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With court approval for Obamacare, state must decide what to do with Medicaid

With court approval for Obamacare, state must decide what to do with Medicaid

Parrish Miller
June 29, 2012
June 29, 2012

With the Supreme Court's decision to uphold the vast majority of Obamacare, one provision that was overturned could potentially have a significant impact if some states refuse to expand Medicaid as instructed in the act.

In explaining the rationale for not allowing the federal government to withhold existing Medicaid funding to states that refuse to participate in the expansion, Chief Justice John Roberts said, "The States are separate and independent sovereigns. Sometimes they have to act like it." He also had strong criticism for Congress' attempt to force the states into compliance: "In this case, the financial ‘inducement' Congress has chosen is much more than ‘relatively mild encouragement'—it is a gun to the head."

Due to the ruling, states will have the option to refuse the proposed Medicaid expansion. In reference to the individual states, Roberts said that they "have a genuine choice whether to participate in the new Medicaid expansion" and that they "may now choose to reject the expansion."

Medicaid became the law of the land in 1965 as an amendment to the Social Security Act of 1935. It provides low-income persons some measure of medical care. The program is a federal-state venture, with the federal government allocating the bulk of the program’s cost to the states. States, in turn, appropriate additional financing and administer medical programs for the poor that meet federal standards.

Medicaid provides at least five general categories of treatment: inpatient hospital services, outpatient hospital services, laboratory and X-ray services, skilled nursing home services and physicians' services. In addition, a number of states provide eye and dental care, prescription drugs, physical therapy, hospice care and rehabilitative services.

In Idaho, the question is already being asked: "Should we expand Medicaid?" As state lawmakers begin to grapple with this question, a number of other questions are beginning to take focus. How much would expanding Medicaid cost Idaho in the long run? Who will insure those who would be covered by Medicaid if the state chooses not to do so?

Tom Shanahan, a public information officer with the Idaho Department of Health and Welfare, said that "over the next few days, our director will be working with the governor's office and with legislators, and hopefully they'll formulate a policy for what Idaho should do."

Rep. Vito Barbieri, R-Dalton Gardens, said one thing he will resist is the possibility of a tax increase to cover additional costs. "I don't believe that the other bureaucracies would stand for a budget cut sufficient to pay for the added cost that this Medicaid requirement is going to put on us. I don't believe that the taxpayers can afford to pay the additional burden if we don’t cut the other bureaucracies. So I am very concerned about where we are going to cut in the budget to facilitate this, and the pressure for new sources of revenue is going to be extremely high and very difficult to resist, but I do plan to resist with all my might any increases in fees or taxes—not just to accommodate this, but period."

Rep. Carlos Bilbao, R-Emmett, who is leaving the Legislature but is a candidate in November for the Gem County board of county commissioners, is also blunt in his assessment of how the state should handle the issue. " … we don't have to take that increase. That's written into the bill. We should say 'screw you.' Right now we're giving away too much as it is. I would definitely vote not to increase Medicaid and definitely do everything I can to stop the universal medical plan by Obama."

On the other side of the aisle there is talk of potential benefits to Idaho's counties should the state decide to expand Medicaid. "I think when fully implemented with the requirement for insurance when you can afford it and the Medicaid expansion I think the need for the catastrophic fund, or indigent program, virtually goes away." said Rep. John Rusche, D-Lewiston, the House minority leader.

According to the Congressional Budget Office, as many as 17 million Americans are supposed to gain coverage by being added to the Medicaid rolls, but that assumes Idaho and other states expand Medicaid coverage.
Note: Erik Makrush and Eric D. Dixon contributed to the content of this story.

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