Deal: Major Health Policy Decisions “In a Holding Pattern”

By Mike Klein

Mike Klein, Editor, Georgia Public Policy Foundation

Governor Nathan Deal expressed displeasure with the U.S. Supreme Court decision on federal health care reform during a Thursday afternoon news conference, describing it as “the largest tax increase in the history of the United States, at least $500 billion and perhaps significantly more.”  The Governor also admitted he was surprised by the decision because he thought the Court had given “pretty strong signals” that it had problems with the individual mandate.

The Governor appeared alone when he spoke to reporters and a large crowd that assembled in mid-afternoon inside the State Capitol.  Deal said the state will likely hold off making decisions on several questions until after the November national elections.  Presumptive Republican Party Presidential nominee Mitt Romney has vowed to dismantle the health care law if he is elected.

Deal said Thursday morning’s Supreme Court’s decision does appear to leave states with some flexibility, in particular, whether they will be forced to expand their Medicaid eligible populations.

‘There was at least an area of indication that it was not an absolute mandate,” Deal said.  “The discretion for a state to participate in the expansion of Medicaid was a door that was left open.  The Court has said that would have been an unconstitutional mandate on states.”   (Click here to watch Governor Deal’s news conference on the Public Policy Foundation YouTube channel.)

Georgia estimates its Medicaid eligible population would increase by 620,000 in 2014 based on requirements in the Patient Protection and Affordable Care Act.  On Thursday, Governor Deal said that increase would cost $76.3 million additional state dollars in 2014, and it would result in 24.2 percent of all Georgians being Medicaid eligible.  The current number is 17.6 percent.

Governor Nathan Deal

“As you know, the original legislation (said) that if you did not accept the mandate for expanding the Medicaid coverage up to, in our case 138 percent of the federal poverty level, that you would have lost your federal participation in your existing Medicaid program,” Deal said.  “The Court has ruled that leverage and that coercion was not appropriate.”

Because the law was upheld, Georgia faces a mid-November decision about whether it will create some version of a state health insurance exchange or default to a federal exchange.  Deal said that decision also will likely not be made before the November election.  “We probably are going to be in a holding pattern until we see what the events of November bring us,” he said.

A special committee that considered health insurance exchange models last fall reported to the Governor that while it preferred no exchange, a Georgia created exchange would be preferable to one imposed by the federal government.  The Georgia model could be a state-operated exchange or, the committee recommended, a largely private model with some state oversight.

Responding to a question from the Public Policy Foundation, Governor Deal acknowledged that a regional, multi-state health insurance exchange “is an idea worth exploring.”  The Governor noted, however, that the state passed a law that would allow insurance companies licensed by other states to offer policies in Georgia but, “No company has taken us up on that offer.”

Governor Deal said decisions that need to be made this year – in particular, whether to expand Medicaid eligibility and what kind of exchange to create – should not require a Special Session of the Georgia General Assembly.  However, he thinks one might be necessary next year.

“We’re probably going to be finished with our 2014 budget before we know the answers to those questions that only Congress and the White House can provide,” the Governor said.  The 2013 General Assembly will likely conclude in late March or April, possibly well before Washington has given clear guidelines to states if there is a new administration.  Deal said that could require bringing lawmakers back to Atlanta.  “I will do everything in my power to avoid that,” he said.

The Governor opposed and fought against President Barack Obama’s federal health care reform law during the last of his nine terms as a congressman from Georgia.  “I was surprised by the decision,” Deal admitted.  “I honestly felt that the issue of the constitutionality of the individual mandate was one that the Court had given pretty strong signals that they had problems with.

“It is somewhat ironic to me that it is now constitutional not because it is a proper exercise of the power of federal government under the commerce clause but that it is appropriate only because of the federal exercise of taxation authority over the states and over its citizens.  That’s why I said, if we really want to know what the largest tax increase is, we have just now been given that opinion by the Supreme Court.  It is this piece of legislation that, ironically, is called the Affordability Act.”

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