It's health care brinksmanship, with hundreds of billions of dollars and the well-being of millions of people at stake.
President
Barack Obama's health care law expands Medicaid, the federal-state
health program for low-income people, but cost-wary states must decide
whether to take the deal.
Turn it down, and governors risk coming
off as callous toward their neediest residents. Not to mention the
likely second-guessing for walking away from a pot of federal dollars
estimated at nearly $1 trillion nationally over a decade.
If the
Obama administration were to compromise, say by sweetening the offer to
woo a reluctant state, it would face immediate demands from 49 others
for similar deals that could run up the tab by tens of billions of
dollars.
As state legislatures look ahead to their 2013 sessions, the calculating and the lobbying have already begun.
Conservative
opponents of the health care law are leaning on lawmakers to turn down
the Medicaid money. Hospitals, doctors' groups, advocates for the poor,
and some business associations are pressing them to accept it.
"Here's
the big thing: The state does not want to expand Medicaid and get stuck
with the bill," said Dr. Bill Hazel, Virginia's health secretary. "Our
legislators do not like to raise taxes to pay for a benefit someone else
has promised. The concerns we have ... are around federal solvency and
the ability of the federal government to meet its commitment."
Medicaid
covers nearly 60 million low-income and disabled people but differs
significantly from state to state. Under the health care law, Medicaid
would be expanded on Jan. 1, 2014, to cover people making up to 138
percent of the federal poverty line, or about $15,400 a year for an
individual.
About half the 30 million people gaining coverage
under the law would do so through Medicaid. Most of the new
beneficiaries would be childless adults, but about 2.7 million would be
parents with children at home. The federal government would pay the full
cost of the first three years of the expansion, gradually phasing down
to a 90 percent share.
The Supreme Court said states can turn down
the Medicaid expansion. But if a state does so, many of its poorest
residents would have no other way to get health insurance. The
subsidized private coverage also available under Obama's law is only for
people making more than the poverty level, $11,170 for an individual.
For the poor, Medicaid is the only option.
Although the health
care law fully funded the Medicaid expansion and Obama has protected the
program from cuts, the federal government's unresolved budget struggles
don't give states much confidence.
Most states, including Republican-led Virginia, are considering their options.
A
recent economic analysis by the nonpartisan Kaiser Family Foundation
and the Urban Institute found that states will receive more than $9 from
Washington for every $1 they spend to expand Medicaid, and a few will
actually come out ahead, partly by spending less on charity care. States
are commissioning their own studies.
So far, eight states have
said they will turn down the expansion, while 13 states plus the
District of Columbia have indicated they will accept it. The eight
declining are Alabama, Georgia, Louisiana, Maine, Mississippi, Oklahoma,
South Carolina, and Texas. Nearly 2.8 million people would remain
uninsured in those states, according to Urban Institute estimates, with
Texas alone accounting for close to half the total.
Hospitals
aren't taking "no" for an answer in the states that have turned down the
expansion. Although South Carolina's Republican Gov. Nikki Haley has
had her say, the Legislature has yet to be heard from, said Thornton
Kirby, president of the South Carolina Hospital Association.
Hospitals agreed to Medicare cuts in the health care law, banking on the Medicaid expansion to compensate them.
"We've got a significant debate coming in January," said Kirby. "There are a lot of people tuning in to this issue."
In
Maine, Democrats who gained control of the Legislature in the election
are pushing to overcome Republican Gov. Paul LePage's opposition.
"Obamacare"
was once assailed as a job killer by detractors, but on Wednesday in
Missouri it was being promoted as the opposite. Missouri's hospital
association in released a study estimating that the economic ripple
effects of the Medicaid expansion would actually create 24,000 jobs in
the state. The University of Missouri study found that about 160,000
state residents would gain coverage.
"This is not a political
issue for us ... this is the real world," said Joe Pierle, head of the
Missouri Primary Care Association, a doctors' group. "It makes no sense
to send our hard-earned federal tax dollars to our neighbors in
Illinois."
By Thursday, Gov. Jay Nixon, D-Mo., had announced his
support for the expansion, but he faces a challenge in persuading
Republican legislative leaders.
In Florida, where GOP Gov. Rick
Scott says he is rethinking his opposition, the state could end up
saving money through the Medicaid expansion, said Joan Alker, executive
director of the Georgetown University Center for Children and Families,
which studied the financing. The reason is that Florida would spend less
on a state program for people with catastrophic medical bills.
Back
in Washington, Health and Human Services Secretary Kathleen Sebelius
says states can take all the time they need to decide. They can even get
a free trial, signing up for the first three years of the expansion and
dropping out later.
But she hasn't answered the one question that
many states have: Would the Obama administration allow them to expand
Medicaid just part way, taking in only people below the poverty line?
That means other low-income people currently eligible would be covered
entirely on the federal government's dime, and they would be getting
private coverage, which is costlier than Medicaid.
Matt Salo,
executive director of the National Association of Medicaid Directors,
says he doesn't think states will get an answer anytime soon.
"This
is a game of chicken that we're seeing," said Salo. "Are the states
bluffing, or are these states really serious? And at what point does the
administration rethink things, and decide it's worth getting half a
loaf?"
