Obamacare aims to insure the uninsured. To do that, the law bars insurers from denying coverage to people with pre-existing conditions—but not until 2014. In the meantime, the law calls for a national high-risk pool to offer coverage to the otherwise “uninsurable.”
Under the new law, an important deadline looms. By Friday, states must declare whether they will help implement the new risk-pools for their citizens, or if they’ll just let the U.S. Department of Health and Human Services do it for them.
Many states have taken one look at the financial outlook for these pools and run the other way—with good reason. Obamacare gives HHS $5 billion to administer the pools from now until 2014. However, the chief actuary of the Centers for Medicare and Medicaid Services reports:
“…the creation of a national high-risk insurance pool will result in roughly 375,000 people gaining coverage in 2010, increasing national health spending by $4 billion. By 2011 and 2012 the initial $5 billion in Federal funding for this program would be exhausted…”
So federal funding for the pools may run out two years early. That could leave states stuck with the entire bill a year or two down the line if they help create the pools today.
Politico reports that HHS promises that won’t happen. But states aren’t buying it. Georgia Insurance Commissioner John W. Oxendine says state legislators won’t implement a high-risk pool because it would “ultimately become the financial responsibility of Georgians in the form an unfunded mandate.” Officials in Kansas, Louisiana and elsewhere have similarly dug in their heels on the issue.
The risk pools are just one way in which the architects of Obamacare passed costs on to states to maintain a tenuous claim that the legislation was “deficit-neutral.” The expansion of Medicaid will cost states billions in the long run, since federal matching rates will decrease in future years.
Similarly, to increase access to care for Medicaid beneficiaries, Obamacare raises federal reimbursement rates for primary care physicians—but only for two years. After that, doctors will either receive the same low payments they do now, or the states will have to pick up the cost.
Of course, advocates of Obamacare can argue these really aren’t unfunded mandates on the states. After all, the states can refuse to pick up the tab when the feds leave the table. In that case, though, the financial shell game ends, and the whole Obamacare scheme falls apart.