Published by POLITICO
By J. LESTER FEDER AND JASON MILLMAN
The Supreme Court ruling left the Democratic health care law intact — but it also left Republican in a stronger bargaining position when it comes to Medicaid.
The ruling gives them the right to opt out of the Medicaid expansion envisioned under the law. But they know one thing: President Barack Obama wants them to stay in, and so many might just go along and take the money — after they’ve squeezed out as many other concessions as they can get from the feds.
One of the most health care-savvy governors, Louisiana’s Bobby Jindal, is already wondering whether this creates a backdoor way to achieve the Holy Grail for Republican governors — turning his federal Medicaid dollars into a block grant.
“I believe [the feds] can go to the states and negotiate” to convert their Medicaid dollars into unrestricted lump payments “for states that want to do this,” Jindal said Friday in a call with reporters.
There’s a long road to get from Thursday’s ruling to serious negotiations, of course.
Several governors immediately responded to the ruling by hinting they won’t expand their Medicaid program — though most have been careful to leave themselves an out in case they decide it’s to their advantage.
“I would resist any expansion of Medicaid that could result in significant tax increases or dramatic cuts to education, public safety and job creation,” Mississippi Gov. Phil Bryant said in a statement.
Even Texas Gov. Rick Perry isn’t saying “never” to a Medicaid expansion. “The governor’s office will be working with Attorney General Abbott and appropriate state agencies to determine the impact of yesterday’s Supreme Court decision on the state of Texas, and the appropriate course of action moving forward,” Perry spokesman Josh Havens said in an email. “Gov. Perry will stand up and do what is right for Texas, based on the priorities of fiscal responsibility and the best interests of Texas taxpayers.”
Of course, there’s a lot of political pressure on Republicans to take advantage of a court-sanctioned escape from a major health reform provision.
Republicans on Capitol Hill are sending signals to their governors that they should use it if they know what’s good for them.
“The more states that would do that, I think the better,” said Florida Rep. Tom Rooney. “Anything that a state can do to try to water [health reform] down, the better.”
But if Republicans don’t sweep Washington in the fall and manage to repeal the health care law, governors could have very different pressures weighing on them when budget time comes around.
That’s why many experts believe that states could still come to the table. And digging in their heels now may actually strengthen their bargaining position when negotiations begin.
“You have two sets of calculus, the fiscal calculus and the political calculus,” said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured. Bypassing expansion not only means leaving “money on the table,” she said — it also means the states would have to pay the price tag for leaving millions uninsured.
The federal government will pick up all of the extra costs of insuring everyone who joins Medicaid under the expansion, at first, and then phase down to covering 90 percent of the costs. Under the health reform law, the program — now targeted at poor kids and the low-income disabled — will cover everyone under 133 percent of the federal poverty line starting in 2014.