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Did Supreme Court Get Pat on Back—While It Kicked Poor in Shins?

Posted: Jun 30, 2012

Photo: Grassroots activists gathered at the Supreme Court last Thursday. (Courtesy National Committee to Save Social Security and Medicare)

LOS ANGELES--The U.S. Supreme Court ruling on Thursday that validated the Affordable Care Act (ACA) was a tremendous victory for all Americans, especially the sick and uninsured.

The court received a pat on the back by many community health advocates for allowing the nation to move forward in trying to provide health insurance to all Americans, but it did so while delivering a less noticed kick in the shins to health care reform’s promise for lower-income Americans—particularly those from ethnic or racial communities.

The issue for them is the expansion of Medicaid, the federal-state health insurance program for the poor. At least half of the increased health insurance coverage promised by ACA is projected to come from this expansion.

Under the existing Medicaid program, each state sets its own income-eligibility level. The lowest level is in Alabama, which provides coverage only to adults at or below 24 percent of the federal poverty line (FPL) or under $2,700 annual income. It also currently excludes most non-elderly adults who have no children.

The ACA calls on state Medicaid programs to cover everyone with incomes below or near the federal poverty level. The result would be income eligibility that is near the poverty level at $15,400 for an individual in 2012, or higher. Health care reform also aims to expand coverage to childless adults.

ACA Would Add At Least 17 Million to Medicaid

Overall, the Congressional Budget Office estimated that Medicaid’s expansion would cover 17-21 million new people, the majority of whom would be from ethnic communities.

This plan, as originally conceived, was good news to communities with low rates of health care insurance. In 2011, 11.7 percent of non-Hispanic whites had no health insurance. But the level was 18.1 percent for Asian Americans, for 20.8 percent for African Americans, and a whopping 30.7 percent for Latinos.

Over half of those now uninsured might benefit from this expansion of Medicaid. The Supreme Court decision, however, has tossed a monkey wrench in these plans.

In passing the ACA in 2010, Congress included both a carrot and a stick to get states to expand their Medicaid programs. The carrot is that the federal government will pay for all the increased costs of expanding Medicaid for the first three years. After that, the federal coffers will cover 90 percent of the costs of those newly covered.

The stick was to be that states deciding not to expand their programs would lose all federal Medicaid money. The Supreme Court, though, said that the stick was unduly coercive.

It is not clear what the difference will be without the stick of enforcement.

Some states, such as California, are on track to expand Medicaid as envisioned in the ACA. Others, such as Texas, would claim lots of new federal dollars under this expansion, but may now refuse the funds due to conservative politics.

That would be a shame because refusing to expand Medicaid would reduce access to needed health care by low-income Texans while saving the Texas government little or no money. Many believe no state would turn down so much federal support.

But if they do, what would happen to those left out?

Blacks, Latinos at Double Diabetes, Asthma Rates

Considerable research has shown that people who have health insurance are more likely to get needed health care. This is important for a number of health problems that impact communities of color, such diseases as diabetes and asthma. African American and Hispanic adults have almost twice the rate of diabetes as non-Hispanic whites.

If not medically managed well, for instance, diabetics have a much higher risk of amputations, blindness, kidney failure and premature death. So expanded health insurance coverage would help reduce the burden of health problems that are sensitive to early and continuous medical management.

Poor management of such chronic diseases also tends to lead to otherwise preventable emergency room episodes and hospitalizations—with costly results for state budgets.

ACA also expands coverage of preventive services, such as flu shots and colorectal cancer exams. People with health insurance are more likely to get these health-protecting treatments than those without it. So, again, increasing the number of those insured would lead to more people being protected against illness and preventable death.

The health care reform law became a litmus test of government power versus individual freedom. Ironically, though, the way that ACA expands health insurance borrows from earlier Republican proposals relying heavily on private markets, rather than direct government intervention.

The new court decision turned primarily on whether or not the ACA’s “individual mandate” requiring people to buy health insurance is allowable under the Constitution. The 5-4 majority found that it was constitutional because Congress is allowed to create taxes, and those without health insurance simply pay an extra tax.

The “mandate” label is inaccurate, though, because there is no absolute requirement for buying health insurance, such as states require for car insurance.

Instead, those not having health insurance will pay an additional income tax of at least $695 annually, which is less than the cost of buying health insurance. So people are encouraged, but not forced, to buy health insurance, if they do not already get it from their employer or a public program, such as Medicare or Medicaid.

Is this tax unfair to low-income people? No. For those not eligible for Medicaid, the law offers subsidies that significantly lower the cost of health insurance for those with modest incomes. Of the nearly 50 million uninsured people in the United States, the Kaiser Family Foundation [http://bit.ly/NQhJW9] estimates that over one-third could benefit from these subsidies.

Were the November election to bring in a Republican president and GOP majorities in Congress, many of the improvements of the ACA would likely be slowed, and some could be stopped cold.

Partisan politics in some states may well prevent Medicaid’s expansion to improve access to health care for low-income people--especially those in ethnic communities. But if that happens, there should be a clarion call for those communities to organize and make their voices better heard in their state capitals. With the country looking more like a multicultural rainbow with every passing day, both state and federal health policies need to be responsive to the needs of all communities.

Steven P. Wallace is associate director of the UCLA Center for Health Policy Research and chair of the Department of Community Health Sciences, both at the University of California, Los Angeles, School of Public Health.

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