On Medicaid Expansion, Red States Will Be Watching Red States

This was published as a Wall Street Journal Think Tank column on June 30, 2014.

Since the Supreme Court made expanding Medicaid optional for states under the Affordable Care Act, 26 states have expanded Medicaid. Three of the 24 states that have not–Indiana, Utah and Pennsylvania–are considering expanding via federal waivers that they are negotiating with the Obama administration. In Virginia, the newly elected Democratic governor is looking for a way around opposition from the Republican-controlled legislature, which blocked his expansion plans after heated debate. The federal government initially pays 100% of the costs of expansion, phasing down to 90% over time.

If Indiana, Pennsylvania and Utah reach agreement with the administration and move ahead, that would bring to 10 the number of states with Republican governors that have expanded Medicaid. (The others are Arizona, Iowa, Michigan, Nevada, New Jersey, New Mexico and North Dakota.) Other states that have expanded include Arkansas, which has a Democratic governor but a Republican legislature, as well as Kentucky and New Hampshire, which have Democratic governors and split legislatures.

Important red states with large uninsured populations–Texas, Florida and Georgia–are still sitting out the expansion, so a tipping point has not yet been reached on red-state participation. But having been a state human services commissioner for a Republican governor, I know that states watch other states closely. Republican governors and legislators will be watching the red states that have expanded Medicaid especially closely. They will want to know if those states are benefiting economically from their new federal funding; how the expansion has affected their state budgets; if their hospitals and counties are less stressed with the federal government paying more of their bills for serving the uninsured; and if Republican elected officials have been hurt or helped politically by their decision to expand.

Each state has somewhat different politics, but they will be heavily influenced by experiences in other states, and in their fellow red states in particular. If they like what they see, they too may look for ways to thread the needle between the political divisiveness of the Affordable Care Act in their states and the human and economic benefits the law’s Medicaid expansion can offer.