Health Care Reform Is States' Headache

Much of the heat about the effort to change health care is focused in Washington. But the real change is actually up to states. By 2014, they must establish new insurance exchanges where people who need insurance can shop for the best deal. And states must figure out how to expand Medicaid in a time of serious budgetary problems. Host Scott Simon talks with NPR health policy correspondent Julie Rovner about what's to come.

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SCOTT SIMON, host:

The number of Republicans who got elected to Congress earlier this month promised to try and repeal and replace the new federal health care law. In Washington that's a pretty tall order. At least as long as President Obama remains in the White House. But much of the new law needs the cooperation of the states. And the Republicans picked up a net of about half a dozen governorships and 19 state legislative chambers.

NPR's Julie Rovner joins us to talk about what impact state officials may have on the prospects for implementing the new health care law.

Julie, thanks for being with us.

JULIE ROVNER: My pleasure.

SIMON: So it's a federal law. What role do the states have at all?

ROVNER: Well, quite a lot for all the rhetoric about this being a federal takeover of the health care system. States actually have an enormous role to play in implementing the law. Everything from creating and operating these new marketplaces called insurance exchanges, where people will buy insurance, to enrolling low income people in Medicaid, to policing insurance premium rates, how fast they go up.

Now, if the states choose not to do any of those things, the federal government will do them instead. But the anticipation going in with this law is that states would step up and work in partnership with the federal government.

SIMON: And what are we hearing from states, especially those that have elected new Republicans in the state assembly or governorships?

ROVNER: Well, we're hearing a lot of different things. In some cases it's mostly political rhetoric, ranging from some are saying they don't want any part of it - that's what about-to-be former Governor Tim Pawlenty of Minnesota had said, and it looks like he's going to be replaced by a Democrat, who would take a very different attitude. But next door in Wisconsin, a Democrat who was very active in getting his state to act early to implement the law, Jim Doyle, is being replaced by a Republican, Scott Walker, who says he wants to minimize his state's participation.

Then you've got several new Republican governors who want to join in legal efforts to overturn the law on constitutional grounds, although it may be too late for them to join lawsuits. States have mostly been found ineligible to challenge the part of the law that requires most individuals to have insurance, but they are still challenging the part requiring them to expand Medicaid coverage so that people up to 133 percent of poverty have coverage under Medicaid.

SIMON: And speaking of Medicaid, some Republican legislators in Texas have suggested have suggested that the state might pull out of Medicaid. Can they do that?

ROVNER: It's an interesting question and nobody really knows the answer. You know, Medicaid, which is this health program for the poor, the federal government pays just over half of Medicaid costs in every state, and in the poorer states it actually pays vast majority of costs, as much as 80 percent. But states say the money comes with so many strings attached that they can't afford their share, even the states that only pay 20 percent of every dollar. On the other hand, giving up Medicaid would mean states would have to figure out how to cover elderly people in nursing homes, disabled people in and out of institutions, and lots of people with very, very high medical bills.

And you know, the lawsuits that I was just talking about, the crux of one of them is that that requirement to expand Medicaid to people a little higher up the income scale is - actually that requirement is coercive to the states because states can't afford to drop Medicaid. So obviously if states were to go ahead and do it, it would prove that that lawsuit has no merit because states could then do it.

SIMON: So what happens then, Julie, if, say, half the states implement the law aggressively and half choose not to?

ROVNER: You know, I think that was always going to be the case. Yes, there are now several more states that have Republican governors and may come at this law with a little bit of a more jaundiced eye. But even before that we had a relatively even split. And I think states were always going to look at this differently, depending on their populations, on their political cultures, on what they already had going on in their states. So I think states are going to learn from some states' successes and others' failures. Again, states that don't do anything, there is a federal backup. The federal government will come in if states don't do anything. But I think as with everything else with this law, it's a matter of watching and waiting.

SIMON: NPR health policy correspondent Julie Rovner. Thanks so much.

ROVNER: Youre welcome.

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