What Happens to the Medicaid Expansion?

The expansion of medicaid is how a huge number of the uninsured will be getting their care in the ACA. With that, the supreme court ruling may have thrown a major wrench in the ability to pull that off. David Dayen:

As I explained yesterday, the part of the ruling around the Medicaid expansion, where 7 justices agreed that this was basically a new program, and existing Medicaid funds could not be taken back by the federal government if states declined to comply, has the most near-term consequences for health care itself. Given that Medicaid expansion created half of the coverage increases in the bill, this offered half of the states the opportunity to really take an axe to the program by simply refusing to expand their Medicaid programs. And it leaves the poor between around 50% and 133% of the poverty line in a real no man’s land, because they would both be ineligible for Medicaid AND the coverage subsidies in the exchanges (and ineligible for the mandate, but that just puts them in the status quo, which is terrible).

This has been dismissed by the Democratic establishment as implausible. But it’s such a good deal for those states, they say. But everyone’s in Medicaid now, they say.

. . .

It’s true that it’s a very good deal for states. As Pelosi says, the first three years is basically free, and after that the state only has to pick up less than 10% of the costs. In the example of Texas, by 2019, the state will have spent a mere $2.6 billion on the expansion, while the federal government will have shelled out $52.5 billion. And Pelosi even hinted that the feds could pick up more of that cost (which sounds close to federalizing Medicaid, which is really the killer app here).

Furthermore, looking to history, Medicaid itself was created in 1965. It remains a voluntary program, and Arizona held out for 17 years, until 1982, becoming the last to create their own program for their state. So if all states, including the red states, have Medicaid now, doesn’t that suggest all states will take the expansion over time?

Perhaps. But Pelosi’s response strikes me as the typical Democratic dismissal of conservative ideological intransigence. This is a far more conservative era than 1965. These state governors are well to the right of the crop that held out in Arizona. And Obamacare is seen as the devil’s handiwork. I’d argue that these governors are ideologically far to the right of even 2009, when all of them took stimulus money eventually. The resisters just paid lip service and eventually took the funds. But there wasn’t a Tea Party to pressure them to the right on these grounds. Scott Walker and Rick Scott and John Kasich came right into office and denied the high speed rail funds for Wisconsin and Florida and Ohio, for example. That’s the crop we’re talking about.

There is no way to know for sure, but I agree with Dayen's prediction here. To me, the high speed rail is a perfect example. That was a free gift to those states that they could not afford on their own and do wonders for economic productivity in the long run. And they turned it down. They actively made their states shittier places to take a stand against insanely popular high speed rail. Why would they turn down a chance to make their state shittier and take a principled stand against a law that is unpopular in the abstract?

This is a different breed of asshole governor. I tend to expect the worst from them, and so far I haven't been proven wrong. I also hope that all the Democrats that are so confident about these states opting in to the medicaid expansion have a damn good plan B, because they're going to need it.