The conservative Medicaid charade

The New York Times had a good piece last week detailing the still-fraught politics of expanding Medicaid in Red States.  To sum up, while some conservative governors like Mike Pence of Indiana and Bill Haslam of Tennessee are coming around to ObamaCare’s Medicaid expansion, conservative state legislators are still vehemently opposed, and are shooting down carefully crafted expansion plans that their governors had painstakingly negotiated with the Obama administration.

It’s remarkable that the anti-ObamaCare fever still hasn’t ebbed in state legislatures.  But what’s more interesting are the evolving pre-textual arguments that conservatives use to justify opposition to embracing the Medicaid expansion.  Remember, ObamaCare offers the states incredibly favorable terms to expand Medicaid to cover more of the poor and near-poor.  The federal government picks up 100 percent of the costs in the early years of the expansion, and will cover at least 90 percent of the costs forever.

Yet conservatives continue to insist that the federal government won’t meet its obligations.  According to the Times, “Opponents in [Tennessee and Wyoming] said that, among other things, they did not believe the federal government would keep its promise of paying at least 90 percent of the cost of expanding the program. It currently pays the full cost, but the law reduces the federal share to 90 percent — a permanent obligation, it says — by 2020.”

I’ve explained before why this argument is hollow.  The federal government has never made permanent cuts to funding for state Medicaid programs.  Cutting federal funding for the Medicaid expansion would require a change in the law — a change that could only conceivably be enacted by conservatives in Washington.

So this justification is weak to begin with.  But in Tennessee, Governor Haslam called conservative legislators’ bluff with a creative insurance policy: “He had traveled the state to promote [his plan] — and to try to persuade people that it was not part and parcel of the Affordable Care Act, partly because the Tennessee Hospital Association had agreed to pay any expansion costs beyond what the federal government covered.”

Hospitals, of course, are losing eye-popping sums of money in states that have refused to expand Medicaid.  The Urban Institute calculated that hospitals in these states are missing out on some $168 million in reimbursement revenue.  That’s why it’s worth it for Tennessee hospitals to agree to be a last-resort backstop to allay conservative fears that the federal government will bail on its Medicaid guarantees.

Yet even with this guarantee from their hospital sector — and a practical plea to take this incredibly good deal — conservatives in Tennessee stuck to their guns and torpedoed Governor Haslam’s plan.  “Less than 48 hours later,” the Times writes, “his plan was dead after a Senate committee dominated by Republicans rejected it before it could reach the full chamber.”

So why are conservatives still so opposed to expanding Medicaid?  Keep in mind how far to the right the terms of the expansion have shifted from the original uniform expansion called for by the Affordable Care Act.  The Supreme Court opened up the Red State option in 2012, making the expansion voluntary for the states.  This gave conservatives states ample newfound leverage to drive a hard bargain with the Obama administration and to adopt a version of Medicaid on more conservative terms.  In states like Arkansas, Indiana, and Tennessee, the Obama administration has agreed to state proposals to use Medicaid funds to put individuals on private insurance, and even to charge covered individuals small premiums.  It’s a far cry from the original plan, which simply called for an expansion of traditional, single-payer Medicaid.

Yet despite policy concessions from the Obama administration, generous funding terms, and backstop funding by the private sector, conservatives in state government are still holding out.  One Wyoming state senator previewed the revised iteration of the argument against expanding Medicaid: “The argument is that the federal government is already in debt and expanding Medicaid will make it worse,” he said.

This is dumbfounding.  Medicaid is a cooperative federalism scheme, jointly funded by the state and federal governments.  In the warped federalism of this Wyoming senator, the states now have veto power to second-guess Congress’s own budgetary determinations.  Because a state senator from Wyoming somehow knows better than federal legislators what the federal government can afford to spend.

Of course, there’s little reason to engage with the merits of these arguments.  The arguments are hollow, and conservatives barely bother to pretend otherwise.  State level conservatives are simply doing the bidding of their ideological benefactors, the Times notes.  “Tennessee’s chapter of Americans for Prosperity, the Tea Party-affiliated group backed by Charles G. and David H. Koch, and the Beacon Center of Tennessee, a Nashville nonprofit that advocates smaller government, urged the Legislature to scuttle the governor’s plan.”

And scuttle it they did.  Once you cut through the spurious publicly-offered reasons, the real source of conservative opposition to these negotiated plans is straight ideological: that government should be minuscule, and shouldn’t be in the business of guaranteeing healthcare for the poor.  As the Obama administration has learned over and over again, it’s impossible to successfully negotiate with people who oppose government’s basic existence.

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