U.S. Chamber of Commerce Uncommitted on Medicaid Expansion

A coalition is coalescing in support of the Medicaid expansion, sparking a nationwide effort to convince skeptical governors and legislators that accepting a windfall of federal money to expand the low-income insurance is a good thing for their state. But those advocates shouldn’t expect the ready help of the U.S. Chamber of Commerce any time soon.
by | January 10, 2013
 

A coalition of hospitals, physicians, mental health advocates and others is coalescing in support of the Medicaid expansion, sparking a nationwide effort to convince skeptical governors and legislators that accepting a windfall of federal money to expand the low-income insurance program is a good thing for their state.

But those advocates shouldn’t expect the ready help of the U.S. Chamber of Commerce any time soon, based on comments made by its president Tom Donohue and Bruce Josten, executive vice president of government affairs, after the Chamber’s 2013 State of American Business address Thursday.

Asked by reporters if they would support the expansion, which is expected to add as many as 17 million people to state rolls by increasing eligibility to 133 percent of the federal poverty level, Josten quipped that they would if the program “doesn’t bankrupt states first.” The economic downturn has hit Medicaid as hard as any state program: state spending jumped more than 25 percent in 2011, according to federal estimates, and was projected to increase another 18 percent in 2012.

However, the federal government will cover most of the expenses for the expansion itself. Still, Donohue portrayed the program’s spending curve as “a rocket shooting straight up in the air, burning and going as far as up as it can.”

“The governors are being very, very careful because they realize they’re in a real pickle,” he said. “You’ll find very careful treading here until everyone can see how this will play out.”

But the Chamber didn’t outright oppose expansion, which was made optional by the Supreme Court last June, either. Some studies have projected that states would actually save money from the expansion, and others have anticipated a positive economic impact. The influx of federal dollars could create thousands of jobs. In addition, businesses that employ largely low-wage workers could elect to drop their workers and pay the ACA’s employer mandate fine, which might be cheaper than private health insurance, while knowing that their employees will have Medicaid as a fallback option - a possibility that Josten alluded to.

But, despite those potential upsides for business, the Chamber isn’t committed to a position on the expansion yet. Some of the largest lobbying groups in the states, particularly hospital associations, are gearing up for the Medicaid expansion fight -- but the Chamber, another one of the biggest, is content to sit on the sidelines for now. Given multiple opporunities by reporters, the group's leaders declined to take a firm position one way or the other.

Donohue admitted that the expansion is “the most complicated issue we’re dealing with here.”

“There are clearly some benefits for low-income employees and employers, if this all works,” said Josten. “But we can’t continue to keep doing what we’ve been doing this way or we risk bankrupting the states.”

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