Some Governors Mull Rejecting Reform Law’s Medicaid Expansion

A growing number of governors, state lawmakers and other officials have indicated that their states will not participate in the federal health reform law's Medicaid expansion, Kaiser Health News reports (Galewitz, Kaiser Health News, 7/2).

Background

Last week, the U.S. Supreme Court ruled that states can effectively opt out from the reform law's Medicaid provision without any effect on funding. Writing for the majority in the 5-4 decision, Chief Justice John Roberts affirmed the constitutionality of the Medicaid expansion, but struck down the provision that would have allowed the federal government to withhold existing Medicaid funding if states failed to comply with the expansion.

Roberts noted that the ruling does not prevent Congress from providing funding to "expand the availability of health care, and requiring that states accepting such funds comply with conditions on their use." However, "What Congress is not free to do is penalize states that choose not to participate in that new program by taking away their existing Medicaid funding" he wrote (California Healthline, 6/28).

Some Governors Might Opt Out

According to The Hill's "Healthwatch," the Boston Globe and the Wall Street Journal, the following states might not participate or are considering not participating in the expansion, based on recent statements from governors and other officials:

• Colorado;
• Florida;
• Indiana;
• Iowa;
• Louisiana;
• Maine;
• Mississippi;
• Missouri;
• Nebraska;
• New Hampshire;
• New Jersey;
• Ohio;
• Pennsylvania;
• South Carolina;
• Texas;
• Virginia; and
• Wisconsin.

In recent days, Florida Gov. Rick Scott (R), Louisiana Gov. Bobby Jindal (R) and Texas Gov. Rick Perry (R) have issued statements or made public comments confirming that they will not expand Medicaid in their states and instead will assist efforts to repeal the law.

According to "Healthwatch," the governors' decisions could "strik[e] a blow to President Obama's promise of broader insurance coverage." The Medicaid expansion is projected to extend health care access to at least 17 million additional low-income U.S residents (Viebeck, "Healthwatch" The Hill, 7/3).

Uncertainty About Costs Possibly Influencing Decisions

Matt Salo, executive director of the National Association of Medicaid Directors, said that states may be hesitant to increase Medicaid enrollment because of the initial high startup costs and the uncertainty about future costs (Kaiser Health News, 7/2).

However, states still have a financial incentive to participate in the expansion because the federal government will cover the majority of the costs through 2016 ("Healthwatch," The Hill, 7/3).

States would pay about 7% of the costs, or about $73 billion, between 2014 and 2022, while the federal government would pay $931 billion, or 93% of the projected costs, according to Congressional Budget Office estimates (Kaiser Health News, 7/2).

Lawmakers Urge States To Delay Implementation of Exchanges

Meanwhile, Sen. Jim DeMint (R-S.C.) and Rep. Michele Bachmann (R-Minn.) on Monday released a letter -- which they sent to all 50 governors -- urging states to oppose the creation of the health insurance exchanges, which are required under the health reform law.

The letter tells governors, "By refusing to create an exchange, you will assist us in Congress to repeal this violation which will help lower the costs of doing business in your state" (Viebeck, "Healthwatch," The Hill, 7/2).

Twelve Republican senators and more than 60 GOP House members signed the letter ahead of a scheduled House vote on July 11 to repeal the law (Zigmond, Modern Healthcare, 7/2).