What's Next for the Affordable Care Act?

Obama's reelection means implementation will continue, but much is left to the states.
by , | November 7, 2012
 

For full election coverage and analysis, go to Governing's 2012 Election Center.

Though opponents of the Affordable Care Act (ACA) earned minor victories at individual state ballot boxes Tuesday night, the health-care reform law landed the most important race of all: President Barack Obama’s reelection.

Implementation will go forward. But, because of the law’s structure and the Supreme Court’s decision in June, much of that implementation will be in the hands of the states. Whether to create a health insurance exchange or to expand Medicaid—two pillars of the law that account for almost all of the 30 million people expected to gain insurance coverage—are two decisions that states have to make in the coming weeks, months and years.

Both issues will be the focus of the newly elected state legislatures in January.

“Well, it looks like we are all systems go on implementation,” Matt Salo, executive director of the National Association of Medicaid Directors, told Governing in an email. “We can assuredly expect the floodgates of regulations and guidance to descend soon.”

The health exchanges were always in the purview of the states. The U.S. Department of Health and Human Services (HHS) set a Nov. 16 deadline for states to decide what kind of health exchange they will have (either state-run, federal-run or a partnership) and deliver an outline of what it’ll look like. Federal officials have said they expect to be operating up to 35 federal-run exchanges in 2014, when the online insurance marketplaces open for business, but states can transition in later years to a state-run exchange if they choose.

But the Medicaid expansion decision is a twist from the Supreme Court’s decision in June to uphold the ACA. Chief Justice John Roberts ruled that the federal government couldn’t force states to participate in expanding Medicaid eligibility (up to 133 percent of the federal poverty level). Instead, HHS could still offer substantial federal funds for states to expand, but if they chose not to, there would be no consequences.

Given the amount of federal money available, the number of people who could enroll and the struggles of the Medicaid program during the economic downturn, Salo called the Medicaid expansion “one of the biggest public policy decisions of this generation.”

Several conservative governors have announced that their states won’t expand the low-income insurance program, but the final decisions will be made in next year’s state legislative sessions. Most experts expect most states to eventually expand, considering the financial incentives for doing so, but some could hold out. New federal guidance on the expansion (such as whether states could partially expand) is expected to come quickly with Obama’s reelection.

The new make-up of some state legislatures could complicate the expansion debate. In Arkansas, for example, Democratic Gov. Mike Beebe has said he wants to expand, but Republicans (some of whom have said they are opposed to it) won control of the state legislature Tuesday night.

The election could have fallout for exchange planning, too: North Carolina, for example, just elected a Republican to succeed a Democratic governor who has pursued establishing a state-run exchange.

Though Obama’s reelection means the ACA will stand, there were some bright spots for the law’s opponents in individual states. The one with the most influence on actual policy was in Missouri: with more than 60 percent of the vote, Missourians voted to ban the state from creating a state-run health exchange. That means the federal government will do so.

Voters in Alabama, Montana and Wyoming approved ballot initiatives that effectively forbid state or federal law from enforcing the individual mandate, a key part of the ACA that requires all Americans to have health insurance. However, because of the Constitution’s Supremacy Clause, which ensures federal law supersedes state law, legal experts agree that the votes only have symbolic meaning. The Internal Revenue Service will likely enforce the mandate unhindered, starting in 2014.

“According to our constitution, federal law trumps state law, as long as it is constitutional. So, these ballot votes are politics, pure and simple,” Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University, told Governing prior to the election.

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