Medicaid Expansion a Minefield in Push for Health Care Reform

One of the most contentious issues in the health care reform debate has been the proposed expansion of Medicaid, and it wasn’t just about the “Cornhusker Kickback,” a provision included in the Senate bill that would have the federal government cover the full cost of the Medicaid expansion for the foreseeable future. 

Much of the debate came down to money — both Republican and Democratic governors argued that their states couldn’t afford to share the cost of the proposed expansions with the federal government.

The House bill would expand Medicaid to all Americans whose incomes do not exceed 150% of the federal poverty level beginning in 2013.  Under the bill, the federal government would cover the full cost of the expansion for two years and 91% of the cost of the expansion beginning in 2015.

By comparison, the Senate bill aims to expand Medicaid only to people whose incomes do not exceed 133% of the federal poverty level by 2014.  Similar to the House bill, the Senate proposal calls for the federal government to pick up the full tab for the expansion for two years but would adopt a more complicated formula to determine how much the federal government would pitch in to cover the newly eligible beneficiaries after 2016.

Gov. Arnold Schwarzenegger (R) was one of the fiercest opponents of the provisions.  He pointed to California’s estimated $20 billion budget deficit to argue that the state couldn’t afford its Medicaid program as it currently stands, let alone with millions of additional beneficiaries.

Schwarzenegger is asking the federal government for additional funding to help the state shore up Medi-Cal, and he also is pushing for the state to get more flexibility to reduce Medi-Cal benefits and make other structural changes to the program.

A month after Massachusetts elected a Republican to the Senate and shifted the balance of power, the prospects for health care reform are anything but certain. 

Will congressional Democrats close ranks and power through with a bill?

Will President Obama’s health care summit produce the groundswell of bipartisanship that would be needed to win over at least a couple Republican votes?

Or will we be looking at 1994 all over again when the nation’s last major push for health care reform collapsed?

Unfortunately, we’re no closer to knowing the answer to those questions than we are to how California legislators will tackle that massive budget deficit. 

In the meantime, here’s a rundown on preparations for next week’s summit.

Gearing Up

• On Friday, White House Chief of Staff Rahm Emanuel and HHS Secretary Kathleen Sebelius sent a letter to 12 Democratic and nine Republican members of Congress to formally invite them to the televised White House health reform summit on Feb. 25, Reuters reports (Zengerle, Reuters, 2/12). According to Politico‘s “Live Pulse,” the meeting is expected to include a discussion — moderated by President Obama — on four topics: insurance reform, cost containment, coverage expansion and the prospects for health reform to reduce the deficit (Budoff Brown, “Live Pulse,” Politico, 2/12).  The letter was sent to Democratic and Republican leaders in the House and Senate, as well as the chairs and ranking members of the five congressional committees that helped craft health reform legislation. Vice President Biden, White House Office of Health Reform Director Nancy-Ann DeParle and Sebelius also are expected to attend the meeting (Reuters, 2/12).
• Senate Minority Leader Mitch McConnell (R-Ky.) and several other Republicans last week expressed concerns with the planned format and proceedings of the scheduled summit, Roll Call reports. McConnell said that he wanted to be a part of the planning efforts, adding that the Republican leadership would “consult with the White House about the proposed format and topics in order to maximize the effectiveness of the meeting” (Drucker, Roll Call, 2/12).
• Some Senate Democrats say that the bipartisan summit does not mean that they are giving up the idea of passing certain reform measures through budget reconciliation, Roll Call reports. According to Roll Call, the lawmakers cited unified GOP opposition to overhaul efforts as reason enough to keep the strategy as a possibility (Drucker, Roll Call, 2/16).

Getting Nervous

• Trial lawyers are concerned with President Obama‘s apparent willingness to compromise on the GOP’s push for medical malpractice reform, The Hill reports. Obama recently indicated he would consider discussing medical liability reform as a gesture of bipartisanship (Young, The Hill, 2/14).
• U.S. hospitals could face tens of billions of dollars of additional expenses if health care reform legislation does not pass, because of an expected increase in the number of U.S. residents who have little or no health insurance, the New York Times reports (Abelson, New York Times, 2/9).
• The agreement between the White House and labor union leaders last month to adopt an excise tax on high-price employer-sponsored health insurance plans has started to lose support among labor leaders, the New York Times reports. Although the White House continues to urge congressional leaders to adopt the tax, the leaders have shifted away from the proposal following the Massachusetts special election in January, which resulted in Democrats losing their filibuster-proof majority (Pear, New York Times, 2/16).