In 2014, the Gap Will Widen between the Health and Mental Health "Haves" and "Have Nots"

Let’s open 2014 with four health policy predictions.  Here are the first three:

• Obamacare enrollments will top 5 million.
• Uninsured rates will come down.
• Health inflation will tick up.

Here’s why you can count on these.  

First, 1.1 million people have already enrolled in Obamacare.  The Administration hopes for 7 million by March.  That may be optimistic, but there will be another burst of enrollments in a couple of months.  And there will be another open enrollment period toward the end of the year. 

So at least 5 million enrollments seems reasonable.  And here is a bonus prediction.  If that many sign up, the politics of Obamacare in the half of the states that have embraced it will probably shift during the 2014 election cycle.  Their people will, too.

Second, the number of people who are uninsured will go down.  A 1 or 2 percent decline will be attributable to Obamacare.  The improving economy will also help.  And this means that the numbers will be better even in the states that did not embrace Obamacare.

Third, because more people will be insured and getting care, health inflation will go up again.  Both the Congressional Budget Office and the Administration have been predicting this for 2014 ever since the passage of Obamacare. 

In fact, if it doesn’t happen, this will probably be the health policy news story of the year.

But the fourth prediction may be most significant of all.  The gap will widen between the states with better health and mental health care and those with worse. 

And this has everything to do with Medicaid money.

As of December, the states were literally divided down the middle between those that decided to expand Medicaid in 2014 and those that did not.  If you compare the 26 states (including the District of Columbia) that decided to expand Medicaid to the 25 states that did not, the expanding states already have a decided advantage in supporting health and mental health care.

And with hundreds of billions more dollars flowing into those states over the next few years, that gap will probably widen.

Consider how these Medicaid dollars could widen the gap in just two areas – the number of nationally-ranked hospital specialty programs in a state and mental health spending. 

First, think about the high-quality hospital specialty services we all want and sometimes need.  Hospitals rely on Medicaid dollars for a significant portion of their revenue.

Medicaid-expanding states already have significantly more nationally-ranked hospitals and specialty programs, according to the U.S. News and World Report 2013-2014 rankings, than states that do not.

Seven of the ten states with the greatest numbers of nationally-ranked specialty programs decided to expand Medicaid.  And consider the advantage already enjoyed by California (ranked #1 in number of nationally-ranked specialty programs) and New York (#3) over the two most-populated states that decided not to expand Medicaid – Texas (#6 in number of nationally-ranked specialty programs) and Florida (#11).

California and New York, with 678 hospitals between them, are home to a total of 28 hospitals with at least one nationally-ranked specialty, with a total of 154 nationally-ranked specialties overall.

Texas and Florida, with 895 hospitals between them, are home to a total of 16 hospitals with at least one nationally-ranked specialty, with a total of 70 nationally-ranked specialties overall.

Texas and Florida are leaving as much as $100 billion on the table over the next ten years, much of which would have ended up on hospitals’ bottom lines.

The same point can be made regarding funding for care for people with mental illnesses – on whose behalf many of those Medicaid expansion dollars will be spent. 

The 26 states expanding Medicaid already spend much more on mental health services than those are not.  And the disparity is striking.  According to the Kaiser Family Foundation, the average state spends $120 per capita on mental health agency programs. 

But the states expanding Medicaid spend $139, on average, compared to $116 by states that refused.

And even these spending numbers look artificially close because of high per capita mental health spending in states like Alaska and Maine, which have small populations.  When population size is taken into consideration, as is clear from the pie chart above, the expanding states account for nearly twice as much of the nation’s per capita mental health spending as do the non-expanding states. 

And that gap – like the gap between the “haves” and “have nots” – will only widen in 2014.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Obamacare Crashes Again?

There are bad reviews and then there are bad reviews.  But it would be difficult to imagine some worse headlines than the ones Obamacare has received during the past month.

My favorite for over-the-top headline?  How about this gem from the National Journal: “Why Obamacare May Be Obama’s Katrina, Iraq.” That’s right.  An initiative to insure millions of Americans has been equated with the most frightening American natural and man-made disasters of the 21^st century. 

In a world in which we have come to expect tight plotlines, heroic successes, and quick and satisfying endings, I imagine that a blockbuster like Obamacare was never going appeal to critics.

The Obamacare story is being reported this month as if it were a classic disaster movie, with millions of people about to be left out in the cold to fend for themselves in a chaotic healthcare system as Obamacare exchanges crash and burn around them.

But that’s not close to reality.

This week’s announcement that the Obamacare website will work 90 percent of the time (which is another way of saying it still could be down over two hours per day) is hardly worth celebrating.  But the truth is that Obamacare itself is unfolding pretty much as expected.  The changes to the system that have been in place are for the most part popular and glitch-free.

And in another thirty days, people with pre-existing conditions will be guaranteed insurance at the same price as everyone else.  In roughly half the country, people with incomes below 138 percent of poverty will start to receive Medicaid benefits.  And nearly everyone with incomes up to 400 percent of poverty who purchase insurance through the exchanges will be given tax credits that make it more affordable.

But one big number – seven million – is already setting up Obamacare for a disaster sequel in the spring.

That’s the number of people who are supposed to get insurance through Obamacare exchanges by March.  And when the October and November numbers were slower than desired, another Obamacare disaster narrative began to take shape.

But no one ever thought that signing up seven million people would be effortless.

In fact, way back in March, Phil Galewicz wrote an insightful and prescient article for Kaiser Health News in collaboration with the Washington Post.  He quoted several people who are familiar with the challenges of enrolling people in health insurance programs.  He and they highlighted some of the issues that would confront the Obamacare exchanges.  The article’s conclusion?  People should be prepared for a “slow ramp up.”

In this context, some of the early numbers don’t look so bad after all.

Californians alone had completed over 360,000 insurance applications as of November 19.  Covered California - the state’s exchange – reported that 135,000 would qualify for the state Medicaid program and 80,000 others had already selected a health plan. 

And, according to the exchange, sufficient numbers of those people appeared to be young enough that the California program wouldn’t sink into the sea.

In New York, the reality was similar. As of November 24, according to its marketplace, NY State of Health, over 257,000 people had completed applications, and over 57,000 people were enrolled in insurance plans.

And in Kentucky, 60,000 people have already obtained either Medicaid or private insurance through its exchange.  And of those signing up for private insurance, 41 percent are in the 18-34 year old group.

CNN also reported in mid-November that the Washington and Connecticut exchanges were generating healthy enrollment numbers.  And the federal exchange numbers were not as bad as one might expect.  The November numbers included over 100,000 sign-ups despite the balky website, and according to HHS and CNN over 900,000 more people had completed applications. 

So how did CNN headine this good news?  “Obamacare success story sours.”

What will it mean if 4 or 5 million, not seven million, people enroll by next spring?  That will be enough to drop the uninsured percentage nationally from 15.4 percent to around 14 percent.

That might warrant some favorable reviews.

But if the reporting of the Obamacare story next spring is anything like it has been over the past month, the headline you will be reading may well be “Obamacare Crashes Again.”

So stay tuned.  And in the meantime, imagine what things would be like if the alternative to Obamacare had passed.  And believe it or not, there is one – from 2009.  In my next column, I’ll take a look at how it might be faring today.  You’ll be surprised.  

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/