Why GOP Governors Call Medicaid Expansion Medicaid "Reform"

by | February 18, 2015

By Tony Pugh

When Indiana Gov. Mike Pence agreed to expand eligibility for his state's Medicaid program, he made sure to call it "reform" rather than "expansion."

The change reflects both the unique, conservative features of Indiana's Medicaid plan as well as a complex political dynamic for Pence, a conservative Republican with rumored presidential aspirations.

By embracing a key pillar of the Affordable Care Act, Pence's Medicaid plan could tarnish his conservative bona fides with large swaths of GOP voters and opinion makers.

So with party leaders in Washington calling for the repeal and replacement of Obamacare, Medicaid "reform" sounds and looks a lot better to GOP hardliners than the dreaded E-word.

"This has been a long process, but real reform takes work," Pence said when the deal was done.

His careful wording is part of an awkward political dance that's being performed nationwide as more Republican governors push for Medicaid expansion, despite tepid support from GOP state lawmakers and a continuing assault on the health care law by Republicans in Congress.

The governors' efforts have muddied what had been one of their party's clearest and strongest political messages _ their universal disdain for the health care law.

"It's always a mixed message when one group is doing something and the other's not. There's a political element behind all of this," said Sen. Richard Shelby, R-Ala.

But Republican strategist Keith Appell said the conflicting interests on the state and national levels haven't created intra-party political tension.

"I haven't seen anything that demonstrates that at all," Appell said. The health care law allows states to cover non-elderly adults earning up to 138 percent of the federal poverty level through Medicaid, the state-federal health plan for low-income Americans.

The federal government will pay all medical costs for the newly eligible enrollees through 2016 and no less than 90 percent of their costs thereafter. To date, 28 states have implemented the Medicaid expansion. This includes 10 with Republican governors whose initial opposition gave way to pressure from voters, hospitals and patient advocates to grab the federal Medicaid dollars and the new jobs that come with it.

In his recent state-of-the-state speech, Republican North Carolina Gov. Pat McCrory called on state lawmakers to join the expansion movement.

"Last session, we came close to passing Medicaid reform, but progress stalled on the one-yard line," McCrory said. "Let's run it up the middle and win a victory for families across North Carolina."

By crafting an expansion that embodies conservative principles, Indiana's Medicaid plan could become the template for other Republican governors wrestling with the politics of expansion.

It requires most Indiana Medicaid recipients to pay a small monthly premium for coverage that includes dental and vision benefits.

Those who earn below the poverty level won't have to pay premiums. But if they don't, they get no vision or dental benefits and must make co-payments toward their care.

Higher-earning enrollees who don't pay their monthly premiums would lose their coverage in Indiana and couldn't re-enroll for six months.

While the Obama administration rejected Indiana's proposed work requirement for Medicaid enrollees, "they were willing to explore some of these more experimental provisions, to see what works and to compromise with these governors that want these folks to have more skin in the game," said Caroline Pearson, vice president with Avalere Health, a Washington consulting firm.

Any North Carolina expansion plan would likewise "require personal and financial responsibility from those who would be covered," McCrory said.

Appell said Indiana's plan is "perhaps the best approach you can take as a conservative."

"It's a gutsy call on his part," Appell said of Pence, "because he also gets some flack."