"Ho Ho Say Ahhh!"

“Ho Ho Say Ahhh!”

If you lack health insurance, Santa (in the guise of Uncle Sam) may or may not provide for you. It depends on where you live.

The vision behind the Affordable Care Act (ObamaCare) was to expand health insurance to as many Americans as possible via the following mechanisms:

  1. Mandate that everyone without insurance get it in some form (through their job, through an entitlement [e.g. Medicaid], or via self-purchase on a state-based electronic health insurance exchange).
  2. Expand Medicaid coverage to cover those with incomes at or below 400% of the federal poverty level ($92,200 for a family of four in 2012).

This past summer, the Supreme Court upheld #1, while ruling that states could choose to opt-in or out to #2. The majority said that the federal government could not coerce states to accept new Medicaid dollars by threatening to withhold or rescind current Medicaid dollars.

Thus comes a complicated reality: Implementation.

Many states have now declared that they will not accept the new Medicaid funding, despite the fact that 100% of it comes from the federal government for the first three years. By 2020, the federal contribution goes down to a not-too-shabby 90% rate. Yet many governors are stating that with the cost of health care continually rising, even that future 10% will be too much for their states’ budgets to sustain.

In addition, many states have decided to forgo local control of the state health insurance exchanges. Under ObamaCare, if states don’t create their own exchanges, the federal government is empowered to step in and run them.

Apparently, due to the local economics of health care and complicated rules regarding interstate insurance transactions, drafters of the law assumed that there would be more local desire to plan and implement said exchanges.

Looks like most states are going to let Santa/Uncle Sam bring exchanges to them.