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Don’t Be Fooled by New Nomenclature of Medicaid Expansion


This week, Tennessee Governor Bill Haslam announced his proposal for a “Medicaid expansion alternative” that would expand the program to nearly 200,000 currently ineligible individuals in the state. Also called a “hybrid plan,” Haslam’s version of expansion would provide Medicaid-funded vouchers to be used for premiums and other expenses for employed individuals making less than 138% of the federal poverty level (the level set by traditional expansion requirements). In 2013, Haslam announced that he would not expand Tennessee’s Medicaid program under the Affordable Care Act (ACA), but that he would seek to “leverage” available federal money to provide private health insurance for individuals without coverage. So far, other states have experienced little success in their attempts at “state controlled” expansion.

The Arkansas and Pennsylvania models of Medicaid expansion have been heralded as roadmaps for other states, particularly Republican-led, looking to expand while simultaneously characterizing Obamacare expansion as a bad idea. These two states now provide the best test cases for the kind of abysmal results that can be expected under plans for so-called state controlled Medicaid expansion.

Arkansas Governor Beebe received approval to expand Medicaid through waivers allowing Medicaid dollars to go toward the purchase of private insurance for those falling below 133% of the federal poverty line.  In the agreement, the federal government imposed a per-person cap on the cost whereby anything beyond a certain amount would be paid for by the state (taxpayers). Shortly after implementation, the plan’s cost went well over the limit and the state was left asking for a raise in the caps due to difficulties encountered in predicting the cost. A September 2014 report by the Government Accountability Office found that Arkansas’s cost assumptions were so far off that the plan would cost the federal government nearly $800 million more than traditional expansion. Even though Arkansas’s private option expansion has proven to be a failure, it is still being hailed as a worthy blueprint by some Republican governors seeking a way out of their commitments to reject new federal money for Medicaid.

In Pennsylvania, Governor Tom Corbett also pushed his “Healthy PA Plan” as an “alternative” to Medicaid expansion under the ACA. The plan is expected to expand Medicaid to over 500,000 uninsured individuals, but it is considered an alternative because, much like Arkansas’s plan, federal Medicaid money would be used to provide private health insurance to beneficiaries. The plan “created in Pennsylvania, for Pennsylvania” was supposed to contain tougher premium requirements, but the approved plan contained even less stringent requirements than those already in place. Corbett also touted his plan’s job search requirements for enrollees which never made it into the final waiver approved by the federal government.

Republican Governors and legislators who have repeatedly laid out principled cases against Medicaid expansion should not be permitted to repackage expansion under new nomenclature. Is the system suddenly less broken than it was when initial campaign promises were made? Are we to believe that it’s wrong to accept traditional Medicaid expansion on grounds that it increases our dangerously high national debt, but that it is okay to accept the same federal dollars for the same purpose using different terminology? Is the misguided practice of increasing Medicaid’s exorbitant enrollment more palatable if a state seeks a few alterations to the plan, most of which are ultimately denied? The same people who told us that federal money never comes without strings attached are now trying to convince us that we will suddenly be given some kind of genuine authority over how this new Medicaid money is spent.

Republican Governors and legislators who have repeatedly laid out principled cases against Medicaid expansion should not be permitted to repackage expansion under new nomenclature.

After following the implementation of the Arkansas and Pennsylvania plans in-depth, Josh Archambault of Forbes reached the following conclusion: “[t]he Obama Administration used to give lip service to Republicans’ so-called alternatives that they were not Medicaid expansion. Now, they don’t even bother pretending these GOP-designed proposals are anything other than straight expansion.” Archambault cites a statement released by the federal Medicaid agency deeming Pennsylvania the “28th State to expand Medicaid under the Affordable Care Act.”  Incredibly, even in the face of this blowback, some “conservative” governors and legislators are trying to persuade us that expanding Medicaid (using different words) through waivers is independent from the Affordable Care Act and that this concept is somehow based in “conservative principles” and even “free market” ideals.

We should not be fooled. These state-sponsored alternatives are merely a backdoor approach to Medicaid expansion as introduced in the Affordable Care Act. Such plans are costly, unsustainable, inflexible, and most of all, not free.

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