Medicaid expansion threatened by GOP victories in states

Republicans' big election gains Tuesday in governorships and legislatures around the country diminish but do not eliminate prospects that more states will expand Medicaid to low-income adults as allowed by the healthcare reform law, political analysts say.

Republicans now hold at least 31 governorships and full party control of state government in at least 23 states. A number of GOP governors who staunchly opposed Medicaid expansion, including those in Georgia, Kansas, Maine and Wisconsin, survived tough races; political observers say there is little chance expansion will go forward in their states in the near future. For instance, Gov. Scott Walker of Wisconsin, who has rejected federal funds to expand Medicaid, easily won re-election over a Democratic challenger who attacked him for not accepting the federal expansion funding. And Republicans strengthened their control of the Florida Legislature, making the already-long odds of expansion there even longer.

On top of that, Republicans who have expressed skepticism about Medicaid expansion won elections in Arizona and Arkansas to succeed governors who pushed through expansion. That raises the possibility of rollbacks in red states that already have implemented Medicaid expansion.

Prior to the election, Republican governors in Indiana, North Carolina, Tennessee, Utah and Wyo-ming, none of which had gubernatorial elections last week, had signaled cautious interest in expanding their state's Medicaid program to adults earning up to 138% of the federal poverty level. They indicated they wanted to explore conservative models typically featuring reliance on private health plans and requiring beneficiary premium contributions.

But expansion may be in doubt even in those states, given Republicans' broad ideological opposition to Obamacare and their new control of Congress. “It seems unlikely to me you would see additional movement toward expansion of Medicaid or any further implementation of the Affordable Care Act,” said Lee Weingart, a Republican political analyst.

So far, 27 states and the District of Columbia have expanded their programs, extending coverage to an estimated 8.7 million Americans over the past year. But there are an estimated 5 million more people living in the 23 non-expansion states who meet the ACA income threshold for coverage and remain uninsured.

“I don't think the wind is in the sails the way it was,” said John Graham, a senior fellow with the conservative National Center for Policy Analysis in Dallas. Supporters of expansion argued, however, that GOP governors who previously expressed interest in expansion will continue to pursue their plans. “Hospitals within their states are suffering financially without Medicaid expansion and state economies are losing out because of the absence of federal Medicaid dollars,” said Stan Dorn, a senior fellow at the Urban Institute's Health Policy Center.

In Arkansas, which pioneered the conservative-friendly “private option” model several other GOP-led states have emulated, newly elected Gov. Asa Hutchinson has vowed to put new limits on the program, which has extended coverage to more than 200,000 residents. In addition, Republicans won supermajorities in both legislative chambers, which will make it hard to renew the program next year.

In Arizona, where outgoing Gov. Jan Brewer became one of the first Republican governors to push through Medicaid expansion, her GOP successor, Doug Ducey, has expressed doubts about the program. But he also said he would seek its repeal only if the federal government doesn't live up to its promise to pay for 90% of the program after 2016.

In Ohio, re-elected Republican Gov. John Kasich, who expanded Medicaid by sidestepping the Republican-controlled Legislature, will have to win reauthorization of the expansion in 2015 in a Legislature that is now even more strongly Republican.

HHS Secretary Sylvia Mathews Burwell seemed to recognize the Obama administration will face a more hostile landscape across the country in 2015. She told the National Association of Medicaid Directors last week that “your state can choose to expand at any time. You also reserve the right to change your mind.”

Now though, the Obama administration is likely to come under greater pressure from Republican governors to make concessions that allow states to require beneficiaries below the poverty level to pay premiums, tie enrollment to employment activities and pare back benefits. Some experts warn that such features reduce enrollment.

“You have an HHS secretary who's very practical and who has an interest in working with states,” said Dan Mendelson, CEO of consulting firm Avalere Health. “As long as there are states that need to expand, I think she's going to look for ways to find a compromise.”

Follow Virgil Dickson on Twitter: @MHVDickson