Partisan Conflict and the Implementation of Health Reform Nationally and in the States

1. Partisan Conflict and the Implementation of Health Reform Nationally and in the States Theda Skocpol Harvard University and Scholars Strategy Network OK Policy Summer Policy Institute August 7, 2013

2. On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act

3. Nation Still Divided On ACA As you may know, a health reform bill was signed into law in 2010. Given what you know about the health reform law, do you have a generally favorable or generally unfavorable opinion of it? Public Opinion Was – and Has Remained – Sharply Divided Source: Kaiser Family Foundation Health Tracking Polls

4. After two years of continuing public controversy and legal challenges from 26 states, the Supreme Court upheld the core provisions of Affordable Care on June 28, 2012

5. President Obama’s reelection on November 6, 2012 ensures that Affordable Care will survive through the initial stages of implementation.

6. Reprinted with permission.

7. “Social policy is one percent inspiration and ninety-nine percent implementation.” -- Wilbur Cohen, architect of Social Security and Medicare At the 2010 signing ceremony, President Obama shares words of appreciation to Speaker Nancy Pelosi, the driving force in Congress. Looking on is Health and Human Services Secretary Kathleen Sebelius, who oversees the implementation of Affordable Care.

8. The ObamaCare Implementation Challenge • Affordable Care features: • new rules for private insurance companies and employers; • subsidies and Medicaid extensions to expand coverage; • the establishment of “health insurance exchanges” to allow people to learn about eligibility for subsidies compare regulated private plans. • Implementation spreads out from 2010 to 2018, leaving citizens unaware of key benefits and allowing time for obstruction. • Some national funding streams are set by law and HHS Secretary has considerable regulatory authority, BUT… • Each of the fifty U.S. states makes pivotal decisions: • Set up exchanges? • Accept the expansion of Medicaid?

9. Expanding Coverage Under the Affordable Care Act * Medicaid also includes other public programs: CHIP, other state programs, Medicare and military-related coverage. The federal poverty level for a family of three in 2012 is $19,090. Numbers may not add to 100 due to rounding. SOURCE: KCMU/Urban Institute analysis of 2011 ASEC Supplement to the CPS. Federal Poverty Level 400%+ Employer-Sponsored Insurance 139-399% (Subsidies) Uninsured <139% (Medicaid) Medicaid* Private Non-Group 266 M Nonelderly

10. Pew Center on States

11. PARTISAN CONTROL AND STATE DECISIONS ABOUT OBAMACARE (Kaiser data 7/13) HEALTH INSURANCE EXCHANGE? State Run or Partnership Exchange Default to the Federal Government MEDICAID EXPANSION? YES Undecided = NH NO Partisan code from Pew: Red = strong GOP Orange = lean GOP Black = roughly even Light blue = lean Dem Blue = strong Dem

13. With 25% uninsured, the most in the USA, Texas would gain the most from the Medicaid expansion. But GOP Governor Perry prefers the Ryan approach to turning existing Medicaid into a block grant and allowing Texas to cut benefits and beneficiaries at will.

14. After challenging ObamaCare in court and initially refusing the Medicaid expansion, Florida GOP Governor Rick Scott now proposes to use the federal grants for coverage through private managed care.

15. But Scott is facing push-back from his Republican legislature – as are GOP governors supporting the Medicaid extension in Michigan and Ohio.

16. Federalist Mechanisms Favorable to Implementation of ObamaCare • Legislation has federal “default” for insurance exchanges. • Default not thought necessary for Medicaid expansion -- but very generous subsidies (100% for first three years, 90% thereafter) were included to soften expected resistance from low-benefit states. • Original legislative intent was upended by the Supreme Court, but Affordable Care includes a de facto alternative mechanism: “Uncompensated care” payments to hospitals were legislated to decline starting in 2014, when Medicaid coverage expands. Hospitals therefore face a steadily tightening fiscal squeeze if their state governments do not accept the Medicaid extensions. • This is POLITICAL mechanism: Works to spread Medicaid extensions only if costs are dramatized and state officials are cross-pressured between ideological conservatives and institutional/business interests.

17. States and Feds will Manuever for a Decade • Dynamics this time may favor a “race to the middle” rather than the bottom. Good implementation in states like California, Minnesota, and New Mexico may exert pressure on others. • GOP-led states will point to implementation glitches elsewhere and hope for national developments to undermine or reverse regulations and conditional subsidies. • Very liberal states will look for opportunities to upgrade health coverage as it is made nearly universal: • Vermont aiming for single-payer (needs waiver in 2017) • Hawaii worries that its generous employer mandate could be undercut. • All states with high Medicaid standards worry about lower federal standards. • Possibilities to include “public option” on regulated exchanges, which could save money.