From Stick to Carrot: The Supreme Court’s Medicaid Decision May Have the Biggest Impact

Ellis Weeker , MD, FACEP

Published July 04, 2012

Most of the press has been focusing on the individual mandate. What a victory for Obama! Yet the Medicaid decision could be a much bigger issue than the one regarding the individual mandate. The Supreme Court has ruled that the Federal government cannot coerce the states into expanding their Medicaid programs to cover all people (not just the elderly, blind, pregnant women, and children) below a certain income level by threatening to withhold existing Federal funds as it would violate the Spending Clause of the U.S. Constitution and exceeded Federal authority to encourage states to regulate. This would have been a big stick. Now states are free to do as they choose and several have already said they don't have the money to increase Medicaid enrollees.

The government could still use new Federal money to entice the states to increase the number of people covered by Medicaid. But no matter who gets into the White House, there is little money to do that. This may not help poor people or the people who care for them, and, in particular, will not facilitate the care of uninsured people in our EDs. Healthcare exchanges are another potential aid for the poor and jobless, but several states are stalling on this [PDF].

On the other hand there will be more working people purchasing health insurance because they are required to do so or they will be fined. This will bring in new premium money and could help. Health insurers and healthcare providers are excited at this prospect. But even the potential improvements have attendant complications which reduce their effectiveness or have unintended consequences. For example, the bill includes new laws requiring better coverage of workers when a company has 50 or more employees. The result of this will be a disincentive to hire that fiftieth employee.

To make it more confusing, the Republicans are saying that they want to eliminate the remaining healthcare reform legislation that was just upheld by the high court. However, Republican legislators are at risk politically if they eliminate popular elements of the new law. For example, most parents are in favor of extending their children's coverage to the age of 26, and almost everyone appreciates the elimination of preexisting disease clauses and lifetime caps for coverage. As for the Democrats, the high court just opined that the individual mandate is a “tax.” So the Republicans will accuse Obama of increasing taxes at a time when most people are suffering from the effects of a weak economy.

Yet it is hard for me not to feel our country has missed an opportunity to provide health care insurance to another 30 million people who do not have it and desperately need it. Again, it’s about the money: so many of us want to spend our disposable incomes on more fun things than healthcare until something disastrous happens.

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