Medicaid Math Trumps Ideology for GOP Governors

Medicaid Math Trumps Ideology for GOP Governors

By Lou Cannon - January 25, 2013

Call it the revolt of the West or, alternatively, the triumph of economics over ideology.

Breaking ranks with Republican colleagues, four conservative GOP governors who preside in capitals west of the Mississippi River have decided to accept federal funds to expand Medicaid, the state-federal health care program for low-income families and the disabled.

The governors of Arizona, Nevada, New Mexico and North Dakota are on record as opposing the Affordable Care Act, the 2010 federal health bill that was the principal legislative achievement of President Obama’s first term. But as state and local costs for helping the medically uninsured rise, these governors want a share of the available federal cash.

“With this move, we will secure a federal revenue stream to cover the costs of the uninsured who already show up in our doctor’s offices and emergency rooms,” Arizona’s Jan Brewer said in explaining why she decided to accept federal funds for expanding Medicaid.

Key members of the Republican-controlled Arizona State Legislature remain to be convinced, but the governor’s spokesman said he believes that mathematics will persuade them. Arizona would receive $1.6 billion in matching funds in 2014, the first year of the expansion.

The other GOP governors who favor expanding Medicaid are Brian Sandoval of Nevada, Susana Martinez of New Mexico and Jack Dalrymple of North Dakota. All these states have rural populations in which hospitals and clinics are especially hard-pressed.

Sandoval, a practical conservative in an economically devastated state, was the first to opt for the expansion, doing so in December when all other GOP governors hewed to the party line of opposition. Sandoval is also one of the few Republican chief executives who have agreed to implement the federal law’s best known feature: creation of online marketplaces known as exchanges for individuals and families to purchase affordable health insurance.

Right-wing commentators have sniped at these governors, directing their harshest criticism at Brewer, who became a conservative hero for defending a state law that required local police officers to question criminal suspects about their immigration status.

The Supreme Court upheld the constitutionality of that portion of the statute while striking down other sections on the grounds that immigration is a federal responsibility. Brewer still has battle scars from the immigration fight, as she conceded in her State of the State speech in which she announced her acceptance of the Medicare expansion. Brewer said Arizona should deal with reality on Medicaid instead of wagging a finger at the federal government. “Trust me,” she said, “I tried that once.”

The Arizona governor may win over the legislature on Medicaid, but it’s unlikely she’ll ever again be considered an icon by movement conservatives. An editorial in National Review said Brewer exemplified “that unfortunate common strain of Republican leadership that is uncompromising in rhetoric but opportunistic in reality.”

Medicaid expansion is a crucial component of the Obama administration’s goal of insuring 30 million of the estimated 48 million Americans who lack health coverage. Originally, it was believed that about half the newly insured would come from Medicaid expansion and half from the exchanges. But it’s conceivable that Medicaid, which now covers 66 million people, would enroll as many as 20 million more. No one really knows.

Gov. Jerry Brown of California observed in his State of the State address Wednesday that the new Medicaid rules are “incredibly complex” -- and this from the governor of a state that has enthusiastically embraced both the exchanges and the expansion.

When the Affordable Care Act was being debated in Congress, and afterward when its constitutionality was being considered in the courts, most of the attention focused on a controversial feature -- usually called a “mandate” although the word is not in the bill -- requiring that everyone with sufficient income purchase health insurance or face a tax penalty. Calling it a tax, the Supreme Court upheld the constitutionality of the mandate, but struck down a provision that would have required states to expand Medicaid to persons 133 percent above the poverty line.

The court ruled, on a 7-2 vote, that states could keep their existing Medicaid funds whether or not they decided to expand the program. After the decision, Republicans across the country lined up in opposition to expansion. That opposition poses a continuing threat to the goals of the Affordable Care Act, as Republicans control both the governorship and the legislatures in 25 states and in seven of the 10 most populous states.

Expanding to the 133-percent-of-poverty level would make Medicaid available for individuals earning up $14,856 a year. For a family of three, the figure would be $25,390. The exchanges are intended to provide health care insurance for those with incomes up to 400 percent above the poverty line.

Even if the exchanges function as intended, there will be holes in the safety net for the poor in states that opt not to expand Medicaid. In recognition of this problem, the Obama administration has relaxed rules on states in an effort to coax them into compliance. On Tuesday, a day after Obama declined in his second inaugural address to offer an olive branch to Republicans in Congress, the Department of Health and Human Services issued a regulation that extends a helping hand to states by allowing them to charge higher co-payments for some medical services and prescription drugs.

That’s a big concession. States, even liberal bastions such as California, have been dropping Medicaid services such as optical and dental care in recent years because of costs.

No federal inducements, however, are likely to change the minds of governors such as Rick Perry of Texas, who has called Obamacare a “monstrosity” and predicts that states will be overwhelmed with costs when the federal government eventually reduces Medicaid subsidies.

Still, the hindsight of history suggests that Brewer and her fellow Western upstarts are on the right track in believing that extended medical care for the poor is the wave of the future.

Medicaid came into existence in 1965 as part of the landmark legislation proposed by President Lyndon Johnson that also established Medicare. It was limited at first to providing basic medical services for low-income people, and a number of states, many of them in the West, declined to offer it at all. Over the years Medicaid, combined with other federal programs, grew to provide aid to the elderly and disabled, pregnant women and in some states preventative care services.

One by one, the states that had opted out of Medicaid became enticed by federal funding to sign up for the program. Not until 1982 did every state offer Medicaid. As Gov. Brewer is well aware, the last state to do so was Arizona. 

Lou Cannon, who is traveling in Scotland, has written about the campaign for RealClearPolitics.

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