• I talked to a college class about Obamacare—this is what they asked me

    A friend, who’s a teaching assistant for an undergraduate political science class, invited me to chat with his discussion sections a few weeks ago; the Affordable Care Act is their last topic of the term. The students had just received an essay prompt on the law, and this was their final discussion (complete with donuts and eggnog to celebrate). We let the sessions take a relatively free-form Q&A structure. Two questions came up in both sections; I figured I share those here, in case you’re curious what—an admittedly very small, specific cross-section of—young adults worry about when it comes to health reform.

    What’s up with states refusing to expand Medicaid? Considering the relative dearth of media coverage, it surprised me that this was the first topic brought up, and it seemed to bother them most. More than the website problems. More than long-run political implications.

    Bracketing the politics for a second—though, with Obamacare, it seems politics can never be sidelined for long—I explained the economic concerns that states have about expanding their Medicaid rolls and taking on the eventual economic burden of paying for 10% of the expansion population. To that, I’d point to a recent report out of the Commonwealth Fund that puts those costs in perspective; Austin blogged on it here. There is also fear of the federal government walking back their commitment to a 90% match after 2020, but extant match levels have remained steady since the program’s inception, even during economic contractions (the federal government actually upped contributions during the most recent recession).

    The political critiques come in two general flavors, though they’re not mutually exclusive: a belief that we oughtn’t subsidize health insurance for low-income but able-bodied adults, and a belief that Medicaid is a broken program that we shouldn’t invest in further. As I’ve written before, the Arkansas model is one answer to the latter point—but conservatives have to grapple with the reality that a “private” expansion will be more expensive than a traditional one.

    I anticipate that the states will eventually all expand; the program took several years to initiate nationwide, as did the CHIP expansion. The recent budget deal delays reductions to DSH payments by two years, though. That was one of the biggest incentives for states to expand, so I expect take-up to lag.

    What’s the worst-case scenario that could unfold over the next year? The one thing that could still be a huge blow to the law is a full delay of the individual mandate, which HHS could maneuver by expanding the recent “hardship exemption” to include those who were uninsured. I’m not confident that’s off the table yet—especially considering that some state exchanges are still struggling—but if the administration does offer a blanket delay, I don’t think we’ll see it until the end of open enrollment. The reasons are both pragmatic and strategic: we can’t know the extent of “hardship” until enrollment wraps, but we also know that people tend to sign up just under the wire. Massachusetts illustrated this, and so did enrollments before the “soft deadline” this week, if the limited data we have so far is any indication.

    A one-year mandate delay is also something the exchanges could probably recover from. I’m more bullish on this than others, but that possibility was the original context of my “risk corridors” post; the risk adjustment mechanisms are in place for three years. Moreover, the penalty is weak enough in the first year ($95 or 1% taxable income, whichever’s higher) that I’m not sure that enrollment will be meaningfully different with or without a mandate in the first year. This is doubly true if a mandate delay were to be announced late in the game, when most of the people who would have signed up will have signed up.

    Adrianna (@onceuponA)

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