Reality: Red State Option Edition

More than half of the states challenged the ACA in various suits; they ultimately prevailed only in finding the Medicaid expansion unconstitutionally coercive. Justice Roberts’ opinion made the Medicaid adult expansion to 138% FPL optional on a state-by-state basis (the Red State Option).

Yesterday, Arizona’s Governor stopped pointing her finger and joined the Medicaid expansion. Pundits expressed shock, but no one should be surprised. Most of the plaintiff states will ultimately follow suit, for two reasons: politics & money. First, in most counties, the local hospital is one of the largest employers and these hospitals want the Medicaid expansion. The political pressure will be intense, well-connected, and local. Second, the federal match rate is indeed generous. It is hard to justify turning down such largess. But as the plaintiff states jump on ship voluntarily, it undermines their prior claims of unconstitutional coercion.

Meanwhile, in Oklahoma, the Governor is sticking to her guns.  200,000 Oklahomans will lose (or fail to obtain) coverage as a result. The state authorized $500,000 for a consultant to study options to cover these people. Will the report recommend the expansion?


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