It always boils down to the money, doesn't it?

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In a switch, GOP governors back expanding Medicaid
By Thomas Beaumont, February 8, 2013

Once largely united in resisting the Obama administration's new health care overhaul, a growing number of Republican governors are now buying into parts of the system as the financial realities of their states' medical costs begin to counterbalance the fierce election politics of the issue.

This week, Michigan's Rick Snyder became the sixth GOP governor to propose expanding his state's health insurance program to cover more low-income residents, in line with the Democratic administration's strong recommendation. Eleven Republican governors have rejected the idea while a dozen, who have been mostly critical, have not announced a decision.

Although the Democratic president's re-election last fall cleared the way for providing health insurance for millions of Americans who don't have it, many Republican governors have resisted parts of the plan that remained optional. They have been reluctant to expand their Medicaid programs to cover more low-income residents. And many declined to take responsibility for the online exchanges that would offer subsidized private coverage to the middle class.

Both would pose costs to the states and also involved cooperating with a larger government role in health care that many Republicans strongly opposed.

However, the federal government's agreement to pay most of the added Medicaid expense, and belief that fewer residents would be showing up at local hospitals without insurance, have begun to break down some governors' opposition.

"Politically, the dynamic may be shifting," said Matt Benson, a senior aide to Arizona Republican Gov. Jan Brewer, who proposed expanding Medicaid last month. "There may be some folks looking at this anew."

Two high-profile Republican governors, Scott Walker of Wisconsin and Rick Scott of Florida, have voiced skepticism about the federal terms but are still considering the option.

Most Democratic governors have supported expanding their Medicaid programs to cover more low-income residents, mainly adults with no children at home, who don't qualify now. With such an expansion, Medicaid would account for almost all of the state's poor. Under the new federal plan, higher earners would be required to get private insurance. Together, the provisions are aimed at sharply reducing the 15% of Americans who are uninsured.

But many Republican governors shrank from taking on any further costs for Medicaid, which has heavily burdened state budgets. The federal government would pay the full cost for the first three years under the new system, but the states would pay up to 10 percent later. Some governors worried that the federal government could decide to trim back its contribution in the future.

The governors now agreeing to opt in and expand Medicaid include Republicans from different regions of the country and different ideological leanings. This has prompted hope among some health care overhaul supporters of more GOP defections. In addition to Snyder and Brewer, Republican governors who support expanding Medicaid include Jack Dalrymple of North Dakota, John Kasich of Ohio, Brian Sandoval of Nevada and Susana Martinez of New Mexico.

In each state, the proposal must still be approved by the legislature, where there is still Republican opposition.

Snyder said that in Michigan, the expansion would provide coverage for about 500,000 uninsured residents, mostly at federal expense, and save state taxpayers $1.2 billion through 2020. The government now helps hospitals cover some of the cost of treating those without insurance.

"This is a federal program that we would not have necessarily created for Michigan," he said Wednesday, but "this is saving money and improving lives."

Governors have been under immense pressure to opt in from hospital and medical associations, as well as advocates for the poor.

In explaining their decisions, Kasich, Brewer and others have said rejecting an expansion would mean their taxpayers would subsidize care for those in other states, while receiving no benefits themselves. In Ohio, that would be an estimated $2.4 billion over two years, Kasich said Monday.

"Ohio taxpayer dollars are coming back to Ohio to support a significant need we have," he said.

But governors elsewhere said they fear the states would be saddled with huge costs if the federal government later reneged on its commitment.

"The federal government, because of their budget problems, starts cutting back and...then you've just bought into something of a lead sinker," said Iowa Gov. Terry Branstad, among the skeptics. He has asked federal officials to allow his state to craft its own plan for low-income residents.

Virginia Gov. Bob McDonnell has also questioned the terms, saying he didn't "believe the federal government can possibly deliver its commitment to fully fund the program."

Twenty four states have agreed to participate in another optional part of the federal health plan _setting up an online marketplace, either by themselves or in partnership with the federal government, where residents can shop for subsidized insurance coverage. The group includes seven GOP-governed states. Under the new system, the federal government will set up the online marketplaces, or exchanges, for states that decline to do so. The new exchanges are scheduled to go into operation in October, with insurance coverage beginning in January 2014.
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