Red states still grasping at Obamacare Medicaid cash

By Jason Hart | Watchdog.org

Several Republican governors are still pursuing the Obamacare Medicaid expansion to bring billions in new federal spending to their states.

Implementing the Obamacare expansion to get “free” federal money increases federal and state and spending, and proposed cuts to the expansion’s Federal Medical Assistance Percentage could dramatically increase the burden on participating states.

Sen. Tom Coburn, R-Okla., and Sen. Richard Burr, R-N.C., introduced a bill in May 2013 meant to warn governors, as Coburn said in a release, “(D)on’t count on the enhanced federal funding for Medicaid expansions, because Congress has overpromised what it cannot deliver.”

Federal taxpayers are footing the bill for all Obamacare expansion benefits through 2016. Starting in 2017, the Obamacare expansion FMAP is set to taper until it reaches 90 percent in 2020. Traditional FMAP rates vary by state, with federal funding for most Medicaid benefits ranging from 50 percent to 74 percent.

Coburn and Burr’s Preventing an Unrealistic Future Medicaid Augmentation Plan Act of 2013 would repeal Obamacare’s enhanced FMAP, the key incentive for states to expand Medicaid to all residents at or below 138 percent of the federal poverty line.

With the federal government $18 trillion in debt excluding unfunded entitlement liabilities and with an incoming Republican majority in Congress, the FMAP for Obamacare’s Medicaid expansion is likely to be cut further and faster than state officials expect.

“Obamacare’s Medicaid expansion took a broken entitlement program and made it worse,” Rachel Hicks, Burr’s press secretary, told Watchdog.org via email. “In contrast, Senator Burr has long argued for the need for sustainable Medicaid reform — reform that empowers states to better meet their patients’ needs.”

“Promising an unsustainable FMAP does nothing to address these underlying issues and will only further strain the program,” Hicks added.

In Burr’s home state, Republican Gov. Pat McCrory is still considering expanding Medicaid under Obamacare. Like all governors, McCrory faces pressure from the legacy press, the hospital lobby and other big-government groups to bring Obamacare money to the state.

Cosponsors of the Preventing an Unrealistic FMAP Act include Sen. Mike Enzi and Sen. John Barrasso, both Wyoming Republicans. Wyoming Gov. Matt Mead — also a Republican — has announced his support for a Medicaid expansion he openly describes as “not a good piece of legislation.”

“Senator Enzi believes Medicaid expansion is a state decision and trusts that those closest to the issue will find the best-possible solution for addressing it,” Enzi press secretary Daniel Head said in an email to Watchdog.org. “The senator will be watching the developments closely.”

In 2012, President Obama proposed shifting $100 billion in Medicaid expansion costs to the states. House Budget Chair Paul Ryan’s latest budget called for repeal of Medicaid expansion, and Senate Republicans reportedly see Medicaid expansion as a part of Obamacare they could repeal with Obama still in the White House.

Even absent changes to Obamacare, the law included a two-year increase in reimbursement rates to Medicaid care providers that ends this month. Reduced Medicaid payments to providers plus a greatly increased pool of Medicaid recipients would further decrease access to care.

Nonetheless, Indiana Gov. Mike Pence awaits the Obama administration’s response on a series of Medicaid waiver requests Pence submitted as part of his proposed Obamacare expansion earlier this year. Pence has indicated he would drop support for Medicaid expansion if his waiver requests are denied.

Utah Gov. Gary Herbert claimed in October his administration had won “more flexibility than has been given to any other state” to expand Medicaid under Obamacare. Herbert continues pressuring the Utah Legislature to back the latest version of his Medicaid expansion plan.

A work group advising Idaho Gov. Butch Otter recommended in August the state expand Medicaid under Obamacare, and Tennessee Gov. Bill Haslam is still considering the expansion, making a total of six Republican governors who may be trying to implement a huge component of Obama’s unpopular 2010 health insurance law this winter.

At Obamacare FMAP rates, the law’s Medicaid expansion would mean billions per year in new state Medicaid costs by 2020. If D.C. politicians reduce what experts have always identified as unsustainable funding, pro-expansion governors will be putting their states on the hook for far more, far sooner.

In Arkansas, cost overruns in a “private option” Obamacare expansion being used as a model in other states contributed to Republican victories in legislative races this November. Lawmakers are expected to attempt to undo the state’s Obamacare expansion within the next several months.