Expanding the Umbrella: Medicaid Expansion 2015 Review and New Year's Preview

With 2016 right around the corner, and several new governors moving into office, it's as good of time as any to take stock of where the Medicaid expansion has gone and the prospects for progress in the new year.  Despite massive Democratic setbacks at the state level in the 2014 midterm elections, Medicaid expansion fared reasonably well in 2015, and 2016 posts several opportunities for new states to expand as well, as well as one at risk of backsliding.

First, we visit the ghosts of Medicaid expansion past:

As Chart I shows,  the ACA Medicaid expansion has proceeded at a similar overall pace to the original Medicaid take-up in the late 1960s, though the holdouts to Obamacare are likely to offer stiffer resistance than the late adopters of the initial program.

Democratic defeats in the 2014 elections likely prevented expansions in Maine and possibly Florida, and may have influenced resistance to expansion plans in several other states, including Tennessee, Utah and Wyoming. However, Four new states joined the expansion -- Indiana, Pennsylvania, Alaska, and Montana -- which increases the number of states fully expanding Medicaid from 26 to 30. 

Head below the fold for state-by-state analysis and a peak at 2016.

With Bel Edwards win, Louisiana set to expand Medicaid

A quiet legislative maneuver from last Spring combined with an unexpected triumph of Democrat John Bel Edwards in the governor's race makes it nearly certain the Louisiana will become the 31st state -- and second in the former confederacy --  to expand Medicaid.

On Saturday, Edwards, who strongly favors expansion, easily defeated sitting U.S Sen. David Vitter in Louisiana's gubernatorial run-off election (after throwing this haymaker on the airwaves). Edwards' replacement of Bobby Jindal in itself removes a massive obstacle to the Medicaid expansion, as Jindal is an implacable (and inexplicable) foe of covering 242,000 uninsured Louisianans.

However, the state legislative majorities remain firmly in GOP hands in Louisiana. This phenomenon has stalled governors who have wanted to accept the expansion: just ask Jay Nixon in Missouri, Terry McAuliffe in Virginia and (until recently) Steve Bullock in Montana.

But the good news is that the legislature in Louisiana already has acted. Well, sort of. The legislature has rejected multiple bills expanding Medicaid in 2013, 2014 and 2015. However, in 2015 both houses passed a joint resolution laying out circumstances under which the state can expand Medicaid. The resolution creates a mechanism under which -- if a new governor assents -- the department of health and hospitals will set a fee on hospital systems to fund any state portion of the Medicaid expansion. Hospitals will likely be fine with this, as the bill exempts the smallest providers and in any case accepting federal Medicaid dollars will pump a much greater amount of funding back into the system.

In short, the legislature isn't exactly pushing for an expansion, but it is devolving its power to set up a mechanism under which a governor can chose to take it. That's exactly the opposite of what Texas did in 2013, when it took away the governor's power to accept the expansion in order to make it less likely that the state would take it.

So in any case, at least we're stumbling forward toward doing the right thing -- after we've tried everything else, of course, but I'll take it.  

Finally, note that this happening is further evidence of two important points.

First, Republican resistance to the Obamacare remains strong and widespread, but continues to slowly erode at the state level.

Second, quite simply is that elections still matter. Each of the four major contenders in the Louisiana gubernatorial race, including the three Republicans, expressed openness to expanding Medicaid. However, Edwards was the most consistent and strident supporter of expansion and is the least likely to impose conditions on expansion that would hurt recipients.

Medicaid Expansion gets entrenched in Arkansas -- even with a conservative GOP government

The latest news out of Arkansas offers more evidence that the Medicaid expansion will durable even in the most conservative states once it gets entrenched.  

I argued this point tentatively in March when new Republican Governor Asa Hutchinson and large GOP majorities in the state legislature reauthorized the expansion, which had been put in place under Democrat Mike Beebe’s administration, for the current fiscal year while putting together a task force to examine long-term tweaks in the system.

Arkansas has an unusual expansion: instead of simply enrolling everyone eligible in traditional Medicaid, the expansion provides subsidies to fully pay for private health insurance sold on the exchanges. As Richard Mayhew notes, commercial policies have higher costs than Medicaid, so the plan is a more expensive piece of “performance art,” albeit one that still accomplishes the primary goal of getting people covered.

The Arkansas Times picks up the story from there. As the federal match starts dropping in 2017 (and Arkansas enters new negotiations for a waiver with the Feds), the state found its was going to be on the hook for an extra $50-60 million, and Hutchinson implored the task force to cut costs.

Last week he met with the Task Force and made a speech with three major parts.

First, he engaged in the usual right-wing Kabuki ritual of complaining about how horrible Obamacare was and that it was taking away health insurance and….

(insert Charlie Brown trombone sounds here).

Oh, sorry, nodded off there. 

Second, he offered several of the usual conservative pet rocks to cut costs: notably requiring  more premium cost sharing for people above the poverty line (Iowa does this and the Feds would likely approve it in a waiver), requiring some sort of job search requirement for people on Medicaid that wouldn’t require a new waiver (this Feds won’t tolerate much here, and most of the people on expanded Medicaid work anyway) and making sure that working people with access to health insurance take that rather than enrolling in Medicaid (this will affect almost no one).

Finally, after emphasizing his anti-Obama bona-fides, he got to the real point: The Medicaid expansion had covered more than 220,000 of “our friends, our neighbors and our families,” and that rejecting it would cut them off of health care and drain more than $1.4 billion from the state economy. He also made the biggest policy proposal, which would be to shift everyone below the poverty line from private plans to the cheaper (and just as comprehensive) traditional Medicaid.

