Republican governors are rethinking Medicaid expansion under ObamaCare

by Russell's Rants

Originally published February 28, 2013

New Jersey Governor Chris Christie Gives Annual State Of The State AddressJust today Governor Chris Christie announced that New Jersey would accept expanded Medicaid coverage provided by the Affordable Care Act. Christie joins a growing list of Republican governors who have similarly signed on to this important component of ObamaCare. The divide between Republican governors accepting and those rejecting Medicaid expansion seems to be breaking down by politics and demographics.

Of the approximately 30 million individuals that the ACA was designed to insure, about half are mandated to purchase coverage in the newly created exchanges, with financial assistance when needed, and the other half, who are more economically disadvantaged and fall within 133% of the poverty rate, are slated to get coverage through the expansion of Medicaid that the states administer. When the Supreme Court upheld the constitutionality of the Affordable Care Act last June, its ruling embedded what some saw as a poison pill on Medicaid expansion.

Seven of the nine justices found law’s offer of new Medicaid dollars to the states unconstitutional because it was an all-or-nothing deal. If a state chose not accept the expansion, then it lost all of its preexisting Medicaid funding. Or in Chief Justice John G. Roberts, Jr.’s words, Medicaid expansion is a “gun to the head” because the “threatened loss of over 10 percent of a State’s overall budget… is economic dragooning that leaves the States with no real option but to acquiesce.” The remedy, approved by a slightly different 5 member majority, was to let each state choose for itself whether to accept Medicaid expansion.

In the immediate aftermath of the Supreme Court ruling, Democrats were bullish on the states choosing to participate.

Jack Lew, the President’s then Chief of Staff, now Treasury Secretary, expected the “vast majority of states” to accept Medicaid expansion. He explained the legal and economic justification for doing so:

“To be clear, the expansion of Medicaid coverage for those who can’t afford it was upheld. . . . And states are now in a position where the federal government is saying we will pay 100 percent of the cost of covering those people.”

Nancy Pelosi, the top Democrat in the House, concurred, saying, “I don’t think governors will turn that down. People have the need, the urgency is there. . . . Once this bill is rolling and people experience benefits of it, it’s very hard for a state to say [no].”

But “no” the states led by Republicans began to say.

Starting in early July, from Bobby Jindal of Louisiana to Nikki Haley of South Carolina to Rick Perry of Texas, Republican governors started rejecting Medicaid expansion. Governor Perry put it with his characteristic bluntness: “If anyone was in doubt, we in Texas have no intention to… expand Medicaid under ObamaCare.”

Something interesting unfolded, however, after the November elections when even House Speaker John Boehner had to concede that the Affordable Care Act is the “law of the land” and would not be repealed. Several Republican governors announced that their states would, in fact, accept Medicaid expansion. Some are hard right conservatives, including Jan Brewer of Arizona, and just last week, Rick Scott of Florida, who was such a nemesis to ObamaCare that his state was the lead plaintiff that sued to overturn it in the courts and vowed never to implement it.

So what’s going on?

First, it’s economics. It is financial malpractice for a governor to reject federal funding that the taxpayers of his or her state have already paid for – which malfeasance is compounded by the suffering that would be inflicted on the poorest among us that the program was designed to aid. In Florida, for example, without Medicaid expansion, some 1.3 million people would go uninsured and the state would lose $26 billion in aid over the next 10 years. Even more, state-run hospitals were facing the literal prospect of bankruptcy because they are counting on the extra Medicaid funding to make up for the loss a federal indigent care reimbursement program that they traded for the ACA. Similarly, in New Jersey, Medicaid expansion will cover 300,000 new low income earners and bring an infusion of $1.7 billion to the state next year.

Indeed, the federal government will cover all of the expansion for the first three years, after which federal coverage will still remain at 90%. A pretty good deal.

But, second there’s always the politics. To date, 28 states and the District of Columbia are participating or leaning in favor, including now 8 states led by a Republican. Another 16 states have rejected the program or are leaning against it – all with Republican governors.

There is an obvious divide between the dueling Republican governors. Those opting out are thought to have national ambitions to seek the Republican nomination for president in 2016, including the aforementioned Jindal, Haley and Perry, along with Scott Walker of Wisconsin. By contrast, those opting-in face reelection in their home states next year, including Scott in Florida and John Kasich in Ohio. Or they hail from states with large minority, especially Latino, populations that would not look kindly on their governor forgoing this program, which may explain Arizona’s Brewer as well as New Mexico’s Susana Martinez and Nevada’s Brian Sandoval.

