On Tuesday, the GOP-led state Senate in Michigan voted narrowly to accept the expansion of the Medicaid entitlement program authorized by ObamaCare. The expansion failed on its first vote, but closed-door negotiations ultimately won the minimum 20 votes necessary for passage. Michigan, whose entire state government is controlled by Republicans, now becomes the 25th state to accept ObamaCare’s Medicaid expansion.
Expanding the number of people covered by Medicaid is a critical tool in ObamaCare’s goal of universal health insurance coverage. Originally, the law required states to expand Medicaid eligibility or forfeit all federal support for the existing Medicaid program. The Supreme Court, however, ruled that the specific Medicaid mandate was unconstitutional and left the decision of accepting the expansion to the states.
To date, 21 states have decided not to accept the Medicaid expansion. 25 states, which includes DC, have accepted expansion. The debate on expanding Medicaid is ongoing in 5 states, 4 of which, Indiana, Ohio, Pennsylvania and Tennessee, have Republican governors.
In terms of participants, Medicaid primarily covers children, adults with disabilities and people with children and very low income. In terms of spending, Medicaid primarily covers nursing home care for the elderly, but that is best saved for another article. Under ObamaCare, states would expand eligibility to individual adults without children if they earn less than 138% of the federal poverty threshold. So, anyone earning less than roughly $15,000 a year would be covered by Medicaid.
As an incentive to adopt the expansion, the federal government will pick up all costs of expansion for the first three years. After 2017, the government would provide 90% of the funding to cover the expansion. The ObamaCare law doesn’t specify what portion of the new costs the federal government will share after 2020, however.
This has raised concerns among many Governors that the states will be responsible for bearing the new costs in the future. The expansion is projected to cost several billion dollars a year and could potentially be a burden on the states’ already stretched Medicaid budgets. If the feds reverted to their traditional Medicaid reimbursement rates, which is most likely, the states would be faced with billions of dollars in new obligations.
That, however, is in the future. The lure of immediate federal dollars is very tempting, even among Republicans. “The taxes in the Affordable Care Act are billions of dollars,” Michigan GOP Sen. Roger Kahn said, explaining his vote. “And for us in Michigan, it will be $2 billion siphoned from our people, and we’re going to bring that back to the state.”
Arizona GOP Gov. Jan Brewer, who joined a lawsuit to overturn ObamaCare, used every tool available to her to force the GOP Legislature to adopt the Medicaid expansion. She held campaign-style rallies in support of the entitlement. The hospital lobby spent millions supporting her efforts. Brewer even vetoed every piece of legislation passed by the legislature until it approved the expansion.
GOP Governors John Kasich (OH) and Rick Scott (FL) have also endorsed the Medicaid expansion, although they haven’t gone anywhere near the lengths that Brewer did in Arizona. Florida is not participating in the expansion, while the matter is still under debate in Ohio.
Brewer’s action are understandable, parochially. Her state will be showered with billions in new federal aid over the next several years as a result of the Medicaid expansion. Controlling our fiscal crisis, however, requires us to set parochial concerns aside. Arizona’s citizens ultimately are still liable for the spending, whether the check is cut by the federal or state government.
So to are the citizens in the 21 states whose elected officials have wisely opted out of the costly expansion. These states are experimenting with more cost-effective ways to extend coverage to the very poor. These programs could deliver better care, at lower cost, than the existing Medicaid program. Yet, their citizens will still be liable for the open-ended entitlement approach adopted by Brewer, Michigan’s Rick Snyder and other governors.
As they say, no good deed goes unpunished.