Voting 5-4, the U.S. Supreme Court has upheld the federal health-care reform law, the core of which requires individuals to get health insurance or pay a fine. The decision means about 280,000 more Kentuckians will qualify for Medicaid, and about 220,000 will qualify for insurance under a state exchange where they can choose from various policies. More than 900,000 Kentuckians who were previously denied coverage for pre-existing conditions will now also be able to get coverage.
"More people will have access to health insurance is the short answer when it comes to the impact this will have in Kentucky," said Anne Hadreas, attorney for the Kentucky Equal Justice Center. "People with low incomes and moderate-income people will not have to worry about choosing between getting a breast cancer screening and putting food on the table."
Those who are newly eligible will be able to get health insurance in two ways. Individuals with an income as much as 400 percent above the poverty level will be able to buy insurance through a state insurance exchange, an insurance marketplace where people can choose from several plans. As he said he would, Gov. Steve Beshear ordered the creation of such an exchange today, noting that "Kentucky has been systematically preparing to meet the implementation deadlines set forth in the bill as a precautionary matter." Individuals who are part of the exchange will get federal subsidies to help pay their premiums.
The other means to get coverage will be through the law's expansion of Medicaid coverage. People who have an income 133 percent above the federal poverty level will qualify for Medicaid starting in 2014.
Though the Supreme Court also upheld the the law's Medicaid expansion, it ruled the federal government could not take away existing Medicaid funding from states that decide to opt out of the expansion. If Kentucky opts to expand Medicaid, it will eventually cost the state money. For the first five years, the federal government will foot the bill for those who are newly eligible. But in 2019, states will have to start paying 10 percent of that sum. Beshear has expressed concerns over how the state will do that. Spokespersons for Beshear and Senate President David Williams both said they are researching the matter.
John Barro of Bloomberg News predicts that all states will opt for expansion because the federal government will pay for it in the early years. "That's a pretty big carrot," he writes. "States that refused to expand Medicaid will be rejecting nearly free federal money. Such a rejection would be tantamount to saying that government health insurance for low-income people is so undesirable that a state is not even willing to pay 10 cents on the dollar for it." For more on Medicaid, the states and the politics of the issue, see this post on The Rural Blog.
At the center of the Supreme Court debate was whether the government can force people to buy health insurance, a provision often referred to as the individual mandate. Insurance companies agreed to stop denying coverage due to pre-existing conditions because of the mandate, which grows their pool of customers by 30 million people. But if the mandate had been struck down and insurance companies still couldn't refuse customers because of pre-existing conditions, premiums would have skyrocketed.
The Obama administration said the individual mandate was constitutional under the commerce clause of the Constitution, which states that Congress can use its powers to regulate interstate commerce. Chief Justice John Roberts rejected that argument but sided with the court's four liberal justices because a penalty for refusing to buy health insurance — which is part of the mandate — is the equivalent of a tax.
Aside from more Kentuckians being eligible for health insurance, the law will mean:
• Children will be able to stay on their parents' insurance up to the age of 26.
• The Medicare "doughnut hole" in prescription drug coverage will be eliminated, something that will impact 129,000 Kentuckians.
• Health plans will be required to cover preventive services like screenings.
And, though "today's ruling is no way going to diminish the toxicity and politicking on both sides," most people agree children will benefit, said Terry Brooks, executive director of Kentucky Youth Advocates. He said the law provides additional oral health coverage, allows foster children to keep health insurance coverage until the age of 25; and provides "a dedicated stream of revenue for school-based health services."
But Sen. Mitch McConnell, R-Ky., issued a statement calling the law "terrible," saying it has "limited choices," "increased health care costs" and "made it harder for American businesses to hire." He said Congress must act to repeal what he called a misguided law.
Williams called the ruling a victory for President Obama and Beshear but not for Kentucky's small- or medium-size businesses owners.
Whether Kentucky has the medical infrastructure for 500,000 more people having health insurance is uncertain. In Jefferson County alone, 455 primary-care doctors will be needed by 2020 — almost as many who work in medical practices now, Patrick Howington reported for The Courier-Journal this year. "I think the provider shortage is definitely a concern," said Jodi Mitchell, executive director of Kentucky Voices for Health. "That's something to be looking at."
As for how individuals should proceed, Mitchell said Kentuckians "need to stay informed during implementation and stay engaged."
Kentucky Health News is a service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.