So the big conservative plan to tweak the “private option” Medicaid expansion in Arkansas and be fiscally responsible is to …. move more people into traditional Medicaid, just like Obamacare originally envisioned. I swear HHS Secretary Sylvia Burwell and President Obama just exchanged knowing glances and an extremely restrained fist bump in the Oval Office.

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Medicaid Expansion Keeps Stumbling Forward -- and Proves Surprisingly Resilient

With the results of the 2014 elections, the pace of Medicaid expansion has become frustratingly slow for progressives.  However, the overall picture has two very important positive points for those seeking to provide universal health care in this country. First, despite meeting several setbacks and roadblocks recently, the expansion continues to grind ahead –excruciatingly slowly, but ahead all the same -- to new states. Second, recent developments in Arizona and Arkansas suggest that a state’s expansion may be durable even in states that get taken over by hard-right governments.

On the first point, Indiana joined the parade of Conservative states expanding Medicaid under a waiver in January. Pennsylvania, under its new Democratic Governor Tom Wolfe, has thrown out the complicated waiver plan submitted by outgoing governor Tom Corbett and is replacing it with a traditional expansion more congenial to beneficiaries (elections matter). Frustrating setbacks have happened in Tennessee and Wyoming, when legislative committees defeated plans negotiated by their governors to expand Medicaid, at the behest of an Americans for Prosperity pressure campaign. However, Utah and Montana are still considering their own plans – and Kansas(!) of all places looks like it may join soon too. Vox, as usual, has the snappy summary.

The second point is more interesting and, for now, just as encouraging. In 2013, Arkansas had negotiated an expansion with waivers under Democratic Governor Mike Beebe to mollify the Republican-controlled legislature. However, it looked like the plan might not survive new Republican Governor Asa Hutchinson and a much larger and more conservative Republican majority elected in 2014. But Hutchinson got behind the program with a few tweaks and convinced the legislature to approve it for another two years while forming a committee to seek a new waiver in 2017.   

In Arizona, the situation appears more ambivalent. Outgoing Republican governor Jan Brewer choose to expand Medicaid in 2012 over howls of protest from conservatives in her legislature. Incoming Governor Doug Ducey has suggested he’s against the expansion, while conservatives made gains in the Arizona statehouse in 2014. Medicaid expansion looked doomed.

But an in-depth examination of legislation Ducey just signed trying to curtail the expansion is instructive. The legislation consists of two Republican pet rocks: attaching work requirements to Medicaid recipients, and limiting beneficiaries to five years total of receiving Medicaid before throwing them off the program. It’s an ugly bill. But notice that the law doesn’t eliminate the expansion, it only attempts to modify it with issues a GOP legislator could plausibly defend as “common-sense reforms.”More importantly, any of these changes would have to be negotiated with the Federal Department of Health and Human Services.

At least for the next two years, those negotiations are going to go like this:

ARIZONA: “We want you to give us a waiver to create work requirements for beneficiaries and throw them out of Medicaid after five years” (hands over proposal).

HHS SECRETARY BURWELL: “Would it annoy you if I did this?” (Folds proposal into paper airplane and tosses it back at Arizona’s forehead)

The bill binds Arizona state officials to go back to the Feds every year and beg for the waiver.  Those conversations are going to go like this:

ARIZONA: “We want you to give us a Medicaid waiver to…”

BURWELL: (Takes proposal. Blows nose on proposal. Crumples it up and hands it back)

What we have here is Politics 101: it allows Arizona Republicans to both whine loudly about how horrible the federal government is, while looking like they are doing something to fight the dastardly Obamacare Medicaid expansion by writing sternly worded letters. They also get to quietly take advantage of all its benefits (including federal funding) that will remain at least as long as a Democrat controls the White House.

So at first glance, at least, the Medicaid expansion is looking surprisingly resilient, even in its infancy. Despite the poor results of the 2014 elections, the expansion continues to meander forward in several states. And every state that takes the expansion may have quite a hard time getting rid of it. This stickiness is good news for justice and for hundreds of thousands of people who get access to health care.

Medicaid expansion: Who's next?

Right now, we're all breathlessly watching the Healthcare.gov to see if glitches are getting fixed and people are signing up,  but let's pause from that briefly today and look down the road a bit.

One of the biggest immediate holes in the Affordable Care Act opened up when the Supreme Court ruled that states didn't have to expand Medicaid in order to keep their current federal support. Getting more vulnerable people under the poverty line access to health insurance needs to be  a major priority over the next several years. So which states might can we most effectively organize in to push Medicaid expansion?

Currently, 25 states have embraced the expansion, while 25 are still debating the issue or have rejected the expansion for now. (Three days ago, Alaska became the most recent state to announce that it wouldn't be taking the money).

But just because they say "no" today doesn't mean they'll say "no" tomorrow. As Kaiser Foundation research points out, offering lots of federal money to states eventually got nearly every state to deploy some sort of Medicaid program in the 1960s and 1970s and some sort of CHIP programs (children's health insurance) in the late 1990s.

Oddly enough, the Medicaid expansion of the ACA is getting adopted at almost the exact same pace that the original Medicaid was adopted. After one year of available matching funds in 1966, 26 states had opted into the program. A month before the expansion under the ACA goes live, 26 states are at least tentatively (and mostly firmly) in the expansion camp.

The similarities may end there, as Republican intransigence across a wide swath of the South and West will likely block expansion for the foreseeable future. However, even in some GOP-dominated states like Arizona and North Dakota, the expansion has been adopted, so this provision is not absolute.

More immediately though, there are several very ripe target states activists should focus on for immediate results. I list these below with how many uninsured people would be covered under Medicaid expansion (numbers again courtesy of Kaiser), in rough order of degree of difficulty of passing an expansion over the next two years.