Friday, June 29, 2012

The Medicaid Component

Nancy Pelosi appears confident, as the decades-old cliche has it, that God's in his heaven. all's right with the world.   Suzy Khimm of Ezra Klein's Wonkblog reports 

The Supreme Court ruling still leaves Republicans with an opportunity to blow a major hole in the law: individual states can choose to opt out of the Medicaid expansion in 2014 without losing federal funding. That could leave some low-income Americans caught in a “no man’s land,” as my colleague Sarah explains. But Nancy Pelosi doesn’t believe it’s going to be a problem. “I don’t think governors will turn that down. People have the need, the urgency is there,” the House Democratic Leader told reporters on a press call Thursday afternoon.

Pelosi argued that it will be extremely difficult for conservative states to opt out once their residents see how other states are benefitting from the Medicaid expansion. “Once this bill is rolling and people experience benefits of it, it’s very hard for a state to say [no],” she said. States will also receive full federal funding for the first three years of the expansion before they have to take up more the expense, which Pelosi described as a major incentive to get them to participate.

At SCOTUSblog, Kevin Russell breaks down in detail the vote among the nine Supreme Court Justices on expansion of Medicaid in the Affordable Care Act.    That can make your head spin, but he also summarizes the Court's decision on provision, explaining

The Court’s decision on the constitutionality of the Medicaid expansion is divided and complicated.  The bottom line is that: (1) Congress acted constitutionally in offering states funds to expand coverage to millions of new individuals; (2) So states can agree to expand coverage in exchange for those new funds; (3) If the state accepts the expansion funds, it must obey by the new rules and expand coverage; (4) but a state can refuse to participate in the expansion without losingall of its Medicaid funds; instead the state will have the option of continue the its current, unexpanded plan as is.

Pelosi may be on to something, confident "once this bill is rolling and people experience benefits of it, it's very hard for a state to say" 'no.'     Pro Publica notes the federal government would cover nearly 93 percent of the costs of the Medicaid expansion from 2014-22 in order to cover non-elderly individuals with incomes up to 133 percent of the poverty line, or about $30,700 for a family of four. .    The Center for Budget and Policy Priorities has argued that the additional cost to the states would be only 2.8% greater than what they would have spent on Medicaid during that period were there no health reform.   Further, state and local governments would have greater savings because of lower health-care costs for uninsured individuals.

But she's probably wrong.     Consider, for instance, the case of New Jersey, one of the 24 states which did not join the suit against the mandate.       In his first year as Governor, Chris Christie cut $7.5 million in funding for women's health care programs.    When the Democratic-controlled legislature restored the funds,  the legislation was vetoed by Christie, even though the state's taxpayers would have had to put up only $1 for every $9 kicked in by Washington.   (The veto was not overridden.)     So in a relatively liberal state, women's health programs, which would have required little sacrifice by its taxpayers, was slashed- and the governor remains fairly popular.  

This lesson, and similar ones throughout the country, are not likely to be overlooked by Repub governors and state legislatures who recognize that expansion of Medicaid would help prove that government works.   And that is anathema to the Gas and Oil Party.

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