HEALTH CARE/Joan Retsinas

Medicaid Expansion

Pity the poor ideologues. You have heard their mantra: shrink government, cut spending, cut taxes. Unshackle citizens from the yoke of Uncle Sam’s strictures. The sound-bytes roll forth with numbing repetitiveness.

The call for Medicaid expansion has put that ideological resolve to a test.

The Affordable Care Act, aka Obamacare, has offered governors a deal. If states expand Medicaid for people up to 138% of income, including people the state might never have covered, like adults without children, the federal government will pick up the entire tab for the first three years. By 2020, the federal share will shrink to 90%. Normally, for Medicaid, the federal government pays from 50% to 75%, depending on the state. The result: more of a state’s citizens will have health insurance. Plus more federal dollars will flow into the state, going to support hospitals, therapists, physicians, treatment centers.

Uncle Sam cannot force states to make this deal. An early permutation of Obamacare mandated states to expand Medicaid. But the Supreme Court blocked that mandate: states can decide.

Ideologue governors and legislators face a dilemma: stay true to true-blue principles of less government, or accept federal dollars.

The lure is powerful -– especially in poor states, with high percentages of uninsured residents. Saying “no” seems akin to saying “no” to a generous benefactor.

But the ideologues don’t see Uncle Sam as a generous Uncle, but as Mephistopheles. And they see the deal – accepting federal dollars to insure more residents – as a Faustian bargain that will destroy their ideological soul.

So to date, roughly one-quarter of the nation’s governors have refused the deal; another one-quarter are undecided. State legislators similarly are torn. Gov. Rick Perry (R-Texas) has issued the most publicized “no,” even though 25% of Texas residents are uninsured. The Center for Public Policy Priorities estimates that an expanded Medicaid would cover 1.75 million Texans, bringing $25.3 billion federal dollars to Texas, costing the state $1.3 billion over four years. South Carolina’s Gov. Nikki Haley (R) has also said “no.” Florida’s Gov. Rick Scott, a Republican, said “yes” – but Republican legislators have tried to block that deal. Mississippi legislators are at an impasse. In Mississippi, the current income cut-off for an individual is $5,500; raising it to 138% of poverty would boost the threshold to $15,000 – adding 300,000 people to the rolls. Ohio Gov. John Kasich (R) wanted to expand Medicaid; recently, a legislative panel voted to drop it from the budget.

Initially some governors espied an ideologically safe end-run – a way to get the federal money, but not expand Medicaid. Instead, they would expand the private insurance plans. Briefly, states would use the federal money put aside for Medicaid expansion to enroll those additional people into the federally subsidized exchanges. People would get coverage, but coverage that cost premiums, with co-payments and deductibles. But for poor people Medicaid is the best option. The administration has barred any such end-run.

It takes a dogged political courage to stay ideologically pure. Newspapers have written up the stories of sick people who will have nowhere to turn if their states decline to expand Medicaid. Hospitals that treat the uninsured have weighed in, pointing to their shaky bottom lines. Fiscal realists in poor states have urged governors to accept the money – the federal outlay will more than compensate for the state outlays. Liberal opponents are sharpening their campaign rhetoric.

Ideologically, the nay-sayers are correct: Expanding Medicaid will expand government spending. Whether the money comes from state or federal governments, it all comes from taxpayers (though the taxing bases differ markedly – the federal government relies on far less regressive taxes). The principled solons are holding fast to their principles. The collateral damage to this principled stance are the millions of poor Americans unfortunate enough to need medical care.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.

From The Progressive Populist, May 15, 2013