GOP Governors Face Tough Dilemma On Medicaid Expansion

Obamacare has put Republican governors in a pickle.

Ambitious GOP governors in blue and swing states — including Chris Christie of New Jersey, John Kasich of Ohio, Scott Walker of Wisconsin, Rick Snyder of Michigan and Rick Scott of Florida — have yet to decide whether to accept the law’s Medicaid expansion. And they’re in a tight squeeze between conservatives demanding they turn it down, on one hand, and the enticing offer of a large sum of federal money on the other.

Republican governors broadly criticized the Medicaid expansion after the Supreme Court made it optional last summer. Christie praised that part of the Court’s decision, calling it “extortion” to force states to broaden Medicaid. Scott initially said he’d opt out before later hedging. Walker, Kasich and Snyder expressed concerns but deferred until the election.

Now the election is over, and the Affordable Care Act isn’t going anywhere, forcing them to make a tough decision.Rejecting the Medicaid expansion, as many fellow Republican governors from red states have done, would endear them to the conservative base, which detests the Affordable Care Act.

But that would deny a huge benefit to their constituents, whose states all voted for President Obama twice. The provision would enhance Medicaid eligibility to their residents up to 133 percent of the poverty line. The federal government would cover the full cost of the new beneficiaries in the early years and 90 percent after 2020.

Internal party politics aside, it’s an enticing deal for governors, and consumer advocates are reminding them of the thousands of their constituents it would help. And what makes their decisions harder is that they cannot split the difference: the Obama administration announced last month that it would not cover partial expansions.

The idea that large numbers of states would turn down the expansion worries the health industry. They fear that sick patients would gravitate to the states that have more generous Medicaid coverage and thereby raise their costs dramatically.

“It will force the less healthy into those states, creating a death spiral,” said a hospital industry source. “It’s bad policy all the way around.”

Republican governors from red states like Kansas and Louisiana have less political room to upset their right flanks. In rejecting the expansion, they argue that the cost of the expansion would be too high and echo conservative advocates in suggesting the federal government won’t come through with the funds that it has promised.

The Obama administration has not established a deadline for states to make a final determination. But the Medicaid expansion takes effect in Jan. 2014, and states are widely expected to include their decisions in their upcoming budgets early this year.

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