Virginia Should Take the Obamacare Medicaid Expansion Money and So Should All Republican States

In a September 2012 post on this blog, I said that Republican governors should be expanding their Medicaid programs under Obamacare. I argued that Republicans have long called for state block grants and the flexibility to run their own Medicaid programs in what are the state "laboratories of democracy."

I made the point that, given the then recent Supreme Court decision enabling states to opt out of the expansion, the Obama administration would be hard pressed to deny any reasonable proposal from Republican governors. If Republicans really believed in state responsibility and flexibility for how they run their Medicaid programs, this was the opportunity to prove it. (See: The Medicaid Controversy––The Republican Governors Should Put Up or Shut Up)

Since then, a few Republican governors have taken that tack and the Obama administration has been very cooperative and flexible.

This is a good place to recognize outgoing HHS Secretary Sebelius for her leadership by being willing to work with state Republicans in order to get millions of people covered who wouldn't be getting coverage otherwise.

Good faith Republican Medicaid proposals have led to good faith responses from Sebelius' Department of Health and Human Services (HHS) and a few done deals and other deals still in the works.

Many Republicans have said that Medicaid is not sustainable and that the feds could well cut the new Obamacare funding in future years. Sebelius responded by giving these governors an out if funding were to be cut.

Of course Medicaid is unsustainable, that's why the states should be given the autonomy to run their own plans and deal with these challenges in any number of different ways the country can learn from.

Arkansas, a conservative state led by a Democratic governor and a very conservative Republican legislature, was one of the first states to secure a Medicaid waiver from the Obama administration. The Republican legislature just renewed that program.

But in a recent Forbes article, that expansion came under sharp criticism:

Any Governor or legislator still considering a "Private Option" style ObamaCare Medicaid expansion in their state should take an extra-long look, as the Razorback state's version is turning out to be hugely expensive. While the "Private Option" plans are required to look almost exactly the same as Old Medicaid from an enrollee's perspective, the plan does have one big difference from a straight "traditional" ObamaCare expansion: state taxpayers are on the hook for all cost overruns. The trend of enrollment in the first few months project a cost overrun of tens of millions of dollars for 2014 alone, with potential overruns growing larger in the future.

Sounds like a Medicaid block grant success story to me!

Seriously. Yes, Arkansas apparently has some serious problems that need to be fixed. But isn't that what Medicaid block grants are all about––decentralized experimentation, trial, error, and adjustment?

So, what do we know about Medicaid in Arkansas:

1. Arkansas has its own experiment trying to figure out how to deliver better low-income care at a better cost.
2. Because of it, 100,000 people are being covered that wouldn't have been covered without the state and the feds doing a deal.
3. Arkansas got more flexibility and the governor and legislature, not bureaucrats in Washington, DC, are responsible for making it work.
4. Looks like Arkansas is not off to a sterling start.
5. So, Arkansas needs to adjust.
6. And, Arkansas will adjust because they have to.

Nobody said giving the states autonomy would lead to easy successes.

And, let me be clear, I don't know if the private option scheme Arkansas is following is the right course. But, that is what experimentation is about. Other states can and probably should try other things.

I can't figure out what's the matter with all of these reluctant conservatives on the subject of Medicaid expansion. As many as 5 million people don't have health insurance coverage because of their refusal to expand Medicaid––on their own terms.

Republicans want Medicaid block grants but when the Obama administration effectively goes along with the concept by approving a number of special deals the other Republican governors don't make the Obama administration a good faith offer of their own.

And, when a state like Arkansas arguably stumbles out of the gate, they declare state Medicaid autonomy a failure.

Right now, the new Democratic governor of Virginia is in the middle of a big battle with his conservative Republican legislature. He's basically telling his legislature he wants to go to Washington and get a deal to expand Medicaid on Virginia's terms.

But the Republicans are saying, "No."

I know that being anti-Obamacare is a potent election-year issue for Republicans. But every time they get a block grant concession from the Obama administration Republicans could argue they know how to fix America's broken health care system with practical "common sense" and state-based Republican ideas. Why shouldn't this be a winning political strategy for them?

What are they afraid of; the blue states will end up covering more people for less money than red states doing it their way?

So much for 50 state laboratories.

This from the same party that thinks selling insurance across state lines, association health plans, and high risk pools are good common sense ideas.


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