The four most important states to watch on Obamacare’s Medicaid expansion

January 29

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With state legislatures kicking off their 2014 sessions, the Medicaid expansion is back in play. Twenty-six states had signed onto the Medicaid expansion at the start of this year -- and that leaves nearly half the country deciding whether to make a go of it in the future. In some states, there's little discussion of the Medicaid expansion. There are states that rejected it in 2013 and will probably reject it in 2014. But in a handful of states, there's a debate slowly starting about the best way to move forward in this area. Here are a few states that Wonkblog will be keeping an eye on in coming months.

1. Arkansas - Arkansas was the first state to propose using federal Medicaid dollars to buy private health insurance for its low-income residents. Now it could well achieve another first: Arkansas could become the first state to quit the Medicaid expansion. The Medicaid expansion just barely inched through the Arkansas Senate last time around, where it needs three-quarters of lawmakers' support. Now, Arkansas Times's David Ramsey (are you following him on Twitter? You should be!) reports that the votes might not be there in 2014:

Just as the private option is getting off the ground, its future appears to be in serious jeopardy in the fiscal session of the General Assembly, which begins Feb. 10. In order to continue the policy past the end of the fiscal year this summer, three-fourths of both houses of the legislature must once again approve the appropriation to accept the federal money that funds it. The rump group of Republicans who opposed the policy are gearing up for another fight, and the path to another supermajority is uncertain at best. Rep. Nate Bell (R-Mena), who opposes the private option, said that there was "no question" that as of now, there are enough votes to block the funding. "I think anybody in the Capitol building would agree with that," he said.

When you talk to health wonks, you don't hear a lot of speculation about states signing up for the Medicaid expansion and later backing out. Generally, the expectation is it would be really hard for states to back away from health benefits once they start providing them to residents. But Arkansas has already had a penchant for trying new things in this space -- and it's possible they could, once again, set precedent with this type of move.

2. Virginia - One of newly-elected Virginia Gov. Terry McAuliffe's (D) priorities for 2014 has been convincing the state to expand the Medicaid program. In order to get there, he's going to have to get the Republican-controlled Virginia House of Delegates on board -- and right now, they appear to be an incredibly tough sell. Senior members of the Virginia House Republicans declared Monday "that eligibility for Medi­caid will not be expanded this year," my colleague Michael Laris reports.

If there's any glimmer of hope, it's probably a new report released Tuesday by McAuliffe's Health and Human Resources agency estimating that expanding Medicaid would save the state $1 billion over nine years.

3. Utah - Gov. Gary Herbert, a Republican, has promised that he wants to do something on Medicaid expansion. "Doing nothing ... I’ve taken off the table. Doing nothing is not an option," he said Friday during his weekly news conference. How much he can actually do is, much like McAuliffe, limited by his legislature's willingness to go along. Utah House Speaker Becky Lockhart said Tuesday that she would only move forward with an expansion that wasn't funded by federal dollars. Given that the Medicaid expansion is, through 2017, meant to be entirely funded by federal dollars...it's fair to describe this as a very major sticking point.

4. Pennsylvania - Republican Gov. Tom Corbett has already taken steps toward an Arkansas-style Medicaid expansion -- although his proposal, goes a bit further in changing the public program. Corbett's Medicaid proposal would require some Medicaid beneficiaries to work 20 hours per week or be actively looking for work. The Pennsylvania proposal is still in a public comment period before it gets sent to the federal government.

What will be interesting to watch here is how much flexibility the Obama administration gives Pennsylvania in reshaping its Medicaid program, particularly in the work requirements. Generally, the White House really wants states to expand their Medicaid programs and has granted new flexibilities in recent negotiations. The Centers for Medicare and Medicaid Services allowed Iowa, for example, to tweak some of the benefits that its Medicaid plan offers. Those gaining coverage through the expansion won't have coverage for non-emergency transportation to the doctor, as those in the traditional Medicaid program do get in their benefit package.

How much flexibility the Obama administration grants to Pennsylvania could be influential to the other states, still sitting on the sidelines, waiting to decide whether to expand their own Medicaid programs in the future.

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

Obama embraces Obamacare. "President Barack Obama left no doubt Tuesday night what his Obamacare sales technique will be: loud voice, lots of confidence and no apologies. Don’t dwell on the scratches on the hood. Just tell the customer how good it will feel to rev the engine and drive the car off the lot. Obamacare didn’t show up in the State of the Union address until over halfway through, and it encompassed all of nine paragraphs in an hour-plus stemwinder. But this was very much a hard sell by the president for Americans to sign up for his signature health care law, the biggest sales pitch Obama has made in a State of the Union address since the law passed." David Nather in Politico

Must-see Sebelius GIF. Seriously, it's just great.

Inside a Microsoft exec's efforts to reboot HealthCare.gov. "Among the tasks high on DelBene's list: upping the capacity of the website, improving security, and fixing the back end of a system that still has trouble sealing enrollees’ deals with insurers. His job is about triage, curing the sickest parts first. And like any good triage doc, he’s meticulous, purposeful, and pragmatic -- plus he likes to move fast. The job may only last six months." Daniela Hernandez in Kaiser Health News.

Hidden financial ties rattle top health quality group. "Earlier this month, the U.S. Justice Department settled a $40 million whistleblower lawsuit with CareFusion, the maker of ChloraPrep. The case claimed the money paid to Denham's business was a kickback to get him to manipulate the National Quality Forum's standards and boost sales of the drug." Marshall Allen for ProPublica.

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