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CAPITOL PERSPECTIVES column By J. McManus AMNESTY HIGHLIGHTS THE INEQUITIES OF OBAMACARE LIFESCIENCELEADER.COM JANUARY 2015 10 J O H N M c M A N U S The McManus Group Amnesty Highlights The Inequities Of Obamacare ust days after a thorough drub- bing in the midterm elections when Republicans wrested control of the Senate from the Democrats, winning almost every contested race and stacking up the largest majority in the House since Prohibition, President Obama announced an executive order that will prevent deportation of 5 million illegal immigrants. Providing amnesty was the president's takeaway from the election? This unilateral action says more about his intention to work with Congress for the last two years of his presidency than any statement he could make. But the executive order also highlights the inequities that riddle the implemen- tation of Obamacare. Illegal immigrants in California may soon gain Medicaid coverage that will be financed more than 90 percent by the federal government, while 7 million American citizens who live below the poverty level in 23 states that have not undertaken a Medicaid expansion have no access to cover- age. Nancy McFadden, Governor Jerry Brown's (D-CA) top policy aide, recently stated, "We're evaluating, but the presi- J dent's recent action on undocumented immigrants could perhaps open a door for more coverage of more people under Medi-Cal." California is home to more than one–quarter of illegal immigrants in the U.S. But much of the South and mountain states have refused to expand Medicaid (see attached map), and Obamacare's legislative language expressly prohib- its individuals below the poverty level from obtaining subsidized coverage in the insurance. This decision was made to contain the cost of the program as Medicaid coverage is cheaper than pri- vate coverage because it pays provid- ers substantially less. Republicans sug- gested making private coverage available to all regardless of income, but Senator Mike Enzi's (R-WY) amendment effec- tuating that change was defeated by Democrats on a party-line vote in the Finance Committee. As a result, in states that have not undertaken a Medicaid expansion, a family of four with income up to $95,400 (that is, four times the poverty rate) can obtain subsidized cov- erage, but a family below the poverty line cannot. Huh? In Texas, more than a quarter of the pop- ulation lacks health insurance, and the poorest of those cannot sign up for sub- sidized coverage in the health exchange because that coverage is explicitly lim- ited to individuals above poverty. The architects of Obamacare assumed these individuals would get coverage under Medicaid, yet the Supreme Court made that expansion optional for states. But where is the corrective legislation from the administration? President Obama has put nothing forward to address this glaring deficiency with his law, such as repealing the prohibition of subsidized coverage in the exchange for those under the poverty level. He would rather pon- tificate about state inaction. These inequities may become even more starkly defined when the Supreme Court rules on Pruitt v. Burwell later in June. That case will determine whether Americans living in 36 states who are enrolled in the federal exchange (through the infamously inoperable Healthcare. gov website portal) can continue to receive subsidies for their coverage. If the Supreme Court upholds a logical reading of the statute that subsidies can only flow to an "exchange established by a state," Americans residing in states utilizing the federal exchange cannot receive subsidies, but those enrolled in a state exchange will continue to receive the subsidy. As a result, a citizen residing in Maryland would retain a full subsidy but a citizen with the identical income living just across the Potomac River in Virginia would not get any subsidy. That is how the law was deliberately drafted, as pro- fessor Jonathan Gruber, the key architect of Obamacare, admitted in a now famous leaked video. Just as baffling, Obamacare's expan- sion of Medicaid to an additional 9 mil- lion poor Americans is facing a new threat: Obamacare itself. Responding to the most fundamental problem with Medicaid — lack of access to physicians willing to accept Medicaid's paltry pay- ments — a recent Department of Health and Human Services Office of Inspector General study found that half of physi-