Medicaid Mattered Most in the SCOTUS Decision

In all of the drama around the recent Supreme Court ruling on the Accountable Care Act (ACA) and the individual mandate, it was the Medicaid eligibility expansion ruling that mattered most.  Hands-down, Medicaid was WAY more important: $1 TRILLION and 17 million Americans’ access to health insurance is now at stake, potentially millions more when Medicaid maintenance of effort rules on states expire in 2014, and it’s all red meat for Red State governors who will devour it at their own peril.

Red State governors will make a spectacle of throwing a middle finger at President Obama — but it’s the most vulnerable Americans and the most hardcore uninsured they’re giving the shaft.  Not to mention hospitals and other powerful provider organizations who would prefer Medicaid to bad debt.  I’ll say it here: the RedGovs’ are bluffing for political gain and most of these jerks will fold before the election, ultimately taking the ACA expansion money in the face of an onslaught of local lobbying.

Why Medicaid mattered: SCOTUS essentially made it optional for a state to participate in ACA’s $1 TRILLION Medicaid eligibility expansion to 133% of the poverty limit.  The federal government is funding 100% of the expansion for the first three years, and will eventually scale back to match $9 to every $1 spent by states. According to the Center on Budget and Policy Priorities, the Feds would pay $931 billion of the cost of the Medicaid expansion through 2022 — while the states would be asked to chip in $73 billion, or about 7%.  It’s a great deal for cash-strapped Red States. If a state declines to participate in the coverage expansion, it will create a huge gap in coverage among the poor and near-poor, and will subject safety-net providers to more bad debt where there was supposed to be coverage.

The Republican governors of 5 states — Florida, Texas, Louisiana, Mississippi, and South Carolina — have declared they want nothing to do with the expansion. “The bottom line here is that Medicaid is a failed program,” Texas Governor Rick Perry — who claims 1.3 million long-term uninsured in his state — said Monday on Fox News. “To expand this program is not unlike adding a thousand people to the Titanic.”

Are we talking about the same Medicaid program?  You know, the one that is the largest source of health insurance in Texas and the nation?  Leaders of 6 other states  are considering the same kamikaze mission.  As of today, the scorecard looks like this:

Hell, No (5) — FL, TX, LA, MS, SC

Probably Not (5) — IA,MO, NE, NV, NJ, WI

Leaning Yes (3) — AR, OR, RI

All-In (10) — CA,CT, DE, DC, HI, IL, MD, MA, MN, VT, WA

Undecided (26) —  AL, AK, AZ, CO, GA, ID, IN, KS, KY, ME, MI, MT, NH, NM, NY, NC, ND, OH, OK, PA, SD, TN,
UT, VA, WV, WY

Publicly-traded health plans and hospitals and Wall Street itself are betting the RedGov’s are chest-thumping too.  WellPoint announced Monday it will spend almost $5 billion to purchase Amerigroup to buy a bigger stake in Medicaid expansion. “When you step back from all this, there are billions of dollars of federal money that are going to flow into the states. We think the states are going to need to take it,” Amerigroup CEO James Carlson said following the announcement.  Stocks for Amerigroup, Molina and Centene all jumped following the SCOTUS ruling, posting gains of 20+% this week.

Stocks for the largest chains of private, for-profit hospitals also shot up following SCOTUS, and the RedGovs’ threats to withdraw from Medicaid have done little to drive them down.  Hospitals expected to be another beneficiary of the Medicaid expansion — in 2010, they paid out $39.3 billion — 5.8 percent of their total expenses — in uncompensated care.

I get the RedGovs’ posturing but still hate them for it: rejecting the Medicaid expansion fits with their crusade to cut government, and a slam on Obama is catnip for their base.  But the ringleader of the RedGovs, Florida Governor Rick Scott, is the former CEO of HCA, one of the biggest publicly-traded hospital chains in the nation.  Texas’ massive hospital districts and Louisiana’s charity hospital system make for noisy, well-funded lobbying campaigns with intense turnout on the ground.  The RedGovs will face the fury of a local lobbying campaign never before seen at the state level.  Hospitals will say they’re doomed to bad debt if RedGovs reject the coverage expansion.  They’ll remind the RedGovs that hospitals are among the biggest employers in most communities and will say that once-rock-solid jobs in their communities are now in peril.  They will point out that without Medicaid expansion, many small safety-net and traditional providers of care to the underserved will cease to exist.

The Kaiser Family Foundation released a poll this week following the SCOTUS ruling, and it found 56% of Americans now say they would like to see the GOP stop their efforts to block the ACA’s implementation and move on to other national problems.  Solid majorities of voters of every political stripe say the decision won’t impact whether or not they vote this November.  That shows the RedGovs’ politics on Medicaid expansion for what they are: opportunistic, fiscally irresponsible, cynical, and heartless.  And they’ll pay for it in November.