Medicaid Expansion in Red States

This was published as a Wall Street Journal Think Tank column on December 18, 2014.

In the struggle between pragmatism and ideology over Medicaid expansion in red states, pragmatism may slowly be winning. Gov. Bill Haslam‘s announcement Monday of his plans to expand Medicaid under the Affordable Care Act makes Tennessee the 10th state with a Republican governor to expand the program (if the state legislature approves the plan). The others are Arizona, Iowa, Michigan, Nevada, New Jersey, New Mexico, North Dakota, Ohio, and Pennsylvania (which just elected a Democratic governor but expanded the program under a Republican). The governors of Indiana, Wyoming and Utah have also announced plans to expand.

Many of these states are or will be negotiating with the Obama administration to expand Medicaid coverage for adults in ways that match their more conservative policy preferences and allow elected officials who opposed the health-care law to continue to distance themselves from Obamacare. That could mean Medicaid dollars would be used to buy private insurance. Other possibilities include adding premium cost-sharing for some beneficiaries or co-pays for certain services, promoting job training for unemployed Medicaid beneficiaries, or adding financial incentives to promote healthier lifestyles.

The midterm elections have produced a fresh round of efforts in Congress to chip away at the ACA, and the King v. Burwell case pending before the Supreme Court is likely to be resolved in a June decision. Meanwhile, a constituency for the ACA is slowly being built in Republican states that will have a stake in their own Medicaid expansions under the ACA and the substantial federal funding expansion brings. Many more uninsured people will also gain coverage. In Tennessee, for example, 142,000 uninsured adults would be newly eligible for Medicaid coverage if the state expands its program. Still, several big Republican states have not expanded and show no signs of doing so soon, including Florida (which has 670,000 people in the Medicaid gap group) and Texas (948,000).

These days, momentum in the states lies with pragmatism over conservative ideology and anti-Obamacare sentiment–that is, provided the details of the deal between the administration and these states are just right. But momentum could swing back, depending on developments in Congress and the Supreme Court.