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Governors, lawmakers clash over Medicaid plan

Several GOP states consider federal subsidy

Tennessee’s Republican governor, Bill Haslam, has been criticized for his view that Medicaid expansion is ‘morally and fiscally the right thing to do.’ Associated Press

WASHINGTON — Governors across the political spectrum are hitting a roadblock in their bids to expand Medicaid with federal funds: Republican legislators who adamantly oppose the federal health care law.

While some of these governors themselves have criticized the president’s health care law in general, they have come to see one component — Medicaid expansion — as too generous to reject. But they are battling conservative lawmakers who say it is better to turn down billions of federal dollars than to expand Medicaid under the 2010 Affordable Care Act.

Partisan politics have driven state Medicaid decisions ever since the Supreme Court ruled in 2012 that expansion was optional, not mandatory, under the new law. Within months, every Democratic governor agreed to expand Medicaid (although Republican legislatures blocked a few of those efforts).


Nine states with Republican governors accepted the offer.

Medicaid, the health insurance program for low-income and disabled people, covers about 65 million Americans, more than one in five. The federal government will pay the full expansion cost for the first three years, and gradually reduce the subsidy to 90 percent. That’s more than the past federal Medicaid match to states.

The law expanded Medicaid eligibility to adults with annual incomes up to 138 percent of the federal poverty level; the change qualifies an individual making less than $16,105, and a family of four earning less than $32,913.

So far, 27 states have agreed to expand Medicaid. But several more, including some with GOP governors, now want in. These governors note that their residents pay the federal taxes that fund expansions, so declining to participate amounts to subsidizing other states without receiving benefits.

Several Republican governors and one independent are meeting Republican legislative resistance to their expansion proposals. Some have tried to woo conservatives by adding ‘‘free enterprise’’ provisions, which require federal approval.


Perhaps the most aggressive GOP governor is Bill Haslam of Tennessee, who won reelection this fall. He now says Medicaid expansion is ‘‘morally and fiscally the right thing to do.’’

Haslam told the Chattanooga Times Free Press that nearly every elected Republican in his state ‘‘has run sometime in the last four years saying, ‘I think Obamacare is really bad.’ ’’ He said his plan ‘‘is not Obamacare.’’ Among other changes, it would offer vouchers to newly eligible adults to help pay for employer-sponsored coverage, and would require copayments for treatment.

Some top Republican lawmakers have praised Haslam’s idea. But others vow to fight it, calling the governor’s tweaks meaningless. State Senator Brian Kelsey says Tennessee voters elected Republicans to shrink government, not expand it.

In Wyoming, Governor Matt Mead opposed Medicaid expansion during his first term, but now says it would save the state money and provide needed insurance to poor people.

A committee in Wyoming’s GOP-controlled Legislature created uncertainty, however, by endorsing a different version.

It is modeled on an Indiana plan that would require new Medicaid recipients to pay into a fund similar to a health savings account.

Federal officials have not approved the Indiana plan, which is backed by Republican Governor Mike Pence.

Alaska’s independent governor-elect, Bill Walker, and North Carolina’s Republican Governor Pat McCrory also face serious GOP legislative opposition to their ideas for expanding Medicaid. Virginia’s GOP-controlled Legislature has thwarted Democratic Governor Terry McAuliffe’s repeated expansion efforts.

Arkansas could become the first state to rescind a decision to expand Medicaid.


Democratic Governor Mike Beebe, who stepped aside this fall under the state’s term limits, negotiated a modified expansion plan with the Republican-controlled Legislature. But Republicans made dramatic gains in the November elections, and some Arkansas legislators want to undo the decision.

The state’s Republican governor-elect, Asa Hutchinson, has yet to announce his position, which could prove crucial.

Matt Bennett of the centrist-Democratic group Third Way says governors are often more pragmatic than legislators.

‘‘Becoming the chief executive of basically anything tends to have a moderating influence on people,’’ Bennett said. Governors must represent entire states and balance budgets, he said, ‘‘so when someone offers you a lot of money,’’ it’s hard to reject.

That’s what several Republican governors said when they agreed to expand Medicaid despite their party’s aversion to ‘‘Obamacare.’’ Nevada Governor Brian Sandoval told a newspaper editorial board, ‘‘I couldn’t sit here and defend to any of you $16 million that just went away because of ‘principle.’ ’’