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Dollars and sense

Republican governors opposed to ACA opting in for Medicaid expansion
By Chris Anderson

While Republican members of Congress have announced plans to once again use budget measures to attempt to defund key parts of health reform  -  including nearly $1 billion the Office of Management and Budget requested for CMS, which presumably would be used for the establishment and operation of state health insurance exchanges  -  their Republican counterparts who occupy state governors' mansions have begun to sing a different tune.

Many of health reform's biggest critics are widely recognizable Republican governors, including Rick Perry in Texas, Bobby Jindal in Louisiana, Rick Scott of Florida and Chris Christie in New Jersey. All have criticized plans to build state health insurance exchanges, and even more vocally, the ACA's blueprint to expand the rolls of Medicaid in all states to include those earning up to 138 percent of the poverty level.

But a funny thing has happened since the re-election of President Barack Obama: a handful of the most strident critics of Medicaid expansion have caved in and announced they will, indeed, participate in Medicaid expansion in their states.

In February, Ohio's John Kasich outlined plans in his budget speech to expand Medicaid, despite a very public feud with the state treasurer who opposes the idea. Also in February, two heavyweights  -  Rick Scott and Chris Christie  -  did an about-face and said they would, at least initially, accept federal government funds to expand their states' insurance program for the poor.

These decisions fell in line with many industry watchers who predicted most  -  if not all  -  governors would eventually opt to expand Medicaid.

But these shifts didn't mark an ideological shift as much as they reflected budget realities in states where significant portions of their residents remain uninsured. With or without Medicaid expansion, someone was going to need to pay for those without medical coverage and since the feds are offering to fund 100 percent of the expansion for the first three years, most Republican governors will be willing to swallow a bit of their opposition if it means keeping their state budgets in line.

 While Rick Scott announced his intention to take the federal money for the first three years and then reassess whether the state would maintain the expansion, a recent report by the Urban Institute produced for the Kaiser Family Foundation suggests Florida is one of the states with the most to gain via Medicaid expansion. According to the report, Florida could expect to reap more than $73 billion in federal funding for an expanded Medicaid program over 10 years, while only costing the state an additional $8.8 billion. In Ohio, the report noted, the state will take in more than $58 billion from the federal government over 10 years, and in New Jersey, nearly $20 billion.

To date, eight Republican governors have announced they will take the federal money to expand Medicaid. Of the 14 states that won't participate in the expansion and another three that are leaning that way, all have Republican governors.

Perhaps what these governors may soon decide is that opposition to Medicaid expansion may not be primarily a healthcare issue for their state.

Excluding the Medicaid provision in the ACA, implementation of other aspects of health reform will cost a significant amount of money, much of it borne by private sector employers. 

With this as a backdrop, Florida legislators serving on the state's Senate Committee on ACA heard from the lobbyists from the Associated Industries of Florida, the state's largest business lobby, that it supported Medicaid expansion.

It also heard testimony from Amy Baker from the state's Legislative Office of Economic and Demographic Research which estimated the state would lose between $6 billion to $12 billion per year if it said no to Medicaid expansion.

And it is this economic reality, not health policy, played out state-by-state, that may eventually lead even more Republicans out of the woods and into the Medicaid expansion playing field.