Winning the Medicaid Expansion Fight

With summer recess under way for the majority of state legislatures, taxpayers can claim an important victory: less than half of states have opted into the outlandish Medicaid expansion scheme. Many legislators already recognize that Medicaid is already embroiled with fraud, waste, and abuse. Understanding that expanding the system augments the flaws, they want reforms before tying their state to a sinking ship.  But we shouldn’t celebrate for too long—the fight for smaller government rages on as a handful of states have emerged as battlegrounds and others are attempting to craft their own versions of Medicaid expansion.

Tax-and-spenders are trying to paint Medicaid as an ideal program which gives everyone “free” healthcare. A writer at MSNBC portrayed expansion almost as a mandatory policy, stating that “It’s been exactly one year since the Supreme Court ruled that the Affordable Care Act was the law of the land, but Republicans continue to reject it.” This statement fails to acknowledge that the Supreme Court gave states, on that exact same day, the right to opt out of expanding the program. Even beyond this misguided assessment, a growing number of Republican governors have thrown their support behind expansion. Jan Brewer (AZ), Chris Christie (NJ), Rick Scott (FL), Rick Snyder (MI), John Kasich (OH), Susana Martinez (NM), Terry Branstad (IA), Brian Sandoval (NV), and Jack Dalrymple (ND) all have turned their backs on fiscal responsibility. 

The good news is that out of the fifty states and Washington D.C., only  twenty-four (less than half!) have agreed to take part in Medicaid expansion, and twenty-one are not moving forward at this time. Some states, such as Arkansas, Indiana, Iowa, and Tennessee are also pursuing alternative state versions. At the end of the day, there are still a handful of battleground states that could go either way. Because one vote, purposeful or mistaken, can impede the creeping expansion of this immense policy, grassroots communication to state officials has been and will continue to be essential to keep lawmakers from supporting the expansion. 

The following details the current status of battleground states where debate continues:

  • Indiana – Governor Mike Pence has opposed “traditional” Medicaid expansion but has said he would consider an alternative that gives the state more control over the program’s operations and demands more responsibility of the enrollees.
  • Michigan – A Senate workgroup is currently preparing a Medicaid expansion proposal supported by Governor Rick Snyder and is considering an August vote on expansion. Additionally, a “free market solution” counterproposal emerged this week.  
  • Missouri – Democratic Governor Jay Nixon supports the expansion, but the strong Republican majority in the General Assembly is opposed. Debate continues in interim panels designed to look into “transforming” Medicaid.
  • Montana – Medicaid expansion failed by one accidental vote but will be reconsidered in 2014, necessitating strong voter opposition.
  • Nebraska – Governor Campbell and some influential senators are pushing for expansion, but the legislature adjourned in June.
  • Ohio – Governor Kasich is pushing  for expansion because, in his view, God wants Ohio to expand Medicaid. The legislature could go either way. 
  • Utah – Governor Herbert has stated that he won’t decide until December after the budget is released. He is also considering an alternative to the federal expansion plan.  
  • Virginia – By establishing the Medicaid Innovation and Reform Commission (the Medicaid expansion super committee), Governor McDonnell and the General Assembly kept open the possibility of expanding Medicaid. However, the committee appears to be in no hurry to make a decision. The outcome could be influenced by the gubernatorial race between Ken Cuccinelli (opposes expansion) and Terry McAuliffe (approves expansion), who currently holds a slight edge.

Recent events lend credence to the hesitancy of states to fully commit to Medicaid. The administration’s delay of the employer mandate, announced over a Treasury blog post, may shift the balance in the conservatives’ favor. President Obama has framed the delay as an allowance for states to have more time to comply with the mandate; however, it can easily be seen as an acknowledgement of the intricate difficulties involved in widespread enrollment in the entire ACA program, including Medicaid. Michael Cannon at the Cato Institute explains that the “purpose of the employer mandate was to reduce the economic and political upheaval that the rest of ObamaCare will unleash.” Medicaid will be much more burdened without that stabilizing factor for at least the first year of implementation. If an employer mandate is too complex for businesses to carry out, then why think that Medicaid expansion is manageable? Why spare businesses and not individuals? Avik Roy also pointed out that:

Effectively, states no longer need to expand Medicaid, because this newly Medicaid-eligible population can now sign up for the exchanges, at no cost to the state, and know that their incomes won’t be verified by the IRS…The feds will also allow people to gain means-tested subsidized coverage on the exchanges without having to…test their means.

Despite grassroots opposition to the program, some lawmakers and governors continue to be tempted by the promise of “free” federal dollars to expand Medicaid. But that money isn’t free. The Kaiser Family Foundation acknowledges that federal Medicaid spending would increase by 26 percent, or $952 billion, as a result of expansion. State lawmakers should bear in mind that everything that government funds is actually footed by their constituents’ hard-earned tax dollars. Additionally, by rejecting the expansion, state legislators have an opportunity to slow Washington’s reckless borrowing binge.

States’ actions over the next year may determine the future of Medicaid expansion and the Affordable Care Act as a whole. Some legislators propose temporarily trying it out and withdrawing if necessary. This fallacious argument is possibly the most disappointing; as Ronald Reagan cautioned, “governments' programs, once launched, never disappear.” With this in mind, taxpayers should continue to encourage legislators and governors to keep up the good, responsible fight. Otherwise, Medicaid expansion—and an onslaught of tax hikes to pay for it—could be here to stay.