As "Fiscal Cliff" Looms, Health Reform Questions Linger

By: CBS News (Posted by Josh Mabry)
By: CBS News (Posted by Josh Mabry)

(CBS News)-- Washington lawmakers this month are squarely focused on deficit reduction as they attempt to scramble off the so-called "fiscal cliff." All the while, however, the government is proceeding with the costly and ambitious rollout of the Affordable Care Act.

Key components of President Obama's health care law won't go into effect for about another year, but federal and state lawmakers are obligated to start building up those health care systems now. Many Republicans, however, argue the Obama administration hasn't said with certainty what the programs will ultimately cost or how they'll be governed. Democrats largely chalk up the complaints to the latest chapter in Republican-led obstruction against the Affordable Care Act, pointing to Democratic-led states that are making progress implementing the law.

The "fiscal cliff," meanwhile -- the series of tax hikes and deep spending cuts set to kick in next year -- has cast a shadow over the entire health care debate. While lawmakers spar over the details of large new health care systems, Congress could be forced in the coming weeks to make spending cuts and policy changes to programs like Medicaid.

At a congressional hearing Thursday on the subject of the health care law, Louisiana's secretary of the Health and Hospitals Department Bruce Greenstein told Congress it felt as if they were operating in a "parallel universe."

"It feels somewhat awkward to be here testifying on the implementation of one of the largest expansions of entitlement programs in nearly 50 years," he said, "at the same time as ongoing discussions about federal spending reductions to avert the 'fiscal cliff' and raising the debt ceiling take place."

In spite of those concerns, states face one deadline today: Deciding whether or not they will establish and operate their own health care exchange system -- a state-based online marketplace where consumers should be able to compare health insurance plans and purchase one. If they don't want to build or operate their own exchanges, they can hand the responsibility to the federal government or enter into a state-federal partnership.

At the same time, state leaders are deciding whether to expand Medicaid, the joint federal-state program currently open to disabled and certain low-income people. The Affordable Care Act calls for states to open up Medicaid to anyone below 138 percent of the poverty line -- the Supreme Court, however, ruled over the summer that the Medicaid expansion shouldn't be mandatory. There's no deadline for states to say whether or not they will expand Medicaid.

Through these two components -- the exchanges and the Medicaid expansion -- roughly 36 million people are predicted to obtain health insurance by 2022.

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