State Legislatures Focus on Medicaid Expansion

In state legislatures around the country, proponents and opponents of Medicaid expansion are fighting similar battles. On March 8, 2013, South Dakota’s Joint Appropriations Committee tabled a bill to expand Medicaid. But an aide to Republican Governor Dennis Daugaard said that he is setting up a committee to study the expansion. The governor and others are concerned that the federal government won’t follow through on its promise to pay 100 percent of the cost for the first three years. He would prefer to cap the income limit for childless adults at 100 percent of the federal poverty level (FPL) rather than the 138 percent called for in the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act (P.L. 111-152).

Montana’s Democratic Governor Steve Bullock is trying to persuade the Republication-dominated legislature to pass Medicaid expansion.  He says it will bring health care jobs to Montana because the 70,000 newly insured residents will be seeking care.  He wants  the state to borrow to build schools to train people for those jobs. But opponents aren’t buying it. They argue that the state doesn’t need to borrow any more money or to maintain any more buildings. Bullock also argues that if Montana doesn’t expand its Medicaid program, the state’s federal tax dollars will be spent in other states. Whether or not they accept that argument, the Republicans are finding it harder to resist the pressure of the lobbyists hired by hospital and medical groups who contend that they will lose more on uncompensated care  without the expansion because of the redirection of  other hospital payments to Medicaid. And cuts to disproportionate share hospital payments, for example, will apply nationwide, not just in states that expand Medicaid.

Similar arguments were made in North Carolina. But on March 7, 2013, Governor Pat McCrory signed legislation affirmatively rejecting both the Medicaid expansion and health insurance exchanges.

In Florida, Republican Governor Rick Scott came out in favor of expansion, but he has not made it a priority in his communications with the legislature. According to the Tampa Bay Business Journal, Scott is focused on a $2,500 pay raise for teachers and elimination of a sales tax that manufacturers pay on the purchase of new equipment. After strenuously arguing that the expansion would cost Florida $26 billion, just in the past week, Scott accepted the estimates of the state’s economists that the state would likely spend about $5.2 billion and gain $51 billion in federal funds. Now he is trusting the legislature to “do the right thing.”

Legislators in New Hampshire and Pennsylvania held hearings the week of March 8, 2013. In both states, proponents of Medicaid expansion pointed out that many health care workers, such as home health aides, provide crucial care for others but have no coverage themselves. One advocate from Erie, who operates an agency that serves people with disabilities, told a legislative appropriations committee that the agency could no longer afford to provide coverage for its direct care workers, who earn about $10.00 per hour, after premiums rose 59 percent. Staff from the New Hampshire Fiscal Policy Institute conducted a study commissioned by the state; they told the legislators that the Medicaid expansion would either be budget-neutral or save the state money, while reducing the number of uninsured residents from 170,000 to 71,000.

Meanwhile, Kaiser Health News reports that Medicaid managed care plans still expect to make a profit in their  growing market. Some plans are trying creative methods to keep hospitalization costs down and quality measures up.  A Philadelphia plan has begun making incentive payments to doctors  and hospitals who meet quality tests. Molina Health Plan is building and staffing clinics in areas where members have used the emergency room frequently. Centene’s CentAccount program rewards clients for seeking preventive care by setting aside money in an account that beneficiaries access with a debit card. The funds can be used for health-related items or for other expenses, including diapers, transportation, and utility bills. It will be interesting to see how well these incentives work.