Republicans are not focused on replacing the health care law, and it’s likely they never will be. They will either get the law repealed, by either a court order or a legislative action once they have enough votes in hand, or… nothing.
This presents a difficulty for states who have to decide whether or not to implement the law. With respect to the biggest piece of reform, the insurance exchanges, if the states choose not to set them up, the power reverts to the Department of Health and Human Services to run them. So failing to implement the law will result in handing over more control to the federal government. However, with the current state of many legislatures, infused by Tea Party sentiment, daring to implement any of the Affordable Care Act at this time is politically perilous. Most states have declined to set up the exchanges or implement other reforms. However, Alabama is moving relatively boldly against the grain.
Last week alone, Republican Gov. Robert Bentley issued an executive order to move forward on an Alabama health insurance exchange and lashed out at the state’s Republican-controlled Legislature for attempting to scale back his proposed $247 million increase in Medicaid funding by a mere $7 million.
He sent the budget back with an executive amendment restoring half of the cut, and in a closed-door meeting with state Republicans, Bentley let his feelings be known.
Rep. Greg Wren — a Republican who served with the governor for eight years in the Alabama Legislature — said he’d never seen Bentley more passionate about an issue than he was at a meeting on Medicaid with the Republican caucus last week.
“He strongly asserted that this funding had to be restored to Medicaid,” said Wren, who has worked on health policy issues in the Legislature and with the National Conference of State Legislatures. “It was as strong and assertive as I’ve ever seen Gov. Bentley.”
The defense of Medicaid is particularly interesting. 43 states cut their Medicaid programs over the past year, reducing their Medicaid rolls and increasing cost sharing. Even states like California moved Medicaid patients into managed care in an effort to cut costs. States spend the bulk of their budgets on education and health care, so in the midst of a financial crunch, there aren’t many other options for them. So to see Alabama expand their Medicaid program is unique. In this case, I believe it’s a matter of qualifying for matching funds; the state is coming off a pretty low position for Medicaid, and not reaching a certain standard of effort risks federal dollars.
That makes Alabama more of an exception than the rule. The question of the exchanges yields differing responses from different GOP Governors, who see the threat of taking over the exchanges and the threat of passing their own program in the midst of opposition from their base differently. Ultimately, I think you’ll see a lot of states give the exchanges to the feds to run, and then complain that the federal government is intruding on their sovereignty by running them.
But the Medicaid cuts, where Alabama is unique, is more troubling. Remember that fully half of the coverage expansion under the Affordable Care Act comes from expanding Medicaid. The restrictions on services or increased cost-sharing could make that coverage expansion simply junk coverage.