CA Wins if Obamacare Loses

March 30, 2012

Kamala Harris must be chagrined.

The California attorney general filed an amicus brief with the U.S. Supreme Court urging the justices to uphold the constitutionality of the federal Patient Protection and Affordable Care Act.

But after three days of oral arguments this week, even Harris must be resigned to the likelihood that the high court will not merely do a “salvage job” on Obamacare, as Justice Ruth Bader Ginsburg pleaded, but blow it up altogether.

Not since the mid-1930s, when the nation’s highest court threw out key parts of Franklin D. Roosevelt’s New Deal, has a president suffered such a supreme beatdown.

But Californians need not fret, no matter the lamentations of Harris, California’s mostly Democrat congressional delegation and the state’s health care industrial complex.

Obamacare’s defeat will be California’s victory.

That’s the conclusion that may be drawn from the friend-of-the-court brief filed by the Pacific Research Institute, the Benjamin Rush Society, Docs4Patient Care, the Galen Institute and Ms. Angel Raich. PRI is CalWatchDog.com’s parent think tank.

The brief makes the persuasive case that, if the federal health reform law is fully implemented, it will mean higher health care bills for California and others states.

‘Pipes Plan’

Sally C. Pipes, president and CEO of San Francisco-based PRI and the author of “The Pipes Plan: The Top Ten Ways to Dismantle and Replace Obamacare,” explained why in an op-ed published this week in Investor’s Business Daily.

She noted that defenders of the president’s health reform law claim that its so-called “individual mandate” requiring every American to buy health insurance is needed to reduce cost-shifting to the insured by the uninsured who cannot pay fully for coverage.

But “the new law will actually increase the cost shifts, contrary to the claims of its defenders,” she wrote.

Indeed, Obamacare will expand Medicaid, adding nearly 2 million Californians to the rolls. Argued Harris, “Extending Medicaid to all low-income adults is vital to ensuring that every individual has access to affordable and reliable health insurance.”

But the problem, Pipes points out, is that Medicaid provides very low reimbursement rates for doctors and hospitals. So low, in fact, it often doesn’t cover a health care provider’s costs.

So it actually will cost hospitals here in the Golden State more to provide health care for 2 million new Medicaid patients than it currently costs the hospitals to provide care for uninsured patients who show up in their emergency rooms and don’t pay for their treatment.

While the status quo is far from ideal, it will cost California billions of dollars less each year than Obamacare.

Yet, if California decided not to go along with the president’s putative health care reform, if the state refused to add another 2 million residents to its Medicaid caseload, the federal government would withhold matching funds it currently sends to Sacramento to partially pay the cost of health coverage for the state’s existing Medicaid recipients.

Defenders of Obamacare are asking the Supreme Court to endorse an “extreme proposition,” in the words of Justice Anthony Kennedy. If, as expected, the high court refuses to do so, no state will benefit more than California.

– Joseph Perkins