Medicaid expansion, the private option, and the remaining holdout states | Arkansas Blog

Medicaid expansion, the private option, and the remaining holdout states

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Thus far, 26 states plus the District of Columbia have opted in to Medicaid expansion (including Arkansas via the private option). University of California-Berkeley economist Brad DeLong blogs that the next wave could be coming: 

At least three ex-Governors have assured me over the past three weeks that all or nearly all states will find some way to do Medicaid expansion before the 2016 presidential election—that current governors, even in the reddest of red states, are now more scared of their doctors and their hospital administrators than they are of the Tea Party. And they are beginning to fear that the Keynesians are right and that a failure to expand Medicaid could throw their states back into recession—for state governors and legislators do believe that their state prosperity depends on workers doing things that create exports and thus dollars flowing into the state, and in the flow-of-funds Medicaid expansion is an "export."

We'll see. I've long thought that the incentives for state lawmakers would push them toward expansion, even if it took some a year or three or five for the ideological passions to cool. But one should never underestimate the intensity of the anti-Obamacare camp, and of course what other states decide to do will partly be determined by the experiences of the states that did choose to expand in the coming years.

Ed Kilgore at Washington Monthly wonders whether the approach of states like Arkansas will bring others into the fold (Iowa and New Hampshire are both pursuing versions of the private option and many others are rumored to be looking in to the possibility). 

Those of you who have been following the saga of state resistance to the Affordable Care Act’s Medicaid expansion probably know there are two basic bend-the-rules exceptions the administration has accepted in order to pull states over the line: Arkansas’ expand-but-privatize approach (which recently survived a near-death experience in the Arkansas legislature, at least for the next year), and Iowa’s expand-with-“personal-responsibility” approach (allowing more copays and deductibles, and more coercive “healthy choice” programs, than are allowed in traditional Medicaid).

It sounds like Utah is on the brink of cutting a deal with HHS that combines the Arkansas and Iowa approaches...

[I]f, God forbid, I were a Republican governor, I’d come up with a package of every conservative pet rock reform I could think of that was applicable for Medicaid, put it into a waiver package, and tell my conservative friends that I was going to try to get Barack Obama to pay for turning Medicaid inside out. However it turned out, I’d be a political winner with the Right. 

Well...if the Tea Party's response to the private option in Arkansas is any guide, I'd say Kilgore is vastly underestimating how mad the Right will become at any Republican who negotiates at all with the Obama administration!

Kilgore also notes that some on the left might be a little squeamish about this path forward — covering more people, but perhaps, in Sarah Kliff's phrase, "making Medicaid more Republican."  This was, by the way, the explicit goal of the major Republicans who backed the private option. Folks like Sen. David Sanders, who envisioned conservative states piggybacking off of each other in terms of additional asks in Medicaid waivers (a process that has begun with Arkansas following Iowa on non-emergency medical transportation). Part of the reason you see such an intense split in Republican circles in Arkansas — and so much attention from conservatives nationally on the fate of the private option — is a divide over whether the spread of the private option would be a tactical win or a surrender for conservative reformers. For Sanders, this is an "innovative and transformative" reform of the Medicaid program that offers promising new possibilities for other red states. For opponents of the private option, this is lipstick on a pig — a means of selling Medicaid expansion that could spread to other red states and become a permanently entrenched entitlement. For Republicans on either side of the private option debate, those are the battle lines. 

Something you hear from both pro-private option Republicans and state officials all the time is that "other states are watching Arkansas." That's true. But so far, while the private option was a game-changer in Arkansas, it hasn't moved the needle in too many other states just yet. Some expected a wave — it's been more like a trickle. More than twenty states remain in the no column, leaving millions without coverage. One possibility is that anti-Obamacare lawmakers may find it difficult to resist the political pressure to expand. If so, some may find themselves "watching Arkansas." Stay tuned.  


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