Obamacare hits a tipping point: Most governors now want to expand Medicaid

September 16, 2013

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Pennsylvania Gov. Tom Corbett (AP)

The Medicaid expansion appears to be, well, expanding, and it's happening with the support of Republican governors.

Pennsylvania Gov. Tom Corbett is expected to announce on Monday afternoon his support for expanding Medicaid in his state to 500,000 currently uninsured Pennsylvanians. Earlier Monday, Michigan Gov. Rick Snyder signed legislation that will expand the Medicaid program in his state, as well.

Between Pennsylvania and Michigan, you're looking at more than 800,000 people becoming eligible for new health law programs. And if the Pennsylvania expansion does go through, it would be the 26th state to expand Medicaid, meaning that the majority of states had decided to opt into a massive health law provision that the Supreme Court decision last year accepted.

Pennsylvania is not a done deal: The Philadelphia Inquirer reports that Corbett wants to include provisions that would require Medicaid recipients to be actively searching for work, and it will ultimately be up to the federal government to decide whether to approve such a provision.

Still, the wave of action just weeks before open enrollment launches suggests that some Republican governors are more open to the health law program. And it seems to come down to two key factors: the massive amount of federal funds at play, and Republicans' sense of the leverage they have in this situation.

First, the money: In Michigan, Snyder has referred to federal funding often in making his case for a Michigan Medicaid expansion. ""The Healthy Michigan plan is vital to the health of our families and the economic success of our state," he said in one statement in late June, when he was pushing the state legislature to sign off on the proposal.

Michigan is expected to get an additional $25 billion in federal funding over the next decade through the Medicaid expansion, while spending an additional $4 billion of state funds to cover over 300,000 people. The reason the funding tilts so heavily in the direction of the federal government has to do with the law: It has the feds pay for 100 percent of the cost of the newly expanded Medicaid population for three years. After 2017, the match begins to fall, over the course of a few years, to 90 percent.

That's not the entire cost, but it's certainly a better deal than the traditional Medicaid funding arrangement, where the federal government covers about half the costs.

The second factor driving these decisions has to do with Medicaid waivers -- when governors want permission from the federal government to try something new with the program. Republican governors have increasingly come to see their decision on Medicaid expansion as allowing them leverage to request big changes to the program.

We saw this in Florida, where Gov. Rick Scott's decision to support the Medicaid expansion came alongside the federal government granting a waiver allowing for greater use of private health insurance plans in the public program. The Florida legislature did not ultimately move forward with the policy.

Pennsylvania's Corbett also looks like he wants to pursue significant changes to the state Medicaid program. "Corbett's 'Healthy PA' plan will contain additional provisions such as co-pays and work-search requirements for both new and existing Medicaid recipients," the Philadelphia Inquirer reports. "Their co-pays would be based on income that would be capped at $25 a month."

To have two Republican governors moving forward with the health law program on the same day suggests that some of these incentives are enticing more governors as the insurance expansion nears.

KLIFF NOTES: Top health policy reads from around the Web. 

States balk at ending Medicaid contracts. "In Florida, a national managed care company’s former top executives were convicted in a scheme to rip off Medicaid. In Illinois, a state official concluded two Medicaid plans were providing “abysmal” care. In Ohio, a nonprofit paid millions to settle civil fraud allegations that it failed to screen special needs children and faked data. Despite these problems, state health agencies in these - and other states - continued to contract with the plans to provide services to patients on Medicaid, the federal-state program for the poor and disabled." Jenni Bergal in The Washington Post

Are wellness programs ready for primetime? "Whether wellness programs work as intended or not, let’s recognize what they also do: They increase the cost of coverage for some employees. That saves employers money but by shifting costs to workers. Those who bear the brunt of this increase are the less healthy employees, who also tend to be those of lower socioeconomic status." Austin Frakt and Aaron Carroll for Bloomberg

 

 

 

 

 

 

 

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