We saw a similar divide among House Republicans on their New Year’s Day vote to avoid the Fiscal Cliff. Boehner let the bill come to vote, and it was passed by a combination of moderate Republicans and Democrats — with the acquiescence of practical Republicans. But all of the up-and-coming crop of Republicans, including Jeff Flake, Tim Scott, Mike Pence and Shelley Moore Capito, followed Eric Cantor in voting against the compromise.

And how to explain Chris Christie, who is also thought to hold 2016 presidential dreams? He’s up for reelection in New Jersey this year and demonstrated during Hurricane Sandy that he knows how to bring home the bacon. It boils down practical local versus ideological national politics for Republican governors deciding to accept Medicaid expansion.

Chris Christie – New Jersey

New Jersey Governor Chris Christie Gives Annual State Of The State AddressAccording to the Advisory Board Company, which is keeping track of each state’s decision on Medicaid expansion, Chris Christie became the latest Republican governor to in his Feb. 26 budget address to announce that New Jersey will participate. The ACA provision is expected to extended Medicaid coverage to about 300,000 uninsured New Jersey residents

Jan Brewer – Arizona

Supreme Court Hears Oral Arguments On Arizona Immigration LawGov. Jan Brewer (R) in her 2013 State of the State speech, delivered on Jan. 14, announced that Arizona will participate in the Medicaid expansion, which would extend health care services to an estimated 300,000 more state residents. Brewer noted that the expansion plan will “include a circuit-breaker that automatically” would reduce enrollment if federal reimbursement rates decrease.

Rick Scott – Florida

Florida Gov. Scott Visits Opening Of Advanced Pharma FacilityGov. Rick Scott (R) on Feb. 20 announced that the state will participate in the ACA’s Medicaid expansion, citing HHS’s conditional support for a waiver to shift most of the state’s Medicaid beneficiaries into a managed-care program. However, Scott said that Florida would only participate in the expansion for three years before reevaluating the decision. Supporters of the ACA heralded Florida’s shift as a major reversal; Scott mounted his successful campaign for governor in 2010, in part, by being one of the nation’s foremost critics of President Obama’s planned health reforms.

Rick Snyder – Michigan

Governor Snyder Holds Roundtable On Detroit's Financial CrisisGov. Rick Snyder (R), in a statement released on Feb. 6, announced that his fiscal year 2014 budget proposal includes a plan to expand the state’s Medicaid program under the Affordable Care Act. The plan would extend Medicaid benefits to about 320,000 eligible residents. Snyder said the plan contains safeguards that will ensure the financial stability of the program and protect against changes in the government’s financial commitment to the expansion.

Brian Sandoval – Nevada

National Clean Energy Summit 4.0 Takes Place In Las VegasGov. Brian Sandoval (R) on Dec. 11 announced that the state will participate in the Medicaid expansion. “Though I have never liked the Affordable Care Act because of the individual mandate it places on citizens, the increased burden on businesses and concerns about access to health care, the law has been upheld by the Supreme Court,” Sandoval said in a statement, adding, “As such, I am forced to accept it as today’s reality and I have decided to expand Nevada’s Medicaid coverage.”

Susan Martinez – New Mexico

c3edf3f076705bfdcfe4c3d8fae824ecGov. Susana Martinez (R) on Jan. 9 announced that her state will participate in the Medicaid expansion, which potentially could extend health coverage to nearly 170,000 additional low-income uninsured residents. Martinez noted that contingency measures will be established if federal funding for the expansion diminishes, which would mean scaling back the expansion by dropping newly covered beneficiaries from the Medicaid rolls.

Jack Dalrymple – North Dakota

e7017f22aad6d275c7e075cf640e3c9cGov. Jack Dalrymple (R) in January said the politics associated with the ACA should not prevent North Dakota from participating in the Medicaid expansion. He is supporting a bill that would allow the state health department to access federal funds allocated through the ACA. Dalrymple also said he will include the expansion in his budget proposal and that members of his staff will testify in favor of the expansion before state lawmakers.

John Kasich – Ohio

Bipartisan Governors Delegation Meets With Obama At White HouseGov. John Kasich (R) on Feb. 4 announced that the state will be participating in the Medicaid expansion, the Cleveland Plain Dealer reports. He made the announcement in his two-year budget announcement, but warned that Ohio would “reverse this decision” if the federal government does not provide the funds it has pledged to the expansion.