Why Even Uber-Conservative States Are Now Bending On Obamacare

Few states are as conservative as Wyoming. Nearly 70 percent of its voters went for Mitt Romney in 2012. Out of 90 legislative seats, 78 are held by Republicans. A Republican governor. It also epitomizes the independent streak found in the West, defined by a deep distrust of the federal government.

But even there, state officials are starting to open up to the idea of expanding Medicaid under Obamacare. The legislature requested earlier this year that Gov. Matt Mead (R) meet with the Obama administration to discuss the state’s options. Mead’s office told TPM that the governor met with staff from the U.S. Department of Health and Human Services for the first time in July. Mead said recently that he would present expansion options to the legislature early next year.

“At the end of the day, the expansion failed the first time because of that federal distrust and general disdain for the current administration,” state Sen. Chris Rothfuss (D), who has been a leading proponent of the expansion, told TPM. “It doesn’t matter who’s in the White House. The state of Wyoming is not fond of the federal government. But right now, it’s probably even worse.”

That makes this an almost unthinkable reversal — but one that typifies the shifting sands of Obamacare and Medicaid expansion specifically. Pennsylvania Gov. Tom Corbett, a Republican powered to office in 2010 by the tea party wave, struck a deal with HHS last week to expand Medicaid. Indiana, led by Republican 2016 dark horse Gov. Mike Pence, is already negotiating with the administration on its own plan. Tennessee, a state like Wyoming where there’s no real Democratic threat to Republican dominance that would drive expansion talk, plans to submit a proposal for Medicaid expansion to HHS this fall.

Wyoming is perhaps the prototype for how Medicaid expansion might happen now that most of the easy states — either Democratic-led or with more moderate GOP leadership — have come around. It is a combination of selling conservative lawmakers on the financial benefits of expansion and crafting an alternative plan that is more palatable to conservative ideals in the 23 remaining states that have not yet accepted the expansion.

President Barack Obama announces Sylvia Mathews Burwell as his nominee for Health and Human Services Secretary in April. (AP Photo/Susan Walsh).

The business case for expanding Medicaid seems to be making the biggest headway in Wyoming, Rothfuss and Wyoming Hospital Association president Dan Perdue told TPM. The federal government covers 100 percent of Medicaid expansion’s costs through 2016 and never less than 90 percent after that.

So in states that haven’t expanded, their federal tax dollars are paying for expansion in other states while their hospitals are left caring for the uninsured left uncovered because of the state’s decision not to expand. That’s more than 17,000 people in Wyoming. Another Republican governor, Arizona’s Jan Brewer, used that fact to sway her state’s GOP lawmakers to accept Medicaid expansion.

There is now a growing body of evidence about how refusing to expand Medicaid hurts hospitals financially. Fitch Ratings cited missing Medicaid money in recent credit rating downgrades for some hospitals in non-expansion states. Meanwhile, hospitals in expansion states have reported drops in uninsured patients and the corresponding increase in paying customers, a sure benefit to their bottom line.

Hospitals were among the key stakeholders that helped to get Obamacare passed in the first place. But they’ve been hung out to dry in states that declined to expand Medicaid. Some hospital associations in major states have said that they’re basically giving up for the time being until the political winds change. But others in states like Wyoming are pressing on and perhaps setting a template for how to push expansion through in these tougher political environments.

Mead cited the hospital association’s statistic on lost federal dollars when explaining the latest developments. The group, which is leading the lobbying coalition that is pushing for expansion in Wyoming, has been sending information to state legislators and current legislative candidates in the mail and meeting with select lawmakers. Perdue himself has sat down with Mead three times on the issue, he said.

“I think it’s starting to slowly sink in,” he said. “We live in such a conservative state. With anything that the president is behind, it kind of spells the death knell of a politician if they support the Obama administration.”

Rothfuss characterized the remaining ideological obstacles — and the need for this new pitch — a bit more bluntly.

“We’ve already got everybody that is susceptible to the humanitarian argument,” he said. “We need new arguments because that didn’t get us enough.”

Wyoming Sen. Chris Rothfuss (D). (AP Photo/Alan Rogers).

Simple expansion seems to be off the table after it failed this year, so Wyoming is expected to seek some kind of alternative proposal, which is why officials are meeting with HHS. The administration has already signed off on alternative plans that adopted conservatives policies, like using Medicaid dollars to pay for private health insurance and requiring some enrollees to pay small premiums.

Mead hasn’t said what specifically has been discussed with federal officials, but Perdue and Rothfuss said that they expect their state’s plan to incorporate some of those concepts. There could also be a trigger that would allow Wyoming to pull out of the program if the federal government fails to meet its funding pledge, yet another reflection of that distrust of Washington, D.C. Few think it would actually be plausible for a state to drop Medicaid expansion after adopting it, but it’s still a symbolic gesture for conservatives to latch onto.

“I just really want to get something passed. We’ve left all these people entirely uncovered and gave them nothing,” Rothfuss said. “I’m hopeful that there will be enough people that will come to the table and understand how this will help the Wyoming economy that didn’t the last time. That’s how we’ll get enough votes to pass it. That’s what I’m relying on.”

It isn’t a done deal by any means. The legislature rejected outright expansion earlier this year. An amendment to request that Mead explore the state’s options, which was watered down from a requirement, was the best that Rothfuss could muster. Mead has been consistently coy, even in private meetings, about how he would react if an expansion plan got through the legislature. He has, at the least, though, gone forward with the preliminary conversations with HHS.

“The meeting was informative. CMS provided assurances that it would work with Wyoming,” the governor’s office told TPM of the July meeting. “There is still much to be done before a proposal can be submitted to the Legislature pursuant to the statute.”

“He has not indicated that he would block expansion and he has not indicated that he would support expansion,” Rothfuss said of his private conversations with Mead. “There’s obviously a big difference between whether the governor is opposing something enough that he would veto it and stop it from happening or if he personally opposes it but feels it’s the legislature’s responsibility.”

But with the events of the last few months tracking in the right direction, those advocating for expansion said they are optimistic in the long run.

“I think we’ll pass Medicaid expansion at some point,” Perdue said. “As more states adopt it, especially if we take a look at ways to personalize it and make it more suitable to Wyoming, I think there’s an interest in doing that.”