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Chaney readies contingency plan if court rules against insurance exchanges


The Mississippi Insurance Department has developed a proposed contingency plan  in case the U.S. Supreme Court invalidates federally run health-insurance exchanges in 36 states, including Mississippi.

Insurance Commissioner Mike Chaney said Thursday in an interview with the Mississippi Business Journal that the replacement would protect the federal tax credits that would otherwise be lost to about 100,000 Mississippians. That would make coverage more expensive or unattainable.

The court is expected to hand down a ruling by the end of the month before it takes a break till October.

The exchanges — set up as a result of the Obama administration’s Patient Protection and Affordable Care Act, which mandates that all Americans have health insurance — offer subsidies for coverage.

But plaintiffs in King v. Burwell,  the case before the Supreme Court, citing language in the law, argue that it only applies to exchanges “established by the state,” not those set up by the federal government.

Supporters of the law argue that the legislation passed in 2010 clearly meant that subsidies would be offered in all states.

Mississippi defaulted to the federal model after Gov. Phil Bryant blocked setting up a state exchange. There are 14 exchanges run by states.

Chaney made two subsequent efforts to establish a state exchange, but after Bryant ruffled feathers in a letter he sent at the end of 2012 to  Washington, D.C., officials that said that he “didn’t want the state to have anything to do with the Affordable Care Act. Period. And that he thought that he was the proper authority to say no, which is debatable because he is not the elected insurance commissioner. And I chose just not to fight with him,” Chaney said.

President Barack Obama and then-Health and Human Services Secretary Kathleen Sebelius subsequently refused to consider the followup proposals, Chaney said.

“They made their decision based on the letter,” he said.

Now Chaney says he has sent the contingency plan to Bryant, Lt. Gov. Tate Reeves and House Speaker Philip Gunn. The plan will not move forward on the replacement for the exchange unless there is a consensus between the four state officials — and then only if there is a ruling adverse to the federal government.

It would entail funneling federal money through the existing Mississippi Comprehensive Health Insurance Risk Pool Association to private insurers, said Chaney.

“That means that the state doesn’t have to put up millions of dollars to operate one or develop the technology the feds want us to use,” Chaney said. The federal government would have to approve the plan, Chaney emphasized.

The federal government currently pays for 74 percent of Medicaid insurance in Mississippi.

When the act was passed, it was intended that Medicaid would be expanded nationwide, so subsidies in the exchanges were not designed to apply to people living below the poverty level, since they were expected to have access to Medicaid, according to healthcare.org.  But in 2012, the Supreme Court ruled that states could opt out of Medicaid expansion, and Mississippi is one of 23 states that have not expanded their programs.

The latest volley from the Obama administration effort to expand Medicaid coverage was fired last week.

The White House Council of Economic Analysis issued a report saying that if Mississippi expanded its Medicaid coverage, another 139,000 residents would have insurance next year. As of last month  743,362 Mississippians were enrolled in Medicaid.

Further, the White House Council said that refusal to expand Medicaid in Mississippi would cost the state $1.38 billion in federal revenue in 2016.

The council said that injection of money would invigorate the state economy as well.

Health-care costs through Medicaid expansion is paid for with 100 percent federal funds in calendar years 2014‐2016, 95 percent in calendar year 2017, 94 percent in calendar year 2018, 93 percent in calendar year 2019, and 90 percent in calendar years 2020 and beyond.

Bryant’s response last week to the White House release on Medicaid expansion may not bode well for reaching a consensus among the Mississippi officials on the related issue of insurance exchanges.

Bryant said in a prepared statement posted in a story on the WLBT-TV website:

“Mississippi is one of many, many states that have chosen not to saddle taxpayers with the crushing burden of additional Medicaid costs by expanding President Obama’s unraveling health care takeover.

“Our state already spends about $1 billion in state taxpayer dollars a year on Medicaid. Even without Medicaid expansion, Obamacare has forced tens of thousands of additional people onto the Mississippi Medicaid rolls, and those numbers continue to climb.

“Signing up for an even larger Medicaid bill would be fiscally unsustainable and would have disastrous consequences for the hardworking taxpayers of Mississippi.”

Efforts to ask Bryant why he thinks the expansion would be unsustainable were unsuccessful.

The Mississippi Division of Medicaid had added about 90,000 beneficiaries in 2014, according to its website.

That increase was largely tied to the new federally mandated Modified Adjusted Gross Income limits, which went into effect Jan. 1, raising the income maximum for eligibility by about 9 percent, and thus enabling more people to sign up for the government insurance program, Executive Director David J. Dzielak said on  the website. Those changes were mandated by the Affordable Care Act, he said.

The Mississippi Health Advocacy Program, which supports Medicaid expansion, conducted a poll by Mason-Dixon in April that reported that a majority of Mississippians support expansion.


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