Advancing the Debate: Political, Fiscal Costs of the Medicaid Expansion

11 GOP governors have rejected the Medicaid expansion, but some are endorsing it -- even though they lambasted so-called "Obamacare."
by | February 11, 2013
 

When the U.S. Supreme Court made it optional for states to expand Medicaid under the Affordable Care Act last summer, no one was sure which Republican governors -- if any -- would accept the federal money.

States that agree to expand will have to increase their Medicaid eligibility to 133 percent of the federal poverty level, which is esimated to add up to 17 million to state Medicaid rolls.

Last week, John Kasich and Rick Snyder, the Republican governors of Ohio and Michigan, respectively, announced that they would take the money; Arizona’s Jan Brewer, Nevada’s Brian Sandoval, New Mexico’s Susana Martinez and North Dakota's Jack Dalrymple -- all Republicans -- have also decided to expand Medicaid in their states.

In all, 21 governors and the District of Columbia have decided to participate in the expansion so far.

”It all comes down to dollar signs,” writes Governing’s Dylan Scott. "If states choose to expand Medicaid, the federal government will cover 100 percent of the costs from 2014 to 2016. The feds' contribution will begin to decrease in 2017, but will never be less than 90 percent."

While governors' stances are important, so are state lawmakers' because it's up to the legislatures to pass legislation to enact the expansion.

In Utah, where GOP Gov. Gary Herbert hasn't made an official decision on the Medicaid expansion, Republican leaders are divided.

In a guest column for The Salt Lake Tribune, David Irvine, a former Republican member of the Utah House of Representatives, balked at the notion that his state might choose not to bring nearly 50,000 uninsured Utahns into Medicaid. Meanwhile, Utah state Sen. Allen Christensen, a co-chair of the Senate’s Social Services Appropriation Subcommittee, told the Salt Lake City Weekly that Utah residents have too much pride to accept a handout. Irvine argued that it was easy for Christensen to snub the expansion, given that he and his legislative peers already have health-care coverage.

"Legislators, for the most part, live on a completely different planet. They live in comfortable homes, they don’t miss meals, and every part-time one of them is covered by a gold-plated health insurance plan not available to any other part-time public employee. And if they serve a few terms, they and their spouses get free health insurance for life, above and beyond Medicare. Nice work if you can get it."

So far, governors in 11 states have refused to endorse the expansion, most recently Pennsylvania Gov. Tom Corbett.

Karen Heller, a columnist for the The Philadelphia Inquirer, expressed her disappointment at Corbett’s decision, which makes Pennsylvania the first “blue state to reject the coverage for now.” Pennsylvania is led by a Republican governor and a GOP-dominated legislature, but the state went to President Barack Obama in 2008 and 2012. Corbett was one of the attorneys general that filed a lawsuit about the Affordable Care Act against the Obama administration.

Quoting from estimates by the Pennsylvania Health Law Project, Heller said Corbett was refusing $17 billion in federal aid for the next six years, which would deprive nearly three-quarters of a million people of Medicaid coverage.

A common argument against expansion is that long-term costs associated with new Medicaid enrollees would overburden state budgets.

“Yet Pennsylvanians, through federal taxes, will pay for the expansion regardless,” Heller writes. “Which means we'll subsidize health coverage for residents of neighboring Ohio, New York and Maryland while watching our residents go without.”

In light of Ohio Gov. Kasich’s decision to expand, The Herald-Dispatch in Huntington, W.Va., examined the basic rationales for and against expansion in its home state and its southwestern neighbor, Kentucky.

“Clearly, the increased long-term costs will be a challenge, but both states struggle with the poor, unhealthy populations that will benefit from the expansion,” the newspaper’s editorial board writes. “As Kasich points out, passing on a chance to improve that work force puts both states at an ever greater disadvantage when it comes to economic development as well as quality of life.”

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