State lawmakers gird for battle over Medicaid expansion

“We’re in a fiscal straitjacket,” concedes Rep. Claire Levy (D), the House’s point person on budget matters.

The Supreme Court teed up these conflicts last June, when it ruled that states can’t be penalized for opting out of the Medicaid expansion.

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This effectively threw the decision to each state’s general assembly: Because Medicaid is partly funded by states, one way or another lawmakers will be forced to address the issue when crafting their budgets for 2014.

Arkansas Gov. Mike Beebe (D) has pushed hard for his state to participate in the expansion. But he always faced a tough sell in his state, one of three where a super-majority is required to pass budget bills. And the hurdle has only gotten higher since last month’s elections, when Republicans won control of Arkansas’s General Assembly for the first time since Reconstruction.

Even if the federal match rate for Medicaid is left untouched during the current fiscal cliff talks, Lamoureux, the incoming Arkansas Senate president, said he worried his state will be unable to afford its share of the cost of expansion.

The nonpartisan Kaiser Family Foundation estimates the additional charge to Arkansas will be almost $1 billion from 2013 through 2022. And, although Arkansas’s Medicaid director, Andrew Allison, suggests the administrative costs of expansion will be modest, and it could actually save the state money on uncompensated care for the uninsured, Lamoureux wants more detailed numbers.

“We don’t even have an agreed upon set of facts that we can fight over yet,” he said.

Like many state lawmakers, Lamoureux also argues that his state’s governor could negotiate with Obama officials for permission to do only a partial expansion of Medicaid — getting the full federal match to insure people with incomes only up to 100 percent of poverty, for instance, with the remainder getting coverage through the law’s federal subsidies to buy private plans.

However, health-care experts question whether Obama officials have the legal authority to authorize partial expansions — let alone whether they would agree to them.

“There is almost no reason whatsoever for the administration to want to do this,” said Matt Salo, executive director of the National Association of Medicaid Directors.

“And I think the only thing that would change that calculus is if you have a significant number of states that are really dead serious that if you give them the choice between full expansion or nothing, they will choose nothing.”

That may explain why the administration has yet to declare whether partial expansion is, or is not, an option, Salo added.

Yet paradoxically, by keeping the idea on the table, Obama officials may only be prolonging the debate — particularly since there is no formal deadline by which states must opt in to the Medicaid expansion, and states would probably need only weeks rather than months to prepare.

“Right now you have the states and the federal government kind of circling each other warily,” Salo said. “No one is quite ready to tip their hand.”

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