ObamaCare Derangement Syndrome Fades, Medicaid Expands.

Last week’s approval of Pennsylvania’s Medicaid expansion waiver by the Centers for Medicare and Medicaid Services (CMS) may have been good medicine for ObamaCare Derangement Syndrome among Red State governors. Growing numbers are beginning to see the light and resistance to expansion is beginning to crumble like stale crackers.  Expansion momentum is building in Republican-led states after Pennsylvania’s change of heart. Indiana, Tennessee, Utah and now Wyoming (!) may be next in line seeking CMS approval for their conservative-oriented expansion proposals. These custom Medicaid expansion proposals include administration by risk-bearing private health plans, increased beneficiary cost-sharing, job search requirements, and mandatory health assessments, among other conservative tenets.

What’s finally bringing them to the table after PA’s approval?  A flurry of studies this summer, including the White House Council of Economic Advisors, the Urban Institute, and a PwC Institute report, noting that non-expansion states will lose out on over $420B in federal funds between 2014 and 2022, but are still contributing to expansion in other states through Federal taxes, and are doing violence to hospitals, often economic anchors of their communities. Urban’s conclusions were particularly clear:

• The decision of state leaders not to expand Medicaid also means their local hospitals will collectively forgo $167.8 billion in Medicaid reimbursement payments over the same timeframe.
• Based on analyses of state budgets, for every $1 a state spends expanding Medicaid, $13.41 in federal funding flows into the state.
• In total, hospitals in states not expanding stand to forgo $167.8 billion in reimbursement funding from 2013 to 2022.

The drumbeat has stripped raw the opposition for what it is: the last vestiges of ObamaCare Derangement Syndrome.  Economic rationality is beginning to take hold.  And that’s good for the nation’s health.

While the Obama Administration has laudably and consistently shown its willingness to deal with Republican Governors on Medicaid expansion, it definitely isn’t writing blank checks.  PA applied for 29 different statutory waivers for its expansion program and was awarded 5.  AR and IA got tough-love deals from CMS too.  This next cabal of RedGovs will need to show similar willingness to compromise — imagine that — to get their Medicaid expansion visions realized.

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