Obamacare, Medicaid, Medi-Cal, Oh My!

The lawsuit challenging the constitutionality of the Patient Protection and Affordable Care Act (generally called “ObamaCare”) has finally made it to the Supreme Court.  Today, (3/28) in the third day of arguments, lawyers on both sides of the issue will discuss whether the expansion of Medicaid is within Congress’s power to mandate state spending.
There are 26 states involved in the challenge; California is not challenging the law.  The 26 states contend that if they are forced to expand Medicaid, they will be unable to afford to continue participating in the federal program, but also unable to create their own program to help support low-income families pay for their healthcare.

The federal government argues that the states opted into the Medicaid program and that the federal funds associated with the program have always had various restrictions.  Additionally, defining eligibility is within the federal government’s abilities. In exchange for complying with federal guidelines, the states receive federal funds to supplement their programs, like Medi-Cal.

At stake in the case is potentially the Medicaid program as a whole.  Can the federal government place any restrictions on providing the funding to the states it wants?  Will increased Medicaid bankrupt states?  Will states begin opting out of the program?  The outcome of this case may be the determining factor in answering each of these questions.
I will be monitoring the decision, which is anticipated this summer and California’s reaction when it comes out.  For its part, CATO, the independent think-tank, concluded that California’s increase in expenditures will be lower under the ObamaCare plan than it would be under the status quo.  This finding may help explain why California has not joined the lawsuit; namely, it’s increased expenditures in the already cash-strapped Medi-Cal system will at least be lower than without the new program.

However, one of the arguments made by the states is that the states have no ability to manage costs created by increases in eligibility.  Many states have voluntarily expanded coverage in various ways and would like to back-track those expansions to make up for the cost of additional participants.  The law as it stands provides that state Medicaid equivalents must continue to provide the coverage that existed when the law was enacted.

In the short term, it seems that California’s costs will increase simply because eligibility is increased.  Meanwhile, California has been trying to cut Medi-Cal funding for the last several months.  This week, the 9th Circuit Court of Appeals again blocked California’s effort to cut Medi-Cal reimbursements for providers by 10%.  Following the ruling, the state filed an emergency appeal after its attempt to cut Medi-Cal fund was thwarted earlier this year.

In the midst of uncertainty in federal and state health programs, it is important to remember that long-term health, end-of-life, and estate planning should be done comprehensively by an attorney well-versed in all the relevant areas of law.  Additionally, keeping your estate plan updated will ensure that, as the law changes, your plan stays ahead of the curve.

Estate Planning: The Price of Organization, Rewards, Gifts, and Wondrous Tax Things…

FREE REPORT:  This complimentary report, focused on Estate Planning, is comprised of many of Mr. Miller’s articles from his long running column for the largest regional newspaper in San Diego County. This report will guide you through the questions surrounding getting your estate planning in order.