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Expect crony health insurers to lobby Congress to extend the costly Medicaid payment increase

12/30/2014

ObamaCare's individual mandate and bailouts aren't enough for the health insurance industry. The looming expiration of the two-year Medicaid payment increase has, once again, put health insurers on the same side as President Barack Obama and congressional Democrats, who want to extend the payments to doctors.

Hoping to attract more primary care providers into Medicaid, the Obama administration temporarily increased payments to doctors who participate in the fundamentally broken program by an average of 73 percent. The cost of the increased payments, which covered only calendar years 2013 and 2014, is "more than $11 billion," according to a May 2012 press release from the Department of Health and Human Services.

But with the payments set to expire at the beginning of 2015, meaning a 43 percent payment cut for doctors who see Medicaid patients, health insurers have an interest in lobbying a Republican-controlled Congress to extend them. "Health insurance companies that contract with Medicaid programs need more doctors than ever in their provider networks given the health law expands coverage to millions of Americans in states that went along with the expansion," The Motley Fool noted earlier this month. "Meanwhile, the number of Americans enrolled in Medicaid and the Children's Health Insurance Programs that contract with private health plans is expected to soar by 13.5 million by 2016, according to a study last month by Avalere Health, a research firm tracking implementation of the Affordable Care Act."

Though it didn't outright commit to extension, Medicaid Health Plans of America, a trade association that represents health insurers that participate in the program, told The Motley Fool that it "supports current payment enhancements made available for Medicaid primary care services" under ObamaCare.

The health insurance industry has proven to be a convenient, though unusual ally for the Obama administration. Lobbyists representing the health insurance industry, along with those working for Big PhRMA, helped write the law. And though they've been blamed for many things that have gone wrong with the implementation of ObamaCare -- such as the millions of health policy cancellations that occurred last year -- health insurers spent heavily to promote plans available on the exchanges, hoping to boost enrollment, a goal that serves mutual interests.

Not only can taxpayers expect the crony health insurance industry to continue to lobby against efforts to repeal the ObamaCare bailout, it's likely that they'll back President Obama and congressional Democrats' efforts to pressure a Republican Congress to extend the costly Medicaid payment increase.