The ‘Incredible Tug Of War’ Over O’Care Repeal And Medicaid Expansion

How to deal with Medicaid expansion has become the latest sticking point in Republicans’ effort to dismantle the Affordable Care Act. While most lawmakers acknowledge it’s a major source of tension, there appears to have not been any decisions made yet as to whether states should be able to keep their expanded eligibility — and whether the federal government should continue to subsidize a vast majority of it.

“That’s the $94 question, and I think there will be an incredible tug of war,” said Rep. Mark Sanford (R-NC), a House conservative who unveiled his own Obamacare replacement plan Wednesday.

“That won’t be decided in a bill like mine. That’s going to be decided at the conference level, I think, ultimately, with sort of what repeal looks like or doesn’t look like, and I don’t think anybody has divined the answer to that one yet,” Sanford said.

GOP lawmakers who represent red states that opted into the expansion have said from day one that they wanted to treat the issue delicately. But the path forward on a solution just got a whole lot more complicated this week with the House Freedom Caucus’ endorsement of the 2015 Obamacare repeal legislation that was vetoed by President Obama. That bill would phase out the Medicaid expansion over the course of two years. While Freedom Caucus conservatives have signaled some wiggle room in that stance, they have made clear their resistance to maintaining the expansion.

“Medicaid expansion would be difficult,” Rep. Raul Labrador (R-ID), a House Freedom Caucus member, told reporters. “Some of our states chose not to expand Medicaid and now some people in Congress want my state to pay for somebody else’s Medicaid expansion so that scenario, I see that as a very difficult thing.”

The dispute is not just between the GOP conference’s moderate and hard-right factions. It pits non-expansion state Republicans against expansion state lawmakers, who have heard from their governors that any GOP health care plan that gives states more flexibility to implement the Medicaid program should not come with a shift of costs to the states. Currently, the federal government pays the full cost of a state’s expansion in the first three years beginning in 2014, with its contribution decreasing to 90 percent by 2020.

“It ought to be left to the states,” Sen. John McCain (R-AZ), whose state has expanded, told TPM Wednesday. “States ought to decide for themselves as to what direction they want to go.”

McCain and other Republicans’ reluctance to give up the expansion is based in the reality that lawmakers in expansion states risk seeing hundreds of thousands of their own constituents lose their coverage. More than 14 million people have enrolled in Medicaid through the expansion, according to Kaiser Family Foundation, and even more would have had access to the program, had it not been for the 2012 Supreme Court decision that made it optional for states. The ruling undermined the Obama administration’s goal for the program, which was to close the gap between the point on the federal poverty line where Americans become eligible for ACA tax credits and states’ varying Medicaid eligibility requirements.

“We just need to figure out how to do it fairly for both [expansion and non-expansion] states,” said Rep. Pat Tibieri (R-OH), who is the Health subcommittee chair under Ways and Means and whose state expanded Medicaid. “How to give governors the flex to take the people — so in my state, 700,000 people, at 101 to 138 percent of poverty — give governors some flexibility on how to transition those people out of Medicaid into the private marketplace.”

According to a Politico report, one of the options being considered is to at first grow the Medicaid program to equalize the playing field between expansion and non-expansion states, with federal savings coming in the long-term by block granting the funding.

“I don’t see any scenario where 31 states that expanded end up getting monies for their populations and the 19 states that didn’t expand, don’t,” Sen. Bob Corker (R-TN), whose state did not expand, told reporters last week.

“I can’t image that a Republican-controlled House and Senate would further something that penalizes 19 states that didn’t participate,” Corker said.

There was a so-called “listening session” with rank-and-file House members on Medicaid Tuesday afternoon on the Hill. There is another informational meeting for House Republicans scheduled for Thursday morning, where Energy and Commerce Chair Greg Walden (R-OH) said they’ll get more feedback from members on the Medicaid expansion question.

It’s not clear that a phaseout of the program would fly in the Senate, where 19 Republicans represent Medicaid expansion states.

“You would not be able to fulfill President Trump’s pledge,” one of those senators, Sen. Bill Cassidy (R-LA), told reporters when asked about the House conservatives’ desire to end the expansion in two years. “President Trump has said he wants all covered, caring for those with pre-existing conditions. The reality is you would not be able to do that.”

The question came up briefly in the luncheon Senate Republicans hosted Wednesday for the newly confirmed Health and Human Service Secretary Tom Price, according to members. Cassidy said that Price addressed the question as something that was still being negotiated.

Asked if they had gotten closer to finding a solution, McCain told TPM no, but added that Price has “only been in the job three days or four days.”

“It’s one of the issues that’s got to be resolved.” Sen. Mike Rounds (R-SD) told reporters after the Price meeting. “I think everyone has a different idea on it and part of it is we want to make sure that the states are treated very fairly.”