Who needs Republicans when the administration is proving so adept at destroying its own landmark health care legislation?

Last week, the Department of Health & Human Services (HHS) approved a request from the State of California to institute a ten percent reduction in what it pays physicians willing to care for the state’s Medicaid patients.

While we can all be sympathetic to California’s extreme budget problems, the state already spends less per Medicaid beneficiary than any other state in the nation. As a result, some 50 percent of California’s doctors already refuse to treat patients in the medical safety-net program.

By lowering the meager payment given to physicians still willing to care for the poor, HHS has virtually assured the decline of California’s medical safety net program.

If you doubt this, consider how any health care system can exist without the one element that is wholly and completely irreplaceable- doctors.

According to Dustin Corcoran, CEO of The California Medical Association, physicians in the state could receive as little as $11 per visit for Medicaid patients in the state under the change. “You can’t pay bills at these rates. They are unconscionably low.”

Corcoran may well be right. A few California physicians I spoke with suggest that the newly installed rates will likely not even pay for the cost of employing someone to prepare and submit the payment claims to Medi-Cal (the name of California’s Medicaid program) for collection.

While it would be one thing to write off California as being too big to succeed in the social safety net business, the federal government’s decision to allow the price cuts are guaranteed to have an impact extending well beyond the Golden State. Indeed, state governments from every corner of the country have been awaiting this decision, and the precedent it sets, each ready to file its own application for relief—applications that will now likely be granted as virtually every state in the nation is facing the problem of spiraling medical costs in its Medicaid programs.

When one considers that a key element of the Affordable Care Act is to get millions of additional Americans insured by greatly expanding the Medicaid program, how exactly is this going to work?

The new law is scheduled to extend Medicaid coverage to all Americans with incomes below 133 percent of the Federal Poverty Level in 2014, adding an additional 16 million new beneficiaries to the ranks of Medicaid participants. With fewer physicians likely to be willing to participate in the program, should these payments cuts take root throughout the nation, it is difficult to imagine how there will be enough physicians to care for the increased patient base.

This decision, which promises to have an enormous impact on the ultimate success or failure of Obamacare, comes on the heels of Secretary Sebelius’ announcement that HHS would suspend its efforts to create a government sponsored, self-sustaining, long-term healthcare insurance program for all Americans (CLASS Act.)

While CLASS, until the last few weeks, was not a particularly flashy element of Obamacare, it was actually one of the more important provisions in the law.

The CLASS Act was designed to create a self-sustaining, government operated, long-term healthcare insurance program that Americans could buy into —not unlike a privately operated insurance program.

The program was supposed to bring in enough premium payments from participants so that, based on actuarial schedules of when people are likely to need the benefit, there would always be enough money to cover the costs without the government subsidizing it. Like Social Security, the government would operate it, collect the premiums and then pay out the benefits agreed to.

The problem is that Social Security is mandatory. People who work pay into it via payroll taxes. The CLASS Act should have operated the same way, but Republicans, and many Democrats, were not going to support a mandated insurance program. And so the CLASS Act program was voluntary.

Like all health insurance programs, success depends on a balanced insurance pool where there are enough healthy people contributing to pay for those who are sick and in need of the insurance benefits. In the case of long-term health care, since most participants end up using more, and more expensive, health care when they are older, a successful program would require a sufficient number of younger, healthier participants who will not need expensive benefits for many years.

Without the younger people paying in, the premium costs necessary to make it work—when the pool is comprised of mostly older people—become too expensive and the insurance pool fails. As a result, it is difficult to craft an arrangement that is affordable.

Additionally, the administration was forced to accept an amendment sponsored by GOP Sen. Judd Gregg, which required the government to prove it could operate such an insurance program for 75 years without the need for additional subsidies.

It couldn’t. Still, one would hope that the administration would have been willing to give the effort more than a year before throwing in the towel.

Indeed, even Senator Gregg (now retired) was surprised by the timing of the program’s end. Speaking to Sarah Kliff of the Washington Post about the abrupt demise of the program, Gregg said:

I expected that, at sometime, it would implode because of the amendment. I didn’t think it was a desirable program. I’m surprised at how quickly they came to that conclusion. It took a year of them working on it. I presumed they would probably take a couple of years [to work on CLASS], so they could offset [other health reform] spending, and then run into a wall. When I put that amendment in, it was sort of a torpedo in the midshift because I didn’t think the program would be actuarially sound. I just didn’t see this happening so quickly.

The government’s chief actuary for the effort, Bob Yee, does not agree. Speaking to Forbes magazine, Yee said:

The CLASS Act will unlikely be designed such that it becomes an entitlement program eventually. The statute clearly states that it is a voluntary insurance program. The actuarial oversight required – as evidenced in a number of the provisions in the Act – protects the program from a poor design.

Yee has also indicated that there may have been ways to make the program work had the government given the effort more time.

There is no shortage of Congressional cat-callers who claim that the desire for a national long-term care program was impossible from the outset.

By pushing through the program, the administration was able to include some $70 billion in additional deficit savings. They did this by saying that the government would collect premiums paid by Americans who bought into the program for a four year period before the government would actually begin administrating the long-term health care program. For that period, the revenues collected would go toward deficit reduction.

The administration’s choice to kill CLASS after such a short time makes it difficult to challenge or disagree with these naysayers.

In the interest of maintaining balance in our approach to Obamacare, it is important to remember that much of what remains in the ACA is of great benefit to Americans, no matter what those who wish to politicize the issue would have observers believe. Indeed, the provisions that have already gone into effect have perhaps been a literal lifesaver to countless Americans, including children born with life threatening illness who were, prior to the ACA, unable to get insurance coverage to pay for the medical care they will need throughout their life; and cancer patients who are no longer left to face expensive illness they cannot afford.

There is also every reason to hope that the elements scheduled to take effect in 2014 will also bring positive changes.

Still, if the administration is going to continue to shoot itself in the foot, particularly as it has done with its California decision, how can we be surprised that a recent Kaiser Family Foundation tracking poll reveals that there are fewer supporters of the ACA today than when the law was first passed?

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Rick Ungar is an attorney in Southern California and a frequent writer, speaker and consultant on health care policy and politics. He is a contributing writer at Forbes. Readers can reach him at rickungar [at] gmail [dot] com.