Thursday, August 21, 2014
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Look who's expanding Medicaid now

Seven Republican governors have broken ranks and declared their support for expanding Medicaid in their states under Obamacare. The latest is Florida's Rick Scott, who made his surprise announcement this week.

Look who’s expanding Medicaid now

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Seven Republican governors have broken ranks and declared their support for expanding Medicaid in their states under Obamacare. The latest is Florida’s Rick Scott, who made his surprise announcement this week.

To hear some of them explain their decisions, you might think they had undergone ideological conversions. Rick Scott declared, “I cannot, in good conscience, deny the uninsured access to care.” Gov. John Kasich of Ohio, citing the Bible, called expanding Medicaid a “moral imperative.” New Mexico’s Susana Martinez noted an obligation to provide care “for those most in need in our state.”

But there’s a deeper force at work – money. And the draw is not just money to help the poorest citizens gain access to health care. It is support for the providers that serve those citizens, primarily hospitals. Expanding Medicaid is a financial bonanza for many facilities and a financial lifeline for others.

Expanding Medicaid is a fundamental part of Obamacare. It is as central as the insurance exchanges, the mandate to obtain coverage, or any other provision of the law. It was projected to add 16 million people to coverage rolls – half of the total who will be newly insured.

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It does this by eliminating variations among states in eligibility rules. It directs all states to cover all residents with incomes up to 133% of the federal poverty level. As things now stand, some states set limits for certain categories of the poor as low as 20%, and many of the poorest citizens, including adults without small children, receive no benefits at all.

The carrot to entice states to go along is money – lots of it. The federal government will pick up the entire tab for the added coverage for the first three years and at least 90% after that. That’s millions of dollars each year for states like Pennsylvania and New Jersey to support health care.

As originally designed, the law also included a large stick for federal officials to use against states that declined to go along. They would lose funding for their entire Medicaid programs. With that kind of carrot and stick, it seemed like an offer they couldn’t refuse.

But the Supreme Court decision last summer changed that. The Justices left the carrot in place but ruled that the stick was unconstitutional. That made the offer a good one, but no longer one that states couldn’t necessarily pass up.

Many Republican governors, including Pennsylvania’s Tom Corbett, seized on this newfound opportunity to show their continued displeasure with Obamacare. If enough of them end up going along and declining to expand Medicaid, they could throw a hefty monkey wrench into health reform’s gears.

But money talks, often loud enough to drown out ideology. That’s especially true when a powerful mainstay of a state’s economy is involved. Hospitals are major employers and serve as financial engines for many regions, like Philadelphia. It’s difficult to leave millions of dollars on the table that could support an industry like that. And hospitals have aggressively lobbied to make their case.

Medicaid is about much more than health care for the poor, as important as that is. It is also about supporting a large portion of the entire health care system. Without it, many hospitals in poorer neighborhoods would find it impossible to survive. That’s enough to make most politicians pay attention.

According to the nonprofit Urban Institute, Obamacare’s Medicaid expansion will send almost a trillion dollars to the states over the next 10 years. What fiscally responsible politician would want their state to be left out of that? 

Despite the recent defections, most Republican governors remain opposed to expanding Medicare. (Click here to see where each state stands.) They have made their ideological position clear as they create yet another roadblock to Obamacare. But their states may pay a steep price for their decisions. They will pay it not just in the wellbeing of their poorest citizens but also in the vigor of their health care industries and even of their overall economies.

By Robert I. Field

Robert I. Field, Ph.D., J.D., M.P.H. Professor, School of Law & Drexel School of Public Health
About this blog

The Field Clinic reports and analyzes health care laws, government policies, and political trends that are transforming the care we receive and the way we pay for it. Read more about our panel of bloggers here.

This blog is produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health-policy research and communication organization not affiliated with Kaiser Permanente. Portions of this blog may also be found on Inquirer.com and in the Inquirer's Sunday Health Section.

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Robert I. Field, Ph.D., J.D., M.P.H. Professor, School of Law & Drexel School of Public Health
Jeffrey Brenner, MD Founder of the Camden Coalition of Healthcare Providers, Medical Director of the Urban Health Institute at Cooper University Healthcare
Andy Carter President & CEO, The Hospital & Healthsystem Assoc. of Pa.
Robert B. Doherty Senior Vice President of Governmental Affairs & Public Policy American College of Physicians
David Grande, MD, MPA Assistant Professor of Medicine at the University of Pennsylvania
Tine Hansen-Turton Chief Strategy Officer of Public Health Management Corporation
Drew A. Harris, DPM, MPH Director of Health Policy Program at the Jefferson School of Population Health
Antoinette Kraus Director of the Pennsylvania Health Access Network
Laval Miller-Wilson Executive Director of the Pennsylvania Health Law Project
David B. Nash, MD, MBA Founding Dean of the Jefferson School of Population Health
Mark V. Pauly, Ph.D. Professor of Health Care Management, Business Economics and Public Policy at The Wharton School
Howard J. Peterson, MHA Managing Partner of TRG Healthcare, a national healthcare consulting firm
Donald Schwarz, MD, MPH Deputy Mayor for Health & Opportunity and Health Commissioner for the City of Philadelphia
Paula L. Stillman, MD, MBA Healthcare consultant with special expertise in population health and disease management
Elizabeth A. W. Williams Senior Vice President & Chief Communications Officer for Independence Blue Cross
Krystyna Dereszowska A third-year law student concentrating in health at Drexel
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