Some GOP states want to abandon Medicaid expansion

JEFFERSON CITY, Mo. – Republicans in at least four states want to abandon an expansion of Medicaid in President Barack Obama's health care overhaul, and more than a dozen other states are considering it in the wake of the Supreme Court decision removing the threat of federal penalties.

The high court upheld most of Obama's law, but the justices said the federal government could not take away states' existing federal Medicaid dollars if they refused to widen eligibility to include adults who are only slightly above the poverty line. Some Republican governors and lawmakers quickly declared that they would not carry out the expansion.

The states considering whether to withdraw from the expansion include presidential battlegrounds Florida, Ohio, Pennsylvania and Colorado.

"One thing is clear, state legislatures will play a big role in the future of Obamacare," said Republican state Rep. Todd Richardson of Missouri.

For elected officials, the high court decision presented a stark choice: agree to accept an ambitious expansion of Medicaid or leave behind a vast pile of federal money that could provide health care to millions of poor constituents.

The law signed by Obama in 2010 was projected to provide coverage to more than 30 million Americans, reducing by more than half the number of uninsured people. Of those, about 17 million were supposed to be added to Medicaid, the joint federal and state health care program for the poor. The rest were to be covered by a strengthened and subsidized private insurance market.

The federal government agreed to pay the full tab for the Medicaid expansion when it begins in 2014. But after three years, states must pay a gradually increasing share that tops out at 10 percent of the cost. That may not sound like much, but it translates to a commitment of billions of dollars at a time when many local officials are still anxious about the slow economic recovery.

In Texas alone, where one quarter of the population is uninsured, the Medicaid expansion is projected to provide coverage to 2 million people in the first two years alone. Over a decade, the Texas Health and Human Services Commission estimates the expansion would cost the state an estimated $27 billion. Lawmakers will weigh their options when they return to work in 2013.

But other states aren't waiting to announce their intentions.

Mississippi, which is one of the poorest states in the nation and has more than 640,000 people on Medicaid, could cover an additional 400,000 people if it chose to expand Medicaid. But doing so would cost about $1.7 billion over 10 years and force deep cuts to education and transportation, state officials said.

"Mississippi taxpayers simply cannot afford that cost, so our state is not inclined to drastically expand Medicaid," Republican Lt. Gov. Tate Reeves said.

Republican Nebraska Gov. Dave Heineman promised to block any effort to expand Medicaid, which he said would require tax increases or education cuts. And Indiana Senate President Pro Tem David Long, also a Republican, asserted that his state "will certainly" opt out of the Medicaid expansion.

The expansion was also quickly nixed by GOP legislative leaders in Missouri, where 255,000 of the state's roughly 835,000 uninsured residents stood to be added to the program. In 2005, Missouri slashed its Medicaid eligibility for parents to the lowest levels allowed by the federal government in order to help balance the budget. The expansion in Obama's health care law would restore coverage to those people and add many more. The cost: $2 billion annually, of which Missouri would pay about $100 million beginning in 2017, with its share rising above $150 million by 2019.

"The federal government always does this — they put something out there that looks good on the front end, but on the back end the states have to figure out how to pay for this," said Missouri House Majority Leader Tim Jones, a Republican. "In this current economic time, we're not going to consider going down that path."

In states that reject the Medicaid expansion, some lower-income residents who work could find themselves in a coverage gap between the extremely poor and the middle class. The health care law offers tax breaks to offset the cost of private insurance purchased through new online marketplaces for those whose incomes are above the poverty level. But there are no breaks for many others who earn below the poverty level but still aren't considered poor enough to receive Medicaid. The law assumed they would be covered by an expanded Medicaid program.

Bunnie Gronborg, 64, of Festus, Mo., said she has two sons in their 30s who are single fathers who lost construction jobs and now lack health insurance. She had hoped they could be covered by the Medicaid expansion, and she doesn't buy the explanation that the state cannot afford it.

"There's absolutely no reason" to reject the expansion, "except being vindictive and playing political games with people's actual health care," Gronborg said.

Some states have already expanded Medicaid eligibility beyond the standard set in the federal health care law. Others are forging ahead with plans to do so after the Supreme Court ruling.

Minnesota, for example, has already begun drawing more federal money to expand its Medicaid program ahead of schedule. Officials in Connecticut, Iowa, Arkansas and elsewhere said they will move forward with plans to raise their Medicaid income eligibility thresholds, citing the chance to cover hundreds of thousands of additional people with the lion's share of the cost coming for the federal government.

In New Mexico, Republican Gov. Susana Martinez has supported increased state money for Medicaid since taking office last year, though she hasn't decided whether to back the federal expansion to 133 percent of the federal poverty level — an amount equivalent to $14,856 annually for an individual or $30,657 for a family of four. The expansion would add 170,000 people to the state's Medicaid rolls, reducing the number of uninsured New Mexico residents by almost 40 percent.

"I think New Mexico would be foolish not to expand its Medicaid program," said state Sen. Dede Feldman, a Democrat, who is chairwoman of a legislative study committee that deals with health care.

Despite the reluctance of some state officials to embrace the Medicaid expansion, history suggests that the federal government's financial carrot can be a powerful incentive. When the federal government offered enhanced payments to expand health coverage for children in the 1990s, all states eventually implemented the program, said Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation, a nonpartisan informational clearinghouse.

Now states have an even higher-stakes offer to expand coverage for adults.

Even in Florida, which took a leading role in fighting the health care overhaul, officials have not ruled out participating, although Gov. Rick Scott said it is unlikely. Other states are biding their time, too.

"The federal government is putting a lot of money on the table," Tolbert said. "It may be difficult for states to walk away from that money while simultaneously leaving their lowest income residents uninsured."

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Associated Press writers Chris Blank in Jefferson City; Jamie Stengle in Dallas; Emily Wagster Pettus in Jackson, Miss.; Grant Schulte in Lincoln, Neb.; Charles Wilson in Indianapolis; David Pitt in Des Moines, Iowa; Chuck Bartels in Little Rock, Ark.; Susan Haigh in Hartford, Conn.; Barry Massey in Sante Fe, N.M.; Marc Levy in Harrisburg, Pa.; Gary Fineout in Tallahassee, Fla.; and John Seewer in Toledo, Ohio, contributed to this report.