Fifteen governors reject or leaning against expanded Medicaid program

by Elise Viebeck - 07/03/12 9:00 AM ET

At least 15 governors have indicated they will not participate in the expansion of Medicaid under the healthcare law, striking a blow to President Obama’s promise of broader insurance coverage.

Before Thursday’s Supreme Court ruling, states had the option of either increasing their Medicaid rolls or being penalized by the federal government. The high court struck down that offer as unconstitutional.

{mosads}Governors still have a financial incentive to participate in the expansion of coverage for low-income people, since the government will foot most of the bill through 2016. But the decision is also loaded with politics, particularly for Republican governors who are adamantly opposed to “ObamaCare.”

“You can make the political call real quick, but the actual decision is a complicated one,” said Matt Salo of the National Association of Medicaid Directors. “Governors are going to be looking at the numbers and asking: Does this make sense for us?”

Seven states with Republican governors have given a flat “no” to the Medicaid expansion since the Supreme Court ruling, according to reports and press statements (see list below).

States that will decline to participate include Florida, where Gov. Rick Scott (R) turned his opposition to the law into a political career, and Louisiana, where Gov. Bobby Jindal (R) has vowed to help elect Mitt Romney as president in order to repeal it.

In eight other states — seven with GOP governors — the Medicaid expansion seems unlikely, given comments from governors and their offices.

Texas Gov. Rick Perry (R) “has no interest in fast-tracking any portion of this bankrupting and overreaching legislation,” spokeswoman Lucy Nashed said in a statement Monday. “We will continue to call for the full repeal of the bill.”

Virginia Gov. Bob McDonnell (R), considered a contender to be Romney’s vice-presidential nominee, said his focus is on November.

“The only way to stop Barack Obama’s budget-busting healthcare takeover is by electing a new president,” McDonnell said in a statement following the court’s decision.

New Jersey Gov. Chris Christie (R), also the subject of VP speculation, has not announced what his state will do. His political position is trickier, since he leads a blue state where there is more support for the healthcare law.

In its original form, the Affordable Care Act would have pulled all federal funds for state Medicaid programs that did not expand as the law intended.

Chief Justice John Roberts strongly criticized that approach in his opinion for the majority.

“The financial ‘inducement’ Congress has chosen is much more than ‘relatively mild encouragement’ ” to expand Medicaid, Roberts wrote. “It is a gun to the head.”

Past estimates have found that, as designed, the law’s expansion would have provided healthcare access to an additional 17 million low-income Americans.

“States have a lot to consider,” said Robin Rudowitz with the Kaiser Commission on Medicaid and the Uninsured. “That is a lot of federal money sitting on the table.”

Alan Weil with the National Academy for State Health Policy said states that do not comply could raise the ire of some in Congress.

“If states turn down that offer, it leaves a lot of people uninsured. If we end up in that place, a lot of people in Congress are going to say that is a problem,” he said.

Several Democrats have expressed confidence that the bill’s intention to expand healthcare coverage can still be fulfilled.

Peter Orszag, who led the White House budget office during the healthcare debate and had a major role in shaping the legislation, said states might come around eventually.

He said the law’s coverage expansion would be significantly undercut if a large number of states opt out.

“There may be significant gaps that open up, and that would be unfortunate,” he said, noting that more than half of the coverage expansion was set to come through Medicaid.

But Orszag said there is plenty of precedent for states to expand their Medicaid programs when they don’t have to. About 60 percent of current Medicaid spending goes toward people or benefits that are not mandated by federal law, he said. States decide to provide those optional benefits because the federal government bears most of the cost — and it would cover an even bigger share of the Affordable Care Act’s expansion.

The federal government will cover the entire cost of the expansion for a few years. Its share begins to drop after that, but Orszag said it won’t fall far enough to be a bad deal for states.

“A 90 percent subsidy rate is going to be hard to resist,” Orszag said Monday on a conference call organized by Foreign Affairs magazine.

— Sam Baker, Lydia Nuzum and Gunnar Sidak contributed to this report.

Will your state pursue the healthcare law’s Medicaid expansion?

According to press statements and reports. R/D/I indicate governors’ party affiliation.

YES:
D – California
D – Connecticut
D – Hawaii
D – Illinois
D – Massachusetts
D – Minnesota
D – Maryland
D – New York
D – Oregon
I – Rhode Island
D – Vermont
D – Washington

UNDECIDED, APPEAR TO BE LEANING YES:
D – Arkansas

UNDECIDED:
R – Alaska
R – Arizona
D – Colorado
D – Delaware
R – Idaho
D – Kentucky
R – Maine
R – Michigan
D – Montana
D – New Hampshire
R – New Jersey
R – New Mexico
D – North Carolina
R – North Dakota
R – Ohio
R – Oklahoma
R – Pennsylvania
R – South Dakota
R – Tennessee
R – Utah
D – West Virginia
R – Wyoming