State Facing Medicaid Choices

Now for the hard part.

The Supreme Court’s decision Thursday upholding nearly all of the Affordable Care Act known as Obamacare sets the stage for a potentially ugly state-level debate over Medicaid spending.

It also:
♦ Turns up the heat on state efforts to build a health insurance exchange.
♦ Sets off an insurance industry scramble to woo an estimated 75,000 new customers in the state.
♦ Forces health care providers to squeeze possibly tens of thousands more people into a care delivery system that isn’t big enough for existing consumers.
♦ Frames the issue as a key political question in the November elections.

Business leaders said they would shift their focus to the political and regulatory arenas to get the government to implement mandatory insurance provisions of the act in the least painful manner possible.

At the same time, health care providers say people who have struggled to pay for health care will now get the care they need and that a healthier population in the long run could slow or even reduce the cost of care.

Supporters of the act said the decision will result in a healthier work force and bring more money into the state’s health care system, generating new jobs and new taxes.

Medicaid choice

States have a real choice in deciding whether to expand Medicaid coverage because the Supreme Court declared unconstitutional the law’s penalty on states that refuse to expand the program to many more low-income, uninsured adults not currently eligible.

The federal government will pay 100 percent of the cost in the first three years of expansion, then 90 percent thereafter.

The state Human Services Department estimated an expansion would put 170,000 more New Mexicans on the Medicaid roles at a cost to the state of up to $500 million between 2014 and 2020. The federal government would pay $6 billion in that period.

Gov. Susana Martinez has not decided whether to support expanded Medicaid, said HSD spokesman Matt Kennicott.

“We need to look at the implications from A to Z and do what is right for New Mexico all the way around, including budget questions and including how to provide services to those in need,” he said.

Martinez’s Economic Development secretary, Jon Barela, was less circumspect in his assessment of the ruling.

In a statement, Barela said, “Today’s Supreme Court decision to uphold President Obama’s abominable health care law means a future of rising taxes and stagnating economic growth for the state of New Mexico. It means more burdensome regulations and mandates will infringe on the ability of New Mexico businesses to grow and create jobs.”

State Sen. Jerry Ortiz y Pino, D-Albuquerque, a member of the Legislative Health and Human Services Committee, thinks the state should jump at the chance to cover more people at federal expense.

“The whole point is that once we get people health coverage their costs will be so much lower than what they are now,” Ortiz y Pino said. Patients will receive care that will prevent surgeries and keep people out of hospitals, he said. “The more people we can get covered the more we save in the long run.”

“My sense is it’s going to be quite a legislative battle on what we can pay for versus what we want,” said Sen. John Arthur Smith, D-Deming, chairman of the state Senate Finance Committee.

“Health care, and Medicaid in particular, has been a budget killer,” Smith said. “I do see bitter fights in the legislative body.”


The court upheld a requirement that all Americans who can afford coverage be insured or pay a tax. The act provides subsidies for lower income families to help pay for insurance. Physicians say that requirement will improve New Mexico’s health.

Jeremy Gleeson, a physician and president of the Greater Albuquerque Medical Association, said, “This is the right decision. It’s good for doctors and it’s good for patients. (The association) hasn’t taken an official position on it, but my own view is the young and healthy have to be in the insurance pool so that the old and unhealthy can afford care. Eventually, we’re all old and unhealthy.”

Scott Jeansonne, a physician with First Choice Community Healthcare, said that getting more people insurance frees up the clinic’s resources so more patients can be served.
“Not a day goes by that I don’t see a patient three, six, 12 months after they know they should have come in,” Jeansonne said. “The reason is they couldn’t afford to make it to the clinic.”

That delayed treatment results in unhealthy people who drive up health care costs for everyone, he said.

Because uninsured people can’t pay for their care, “everybody who is insured is paying for them,” said John Molina, chief financial officer of Molina Healthcare, a California company that provides Medicaid managed care in New Mexico. “The more people we can get covered, the lower insurance premiums will be for everybody else.”

Lovelace Health System alone had $78 million in costs last year in providing care to people without coverage, said Lovelace Health System chief financial officer Stephen Forney.
“There are some people who think (the mandate) is the answer,” said Greater Albuquerque Chamber of Commerce President Terri Cole. “There are so many other pieces of this health care problem that have to be fixed as well. The infrastructure to make this successful has to be in place. That is going to be a huge problem.”

The National Federation of Independent Business, which worked hard to kill the act, is “going to refocus our efforts on the legislative and regulatory process” to affect state Medicaid decisions and development of a health insurance exchange, said NFIB’s New Mexico director Minda McGonagle. The exchange is a computerized system designed to help businesses and individuals buy insurance efficiently.

“We have to be engaged in how the exchange will work, how to keep it marketplace-driven, how you get as much choice as possible,” McGonagle said.
Insurance companies want to be sure the exchange’s information technology works properly, said Ben Slocum of Lovelace Health Plan. It has to be set up so customers can sign up with any insurer without problems or glitches.

The Association of Commerce and Industry is just glad for some clarity, said its president, Beverlee McClure. “The uncertainty has been a huge burden,” she said.
Her organization will also work on the exchange and hopes to influence Medicaid decisions. “Our Medicaid benefits are some of the richest in the nation,” McClure said. “It’s good we will be able to limit that ourselves and make an appropriate decision based on our budget.”

Health Action New Mexico executive director Barbara K. Webber said the act is a boon to small businesses. Buying insurance on the exchange where prices are controlled instead of getting prices set in very small risk pools should save them money. And by letting individuals find affordable care on the exchanges, entrepreneurs will be able to risk leaving their employers and their group health coverage and set up their own companies, Webber said.

To insurance companies the ruling expands the market, said Jim Hinton, CEO of Presbyterian Healthcare Services. “That’s a good thing for the private insurance system in New Mexico and for our organization.”

“The countervailing force is that is the system is currently sized to care for about three quarters of the population that has some form of insurance,” Hinton said. Coverage for all will add another quarter of the state’s population to that same system. “It’s going to take time to match up supply and demand,” Hinton said. “There is no question about it.”

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