Texas Governor Rick Perry’s vow to not implement the Affordable Care Act, in particular the Medicaid expansion, makes him at least the sixth state governor to refuse, joining Wisconsin, Florida, Louisiana, Mississippi and South Carolina. Even if it were only limited to these six states, this would make 3.89 million low-income Americans ineligible for Medicaid benefits. In addition, you have Republican governors in blue states like Chris Christie making eyes toward opting out:
Responding to a question, Christie said, “First of all, I was glad that the Supreme Court ruled that extortion is still illegal in America — and that’s a relief because Obamacare on Medicaid to the states was extortion.”
“It essentially said, ‘You expand your program to where we tell you, and if you don’t, we’re taking the rest of your money away.’ Well, that’s extortion,” Christie said [...]
Christie claimed that New Jersey has the second most expensive Medicaid program in the country, and questioned how much more the state’s program could be expanded.
So this is poised to get worse, not better.
The dominant argument on the left still seems to be that the states will “eventually” sign up for the expansion. I’m sure those millions who will go without coverage in the meantime are not looking forward to waiting. And the strategy still appears to be that hospitals will do the heavy lifting here, that the fact that hospitals will lose a lot of their uncompensated care payments from the federal government will make Medicaid expansion a real imperative to them. The fact that Wellpoint just bought a company that privately contracts for Medicaid shows that the insurance industry expects expansion.
I don’t think it’s a great idea for a political party to expect industry to fight its battles. Those loyalties can shift in a hurry. And looking down the nose at red-state governors passing up “free money” is not only smug, it’s actually wrong. Far be it from me to approvingly quote right-wing serial plagiarizer Ben Domenech, but he happens to be correct on this point (if not the exact numbers):
While the federal money is indeed generous for the newly eligible population, it is less so for the rest. For your currently eligible population, you only have the regular Medicaid matching rate, which ranges from 50 to 76 percent. For Texas, it’s around 60 percent. Kaiser calculates that over the first five years of the program, 95.7 percent of the funding will come from the federal government, and not the state. But the state doesn’t agree – they understand that one of every four Texans currently eligible for the program isn’t signed up, and that for this population, they’ll only have a match of around 60 percent. As the report linked above notes, “The Texas Health and Human Services Commission estimated that Texas alone will be forced to spend $27 billion – more than the program’s entire annual budget today.”
In fact, the less generous program you have, the MORE you may have to pay in terms of current eligibles who sign up in the midst of heavy publicity about the expansion. That’s the opposite of what liberal wonks have been claiming, that the federal government is more generous to the less-generous states. This also happens to be true, but it’s a matter of perspective. And the states will look at their own bottom lines.
The bigger question is why liberals are resting on the laurels of such a precariously balanced program, rather than demanding that the program architecture change? Ed Kilgore, who has been writing great stuff on this of late, makes the case:
But there is a more basic point that progressives need to consider beyond the immediate result in this case: is there some general point of progressive principle supporting the maximum degree of coercive power for the federal government in federal-state grant programs? Yes, beyond the Medicaid expansion, there are reasons to fear that this decision will soon spur lawsuits to invalidate “coercive” provisions in environmental laws and other major policies that rely on federal-state partnerships. But are these partnerships themselves inherently progressive?
Recall that the major purpose of the Medicaid expansion itself (as has been the case in a host of previous federal “improvements” to Medicaid) was to reduce the vast disparities in Medicaid coverage in the various states, a major source of the “uninsured” problem to begin with. Is the real offense to progressive values the enhanced ability of states to reject federal limitations on their control of Medicaid policies, or the original structure of Medicaid giving them that control in the first place? Certainly the decision to make a Medicaid expansion a key element in ACA was attributable in part to the desire to build on the most important existing program providing health insurance to those without meaningful access to private insurance (or to Medicare or VA), and in part to reduce, albeit not by that much, the federal costs associated with covering the uninsured. But as some state-level progressives have been arguing for decades, the continued reliance on federal-state programs to address national policy objectives comes at a considerable price of its own: the inevitable interstate inequities, a loss of accountability, and public confusion as to which level of government a central public function “belongs.”
No, there’s nothing progressive about these federal-state partnerships, which is why they ought to be severed, in this case in favor of federalization. That’s the way to ensure certainty on benefits across states, as well as to lower the administrative costs and increase bargaining power. It ought to be a long-term policy goal.