The Affordable Care Act (ACA), commonly referred to as Obamacare, was passed in 2010 by the narrowest of margins in what was a tremendous partisan fight. For both good and bad, the ACA has had a major impact on Idaho’s businesses, especially Idaho’s health care and health insurance industries.
A basic requirement of the ACA was that employers of fifty or more employees were obligated to provide insurance to full-time employees working more than 30 hours per week or face stiff tax penalties. In addition to requiring employers to provide health insurance, the ACA also sought to provide insurance to those individuals and families who do not have access to health insurance through an employer. This group of mostly low-income individuals includes those who are employed by small employers, those not employed, and those who may be working in part-time or multiple part-time jobs. Given the high cost of health insurance in today’s world, these individuals and families are simply never going to be able to afford health insurance.
The ACA provided two pathways to provide health insurance for low-income individuals and families who did not have health coverage through an employer. First, the ACA established health insurance exchanges where subsidized health insurance coverage could be obtained by those making between 100% of the federal poverty level (or $25,100) and those earning up to 400% of the federal poverty level (or $100,400). Second, the ACA allowed states to expand their Medicaid programs to provide health care coverage to those individuals and families who make less than 138% of the federal poverty level ($34,638 for a family of four). For states that expanded their Medicaid Programs, the ACA required the federal government to pay 90% of the long-term costs associated with that expansion, with states paying 10% of those costs.
The State of Idaho partially implemented the ACA by enacting legislation in 2013 that established Idaho’s health insurance exchange which is now known as “Your Health Idaho”. However, Idaho’s legislature has repeatedly declined to expand Idaho’s Medicaid program to provide basic health coverage for the somewhere between 51,000 and 62,000 residents of Idaho who live below 100% of the federal poverty level and do not have health care coverage.
After five years of failing to convince the Idaho legislature to expand Medicaid, advocates for Medicaid expansion turned to the ballot initiative process to accomplish this task. Under Idaho law, an initiative process allows citizens to pass legislation by drafting a petition stating the language of the new law, gathering signatures in support of the petition, seeking verification of those signatures by the county clerk, and presenting the petition and verified signatures to the Idaho Secretary of State. Idaho law requires petition supports to gather signatures from six percent of the voters in the last general election and six percent of registered voters in 18 of the state’s legislative districts. To get an initiative on the ballot, signatures must be filed with the counties in which the signatures were obtained. Based on the number of votes in the last general election, 56,192 verified signatures are needed for an initiative to appear on the ballot in 2018.
According to news reports, supporters of the Medicaid expansion initiative have filed more than 60,000 signatures with clerks of all 44 Idaho counties. If the requisite number of signatures are verified by the county clerks, the initiative petition will be filed with the Secretary of State’s office and appear on the November 6 general election ballot. It was a surprise to many that this grassroots effort was able to organize and meet these signature-gathering requirements.
A recent estimate by the State of Idaho predicts that Medicaid Expansion would result in the expenditure of $526.5 million in 2019 to provide health care to the residents of Idaho who live below 100% of the federal poverty level and do not have health care coverage. The state of Idaho’s portion of that expenditure would be $42 million, with the federal portion of $484.5 million. Obviously, a significant expenditure at both levels.
Why should Idaho’s businesses care about Medicaid expansion? Each year at renewal time, Idaho’s businesses face the ever-increasing costs of providing health insurance for their employees. A portion of each health insurance premium reflects the costs associated with health care provided to Idaho residents who have no insurance. Idaho’s health care providers write off millions of dollars of uncompensated care each year for services provided to patients with no insurance. According to the Kaiser Family Foundation, studies show that health insurance premiums are lower in states that have expanded Medicaid and that expansion has reduced the costs incurred by providers for uncompensated care. In fact, one study suggested that Medicaid expansion resulted in a 41% savings in uncompensated care by hospitals in expansion states. The very real costs of uncompensated care are passed on to the health insurance companies who have no choice but to pass these costs on to their customers. Reducing that amount benefits everyone.
Medicaid expansion will also help those uninsured individuals who delay receiving health care until their condition becomes acute. What could have been managed through blood pressure and cholesterol medication is now a serious heart condition requiring surgery. Cancer which would have been diagnosed in a routine office visit instead will be diagnosed at an advanced stage.
These uninsured individuals often resort to receiving care at the emergency room of their local hospital, where the cost of care is the highest and where they will not be turned away based on their inability to pay. The high cost of emergency care, coupled with the more extensive care that is often needed, leads to medical bills that are simply unaffordable to those without insurance. To stay in business, these same hospitals and physicians seek additional higher reimbursement rates from private insurance companies who provide coverage to your company and your employees. This is an unsustainable cycle.
It remains to be seen whether the ballot initiative process will lead to Medicaid expansion in Idaho. If the necessary signatures are verified and the expansion initiative appears on the ballot, it will certainly prompt significant discussion of this important issues throughout the state.
Mr. Mortell is a partner at Hawley Troxell and chairs the firm’s health law practice group. He represents hospitals and other health care providers throughout Idaho. He is also a member of the firm’s governing board. He can be reached at firstname.lastname@example.org.