples, some states have said all along they intend to move forward.”

Ario’s colleague Deborah Bachrach, Manatt’s special counsel on healthcare transactions and policy, said that because states have the option to expand Medicaid to citizens earning 138 percent of the federal poverty level for all their adults with 100 percent federal funding, now that Governors know the ACA won’t be repealed, it might not be so wise to pass it up.

“When the dust clears and they examine the numbers in the light of day, I think most states will find it’s advantageous to expand Medicaid enrollees because not only will it bring coverage to hundreds of thousands, if not millions, of their citizens, but it will bring many new federal dollars into their state,” Bachrach said. “And whatever the cost in 2020, which would be 10 percent of covering these new adults, the savings these states will be able to secure by withdrawing funds for covering uninsured citizens – there’s your foundation for coverage. History suggests states will go for it.”

What HIX delay means
On Monday, Kansas Gov. Sam Brownback, a Republican and Missouri Gov. Jay Nixon each separately denoted that their state will not build a health insurance exchange. Calling Obamacare federal overreach, Gov. Brownback continued in a statement that “my administration will not partner with the federal government to create a state-federal partnership insurance exchange because we will not benefit from it and implementing it could costs Kansas taxpayers millions of dollars.”

[Political Malpractice slideshow: The election and the fate of the ACA]

It is, perhaps, telling that one of the first things the reelected Obama administration did was to push back the deadline for states to declare their plans for an HIX from November 16 to December 14 – a move that is more significant to states still resisting or trying to decide how to proceed with an HIX than for those with the project already underway.

“States that have not yet started planning and who have not yet received material establishment grants are now afforded a real opportunity to partner with the federal government to jointly establish and manage their exchange,” said Daniel Rizzo, chief innovation officer at Inovalon, a healthcare analytics company.

Potential candidates include the five states in which Democrats wrestled control of the legislature during the election, those being Colorado, Maine, Minnesota, New York and Oregon. In Maine, with a Tea Party Governor in Paul LaPage, some of the newly-elected are already proclaiming their intention to implement the Affordable Care Act.

Rizzo added that the delay will not enable states to run exchanges themselves sans proper planning, but “federal-state partnership models will still afford states the opportunity to customize many aspects of exchange policy and operations, while relying on the federal government to assist by performing the more complex processes and roles.”

States still have to essentially declare their intentions to the Department of Health and Human Services, be that to stand up a state-based exchange, partner with the Federally Facilitated Exchange (FFE) or leave it all up to the FFE.

“There are many factors governors are weighing right now, including the politics around Obamacare, legislative support or lack thereof, funding, federal readiness, state readiness, the implications of having the federal government run the state’s exchange, control, capacity at the state level to do the job well, and so much more,” said Claudia Page, co-director of Social Interest Solution, a non-profit technology and policy organization that helps connect low-income families to programs such as Medicaid and is working with states to implement health benefit exchanges (pictured at right). “But standing up a health insurance exchange, one way or another, is a core statutory requirement of ACA. And it’s an enormous task requiring herculean effort on the IT systems development and integration fronts, as well as the policy and business process implementation fronts.”

Invisible progress
Manatt’s Ario and Bachrach both spoke of states where the political leaders were publicly opposed to HIX, Medicaid expansion or both, but the health officials were working on the provisions, knowing that they could ill-afford to ignore either without creating insurmountable projects agains the existing ACA deadlines if Obama were to be reelected.

[See also: Boehner, Cantor give glimpse of GOP intentions for ACA]

“You have to distinguish between the political leadership and some of the agency staff. At the ground level in almost every state, if not every state, there has been considerable activity to implement provisions of the ACA. In states where the political leaders are opposed, that leadership has been slower but there is progress nonetheless,” Bachrach said, adding that Obama’s reelection means “stakeholders will feel freer to put the pressure on politicians to advocate for expansion, and to advocate for the state-based exchange or at least the partner exchange.”

Building on that, Bachrach highlighted the divide particular to health insurance exchanges as remaining largely political such that there aren’t a lot of red states on record with HIX plans, it’s mostly blue states – at least for now.

“More states will come on board as it becomes clear that the choice really is a state exchange or a federal exchange that’s kind of an onboard to a state exchange,” Ario explained. “I expect that even some of the states saying ‘absolutely not’ today, over time that will change. As they consider their options and look at the facts more clearly, they’ll gravitate toward participation.”


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For all of our elections and politics coverage, including the year's worth of features, news, reader surveys, analyis, interviews and spotlights on the states, visit Political Malpractice: Healthcare in the 2012 Election.