Opposition to Medicaid Expansion Weakens, Some States Still Hostile to PPACA

Lately, some states that made opposition to the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148 and P.L. 111-152) a priority have reconsidered. For example, members of Virginia’s Senate Finance Committee decided to cooperate on expansion after a detailed presentation by Dr. Bill Hazel, the trusted Secretary of Health appointed by Republican governor Bob McDonnell. Ohio’s Republican governor, John Kasich, announced on February 4, 2013 that he would push for expansion. Although he continues to oppose the individual mandate, Governor Kasich decided that expansion “makes great sense for Ohio.” The Washington Post reports that Michigan Governor Rick Snyder, Arizona Governor Jan Brewer, and the Republican governors of Nevada, New Mexico and North Dakota also have decided to expand.

And on February 20, 2013, Florida governor Rick Scott (R) announced that Florida will accept the Medicaid expansion. CMS has granted the state’s long-pending managed care waiver. He was a leader of the opposition to PPACA, and immediately after the Supreme Court decision in June, 2012, he vowed not to implement any part of the law about which he had a choice. But  strong public opinion favored Medicaid expansion.

What changed their minds? They may be starting to see economic advantages to the expansion. In a recent study, the Colorado Health Foundation found that expanding Medicaid would boost the state’s economy. By 2025, the study predicted,when compared with no expansion, full Medicaid expansion would bring:

  • nearly $4.4 billion in economic activity;
  • 22,388 new jobs;
  • increased annual income of about $600 per household;
  • increased tax revenue of $128 million; and
  • cumulative reductions in General Fund appropriations for Medicaid of $133.8 million.

On February 13, 2013, he New Jersey Policy Perspective released a similar report projecting the benefits of Medicaid expansion in that state. Governor Chris Christie has not yet announced his position.

The governors cited additional reasons for Medicaid expansion. Increased federal money will flow back to the states that expand Medicaid but not to the states that don’t. Ohio’s Governor Kasich estimated that the state would subsidize care for nonresidents to the tune of $2.2 billion over two years without any benefit to Ohio. And Governor Snyder of Michigan estimated that with Medicaid expansion, the state would save $1.2 billion through 2020.

PPACA cuts Medicare and Medicaid payments to disproportionate share hospitals (DSH), those that serve as safety nets by providing uncompensated care to the poor and uninsured. The cuts were part of the package that included Medicaid expansion. But states that forgo Medicaid expansion will lose the DSH payments, shifting the costs of serving the poor and uninsured to the very hospitals that provide the service. As a result, hospitals and other providers across the country have lobbied for the Medicaid expansion.

Wisconsin Governor Scott Walker has proposed to cut Medicaid eligibility and shift beneficiaries with incomes over 100 percent of the federal poverty level (FPL) to private insurance, while removing  the cap on the enrollment of childless adults below poverty. He contends that there would be a net decrease in Medicaid enrollment, and a decrease of 224,000 in the number of uninsured. In addition to Democrats, a Republican insurance expert says the numbers don’t add up, but it is highly unlikely that the legislature would pass Medicaid expansion. Indiana Governor Mike Pence continues to oppose Medicaid expansion, saying the program is “broken.” He has asked CMS to extend the state’s Healthy Indiana Program waiver for another three years.

Kansas and Missouri have seen interesting developments. Missouri’s Democratic governor, Jay Nixon, strongly supported the expansion, but the legislature would not go along. Meanwhile, Sam Brownback, the Republican governor of Kansas, who vehemently opposed PPACA, has not yet decided on expansion. Some Missouri legislators believe that if Brownback accepts Medicaid expansion, the opponents in Missouri would lose ground.

Texas Governor Rick Perry is still holding out.  Governor Bobby Jindal (R-La.) maintains his opposition; his popularity is slipping.