The Brick Walls in the Battle Against Health Reform

States battling to repeal new health reform mandates have settled on two issues that may well turn out to be political brick walls. 

One issue is the requirement beginning in 2014 that individuals purchase insurance or pay an income tax surcharge, the so-called “individual mandate.”  The other is the federal expansion of the Medicaid program. 

The battle is being joined in the courts, the Congress, and state legislatures.

Most of the action so far has been in the courts. 

Florida has filed a suit challenging both the individual mandate and Medicaid expansion.  CNN calls it the “highest profile” lawsuit of many, and 19 other states have joined it.

Florida argues that the individual mandate is unconstitutional, contending that it’s unconstitutional for the federal government to require individuals to purchase health insurance by taxing them if they don’t.  As of last week, federal judges in both Michigan and Virginia have ruled against this position in other cases, but these decisions will be appealed. 

Florida’s argument against expanding the Medicaid program is more about public policy than the constitution. The Medicaid expansion will add 17 million uninsured people nationwide to Medicaid beginning in 2014.  This will cost a lot of money, and that’s the basis of the objection. 

However, for the first few years the federal government will pick up the entire cost of the expansion.  This means that states and localities initially will actually save millions of dollars they’ve been using to pay for care for the uninsured.

Also, the federal government doesn’t require states to participate in the Medicaid program.  Medicaid is not administered as one big federal program, but as fifty different state programs.

Why don’t states simply opt out?  When Governor Rick Perry of Texas floated the idea earlier this year, his own Health Commissioner quickly shot it down.  It’s because the Medicaid program draws down billions of federal dollars.  These pay not only for health care for poor people, but also for nursing home and home health care for seniors and intermediate care for people with disabilities.

A state opting out of Medicaid would be between a rock and a hard place.  It would bankrupt and alienate seniors and people with disabilities, while killing off some hospitals, nursing homes, and home health agencies that rely on these payments.  Or it could pay the whole bill itself, and its political leaders would have to preside over the biggest tax increase in state history.

Still, today’s court cases are only the opening volleys in this battle.  Even though they raise issues that seem today to create losing scenarios for the states, at least one case – perhaps Florida’s – will eventually reach the Supreme Court.  Health reforms will have been in place for years by then, and no one can say what the Court will focus on, what it will decide, or what the political landscape will be.

How will the other two battlefronts play out for states this coming year?  They’ll be noisy at times, but little ground will be gained or lost.

First, some members of Congress will try to choke off some funding to slow down reform implementation while introducing bills aimed at paving the way for more state challenges to reform.

Senator Roger Wicker (R-Mississippi) is introducing one of these this week.  They’ll argue “states’ rights,” noting that states – not the federal government – should determine how best to protect the health and well-being of their citizens.  None of these measures will pass, but they will give some cover to politicians trying to appease angry voters.

Second, state legislators will introduce and pass legislation that will be carefully crafted not to do too much too soon. 

Florida’s legislature is already working on its plan.  As Jim Saunders reported in Health News Florida on November 23^rd, Florida legislators are reviving a proposed constitutional amendment giving Florida residents the right to opt out of purchasing health insurance.  Voters may eventually get the chance to air their frustration by voting for the amendment, but even if it passes, it won’t affect anyone until 2014. 

By then, many of the crusading legislators will be out of office, and the Courts will all have ruled.  If they find the individual mandate constitutional, will anyone refusing to buy insurance want be the first one who refuses to pay the federal income tax surcharge?   That fight will be a lonely battle against the IRS, and not one the individual is likely to win.