More GOP States Could Follow Pennsylvania in Medicaid Expansion

Pennsylvania’s announcement last week that it will expand Medicaid eligibility could hearken a wave of Republican-led states agreeing to a signature facet of President Obama’s healthcare law.

The Centers for Medicare and Medicaid Services (CMS) approved a deal last week with Gov. Tom Corbett to expand Medicaid coverage and bring health insurance to an estimated 500,000 uninsured Pennsylvanians. The plan was described as a compromise because it enlists private insurers to help close the coverage gap.

With the agreement, Pennsylvania became the 28th state (including the District of Columbia) to approve a Medicaid expansion plan since the Affordable Care Act was signed into law in 2010.

CMS Administrator Marilyn Tavenner said the Obama administration is “committed to supporting state flexibility and working with states on innovative solutions that work within the confines of the law to expand Medicaid to low-income individuals. But, unfortunately, millions of Americans are still without Medicaid coverage because their state has yet to act.”

Adoption of the expansion plan has tended to fall along party lines. More than two-thirds of the states with approved Medicaid expansion plans have Democratic governors. Only 9 states with GOP governors have signed up.

That could soon change. Indiana has a pending application before CMS to expand its Medicaid services, and Utah is also in negotiations with the Obama administration over an alternate Medicaid expansion plan.

Tennessee’s Republican governor, Bill Haslam, has said he plans to submit an expansion application this fall.

The Associated Press reported in August that Wyoming’s governor is also preparing to submit an expansion proposal in the coming months.

Two years ago, the US Supreme Court gave states the right to opt out of Medicaid expansion, ruling that mandating expansion was unconstitutional. However, states that decline to expand their Medicaid programs lose millions in federal funding. The federal government has pledged to pay 100% of the expansion costs during the first 3 years of the expansion. The federal share will gradually decrease to 90% by 2020.

Republicans, meanwhile, have pushed for changes to the federal expansion template. Corbett, for instance, proposed a requirement that newly eligible Medicaid recipients actively seek work during their coverage period. The requirement didn’t survive to the final agreement, though the plan does offer incentives for enrollees who actively seek work.

Other governors, such as New Jersey Gov. Chris Christie, have expanded Medicaid even as they expressed skepticism about the longevity of the federal funding. When Christie announced New Jersey’s expansion last year, he warned the state would reverse course if the federal government reneged on its funding promises.