The Medicaid expansion is a really great deal

I wrote the following last summer, when discussing why it will be hard for states to turn down the Medicaid expansion:

  1. This is a pretty good deal for states. They’re getting most of the tab picked up by the feds.
  2. It’s one thing to turn down high speed rail. It’s another to tell your constituents that they can’t have insurance entirely paid for by the federal government in 2014.
  3. As more and more states take the money, those that don’t will be more easily marginalized.
  4. History. States threatened not to join Medicaid the first time as well. All did, eventually. Now the program is so American that threatening to remove it is “coercive”.
  5. There will be enormous pressure from doctors, hospitals,pharma, etc. who potentially will lose a lot of money in uncompensated care. They have pretty good lobbying groups.

Recently, Gov. Brewer of Arizona decided to accept the expansion, citing a number of the reasons above. Yesterday, Gov. Kasich of Ohio did the same:

Kasich says the decision will free up money to spend on mental health and other services — since the feds will pay for most of the expansion costs — and will keep everyone else’s health insurance premiums down because there won’t be so many uninsured people going to emergency rooms for their medical care.

He’ll get a ton of money to do it — the federal government will pick up all of the costs of the newly eligible people for the first three years, and then slowly scale that back to 90 percent of the costs.

Kasich also said he had gotten assurances from White House senior adviser Valerie Jarrett that the Obama administration might be willing to give Ohio some special flexibility for doing the Medicaid expansion, like letting the newly insured people get their coverage through the law’s health insurance exchange rather than through Medicaid.

And local health care and business leaders have been pushing Kasich to do it. They say Ohio will save money in the long run and that it makes business sense to do it so community hospitals aren’t forced to close.

As I said before, I think you’re going to see more and more of this. It’s a great deal for states. As more Republican governors make that argument, it’s going to get harder for others to refute it.


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