Much has been made of governors’ declarations about the Affordable Care Act’s now-optional Medicaid expansion, but legislatures will have the final word. Case in point: Nebraska, where Gov. Dave Heineman has said he staunchly opposes the expansion, but a top legislator tells Governing he’s confident a coalition of lawmakers would come together to override the governor’s veto.
Legislation to expand eligibility for Medicaid in Nebraska to 138 percent of the federal poverty level (the ACA’s new threshold) will be introduced as soon as the state’s legislature convenes on Jan. 8, says State Sen. Jeremy Nordquist, a Democrat who has taken the lead on the issue in the legislature. State Sen. Kathy Campbell, the Republican health committee chair who has worked with Nordquist, confirms that she will propose the bill and supports the expansion.
That’s how the expansion will likely happen in most states: a bill passed through the legislature, which requires the state Medicaid office to submit a Medicaid State Plan Amendment to the Centers for Medicare and Medicaid Services (CMS). The Illinois General Assembly introduced an expansion bill last week, the first of its kind.
Governors, including those like Heineman who have said that their state shouldn't expand, will then be forced to either veto a bill passed by the legislature or reverse their position on the expansion and sign it.
Given Heineman’s past stances, including a firmly worded letter he sent to legislative leaders in July in which he said Nebraska “cannot afford” the Medicaid expansion and that it would lead to cuts to public education and other programs, simply signing an expansion bill would be a striking reversal. So a veto appears likely.
But that’s where it gets interesting: Nordquist says he believes the legislature could muster up enough votes to override Heineman’s veto. It takes 30 votes from the 49 lawmakers in the state’s unicameral legislature to overturn a governor’s veto. There will be 17 Democrats and two independents who will likely caucus with them in 2013, which means at least 11 Republicans would have to buck their national party line and support a key provision of the ACA.
Nordquist says he can do it—and he cites recent history for his confidence.
In 2010, CMS told Nebraska that it could no longer provide prenatal care to undocumented immigrants through Medicaid. But there was a loophole of sorts: By switching that coverage to the Children’s Health Insurance Program, the care could continue. So, earlier this year, the Nebraska Legislature passed a bill to do just that—and Heineman promptly vetoed it, saying that taxpayer dollars should not fund health care for people who are here illegally.
That set off a lobbying race by Nordquist and supporters to get the necessary votes to override the veto. And by appealing to the pro-life beliefs of the Republicans and allying with health-care providers, they did it. A coalition of 15 Democrats and 15 Republicans voted in April to overturn Heineman’s veto.
"Looking at that context, because we were able to do it on such a controversial issue, it gives me a lot of hope that we can build another coalition” on the expansion, Nordquist tells Governing.
Campbell, who voted in favor of the first veto override and says she would lobby to do so for the Medicaid expansion if need be, is more reserved, but agrees that they could potentially find the votes to push the expansion through.
"I don’t think it is impossible to override a governor’s veto," she says. "I do think it will continue to be difficult."
Here’s how Nordquist's political calculus works out: he says 20 legislators solidly support the expansion, five are leaning toward supporting it, and another 14 are “gettable.” That gives the expansion supporters a little wiggle room in finding the 30 votes they need to override a potential veto.
How will Nordquist bring them around? It’s a fiscal argument, he says. The state legislative fiscal office estimated that Nebraska will spend $123 million by 2020 on the expansion. But there will also likely be savings and new revenue. The fiscal office projected the state would save $100 million by 2020 because of the ACA provision that guarantees coverage regardless of preexisting conditions, which will eliminate the need for a state program that provides subsidies for high-risk insurance buyers. That money alone almost offsets the cost of the expansion, Nordquist notes.
There is also an economic incentive, an argument that is appearing in other states where the executive branch has said it opposes the expansion. A study by the University of Nebraska Medical Center estimated that the state’s health-care providers would save up to $325 million in uncompensated care costs by 2019 because more people would have insurance. The study also projected $700 million in new annual economic activity and as many as 10,000 new jobs because of an infusion of up to $3.5 billion in federal funding for the expansion. (The federal government covers 100 percent of the costs through 2016 and never less than 90 percent after that).
“It’s not going to be as much of a cost as some people want you to think,” Nordquist says, alluding to Heineman’s argument that other programs would have to be cut. He will also have the backing of the state hospital and medical associations, which are already meeting with sitting lawmakers and newly elected legislators to lobby for the expansion.
Nebraska isn't the only state where a potential showdown on the expansion is emerging between the governor and the legislature. The New Jersey Senate has passed resolutions calling for the expansion, while Gov. Chris Christie declined to state his support. Missouri Gov. Jay Nixon says he supports the expansion, but Republican legislative leaders do not. Even in Texas, where Gov. Rick Perry has become a national figurehead for opposing the expansion, Democrats in the legislature told the Texas Tribune that they believe they could swing enough Republicans, who hold a solid majority, to overrule Perry.
The map below details each state's uninsured population that could be eligible for Medicaid and each state's expected spending for the ACA's Medicaid expansion. Darker states have higher percentages of uninsured residents who are potentially Medicaid eligible. Click a state for additional information.
Zoom out to view Alaska and Hawaii data.
SOURCE: Medicaid eligibility estimates obtained from Urban Institute analysis of American Community Survey and Integrated Public Use Microdata Series data. State spending figures obtained from Medicaid Coverage and Spending in Health Reform: National and State‐by‐State Results for Adults at or Below 133% FPL, published May 2010 by the Kaiser Family Foundation.