Republican Governors Finding Fiscal Sense in Medicaid Expansion

Thursday, 07 Feb 2013 07:19 AM

 

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Six Republican governors have agreed to expand Medicaid, the second-largest piece of President Barack Obama’s U.S. health-care overhaul, accepting federal money to ensure their state’s residents have access to medical coverage.

Michigan Governor Rick Snyder, an Affordable Care Act opponent, said yesterday it makes sense for the “physical and fiscal health” of his state to participate in the law’s expansion of Medicaid, the state-federal health plan for the poor. He became the sixth Republican governor to jump on board, following John Kasich of Ohio’s announcement three days ago.

Snyder, Kasich and the rest of nation’s 30 Republican governors generally oppose the $1.2 trillion health law as too costly. Five Republican governors have agreed to participate in the core provision of the law, building new marketplaces called exchanges to sell health insurance.

Obamacare: Massive New Rules Revealed for 2013

Kasich said while he remains opposed to the individual mandate and other provisions of the law, the Medicaid expansion is different.

“This is not an endorsement of Obamacare,” he said. “I think it’s something to be considered separately from some people’s strong feelings -- including mine -- about Obamacare.”

Kasich’s willingness to participate may help “break the logjam” among Republican governors opposing the Medicaid expansion, Ron Pollack, executive director of Families USA, said in a statement. Families USA is a Washington-based consumer advocacy group that supports the health-care overhaul.

Hospital Burden

Obama’s health law, which passed Congress in 2010 without a single Republican vote, may extend insurance over the next decade to about 27 million people who are currently uninsured. The Congressional Budget Office estimates that 8 million more people will enroll in Medicaid programs next year because of the expansion, which raises the income eligibility limits.

Hospitals also have been pushing governors nationwide to participate in the expansion as they look to erase bad debt piled up from treating uninsured patients. In Michigan, Snyder said an expanded Medicaid program will cover 46 percent of the state’s 450,000 uninsured adults and supplant the use of costly emergency rooms for primary care.

“Expansion will create more access to primary care providers, reduce the burden on hospitals and small businesses, and save precious tax dollars,” Snyder, the Michigan governor, said in a statement.

Republican governors in Arizona, Nevada, North Dakota and New Mexico have also agreed to participate in the Medicaid expansion, according to a tally by Advisory Board Co., a research and consulting company based in Washington. Including Democratic governors, 21 states will expand the number of people eligible for the health program.

$638 Billion

The Medicaid expansion is particularly alluring because of the federal money behind it. Until 2017, the U.S. government will pay the entire cost of covering people made newly eligible for the program. Thereafter, states don’t have to pay more than 10 percent of the cost. The Congressional Budget Office estimates the expansion will cost the federal government about $638 billion through 2023, and states about $63 billion.

While ruling the health law constitutional in June, the Supreme Court said states could choose not to participate in the Medicaid expansion.

Obamacare: Massive New Rules Revealed for 2013

Pennsylvania’s Tom Corbett, a Republican, said this week he wouldn’t participate.

In states that accept it, the Medicaid expansion will make the program available starting next year to any American earning as much as a third more than the federal poverty level, or about $31,800 for a family of four. Eligibility for Medicaid varies by state now, and the program is generally closed to adults who don’t have children.


© Copyright 2014 Bloomberg News. All rights reserved.

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