Ohio Republican Gov. John Kasich's recent successful maneuver to bypass the GOP-controlled state Legislature and approve a Medicaid
expansion for low-income Ohio
adults has raised the question of whether most or all GOP-led states eventually will drop their opposition and approve the healthcare reform law's expansion of coverage to low-income Americans.
The lure of tens of billions in federal funding over the next 10 years to the states that expand coverage to all adults earning up to 138% of the federal poverty level has already proven compelling for Republican governors like Kasich who are some of the staunchest opponents of the Patient Protection and Affordable Care Act. They also are facing intense pressure from powerful hospital leaders in their states, who are eager to see a payment source for their legions of uninsured patients.
Judith Solomon, vice president for health policy at the liberal Center on Budget and Policy Priorities, said it's just a matter of time before all states join the 25 states and the District of Columbia in approving the expansion. She said the bigger question is how long it will take.
After the Medicaid program was created by Congress in 1965, it took 17 years for the last state, Arizona, to start participating in the program, she said. “I think that there are a couple of states where it may take a change in leadership where the governors have been so strongly opposed that it's hard to see how they change course,” she said.
Some Republican governors have staked out such a strong position on the issue that they don't think they can reverse course. Still, Gov. Tom Corbett of Pennsylvania previously had taken a vehement position against Medicaid expansion but recently proposed an alternative plan for using federal Medicaid money to cover low-income adults up to 138% of poverty.
Currently 25 states plus the District of Columbia have opted to expand their Medicaid programs. In contrast, Republican leaders in states including Texas, South Carolina, Louisiana and Mississippi have remained firm in their opposition. But other states including Pennsylvania, Utah and New Hampshire could decide to expand over the next year or two, according to Solomon. The U.S. Supreme Court last year made Medicaid expansion optional for the states.
“We're probably going to see the map change a little bit by the end of next year,” she said. “Then I think it's just a matter of time.” Solomon said a main reason that she thinks all states will opt in has to do with the funding that comes with expansion, with the federal government paying 100% of the cost for the expansion population for the first three years and 90% after that.
She cited a recent report from the Kaiser Family Foundation
that projected Medicaid enrollment to grow at an average of nearly 9% across all states in fiscal 2014, with spending growth on the program expected to average 10% since it is expected more people who are currently eligible for Medicaid in states not expanding will likely enroll.
The study projected that the rate of spending growth in states expanding their programs will be lower then in states not expanding Medicaid, due to the additional federal funding.
“I think the state budget directors sort of get this that you're going to be spending money as Medicaid enrollment increases in every state,” Solomon said. “By expanding, you actually see some offsets.”
Ohio is expected to receive about $13 billion in federal Medicaid expansion funds over the next seven years. But on Oct. 18, Kasich, a strong conservative, argued that case for Medicaid expansion on moral grounds. “Why is it that some people don't get it?” he said in remarks that surprised the national Republican political establishment. “Is it they're hard-hearted or cold-hearted? It's probably because they don't understand the problem because they have never walked in somebody's shoes.”
Another key reason some state Republican leaders like Corbett and Michigan Gov. Rick Snyder have changed their minds in favor of Medicaid expansion has been the flexibility the federal government has shown in allowing states to come up with alternative plans, said Alan Weil, executive director for the National Academy for State Health Policy.
Weil said Arkansas' alternative plan, which uses federal funding slated for Medicaid to let low-income residents up to 138% of poverty buy private coverage through the state insurance exchange, has been key model since receiving federal approval last month. “The general ability to tailor the approach to what the state wants is a very important factor,” Weil said.
Both Iowa and Michigan have passed expansion bills that will require federal Section 1115 waiver approval before they could be implemented. In Pennsylvania, Corbett has proposed an expansion plan similar to Arkansas where newly eligible people would be directed to the state's health insurance exchange to get coverage. Weil said as many as 10 Republican-controlled states could opt into expansion over the next several years.
Solomon said the pressure of seeing neighboring states reap the benefits of federal funding might compel some states, such as Pennsylvania, Utah, Virginia, Tennessee and others to move toward expansion at some point. But the idea of expansion might be a harder sell within parts of the country, such as in the South, where a bloc of states, including Louisiana, Mississippi, Georgia, Alabama and Texas, remained adamantly opposed to expanding the program on conservative ideological grounds.
“Part of why I think we'll see the number grow over time is because states will look at neighboring states and see the consequences that are favorable to the people who gain insurance and favorable to their health sector that has new revenue,” Weil said. “They will say, I want that too.”
North Carolina's Republican Gov. Pat McCrory put any notion of reconsidering an expansion of Medicaid in the near future to rest Monday when he said the idea of calling the state legislature back for a special session on the issue was “out of the question.” McCrory has been critical
of the healthcare reform law, and has blocked efforts by legislative Democrats to expand Medicaid to an estimated 320,000 low-income residents.
Citing new federal regulations, McCrory recently said
that North Carolina could be forced to expand Medicaid to more low-income people, despite the legislature's vote earlier this year to reject that option.
He said in a speech at the conservative Heritage Foundation that the decision whether to expand Medicaid is “one of the most difficult issues on the governors' plates right now.” He pointed to a new federal regulation as potentially forcing states to expand the program. That rule allows hospitals to presume that some uninsured patients qualify for Medicaid, then bill the state Medicaid program for up to two months.Follow Steven Ross Johnson on Twitter: @MHSjohnson