By Kelly Kennedy
WASHINGTON - A series of new reports and a push by a new governor show the continued pressure to expand Medicaid in the 25 states that have so far resisted changes in the federal-state program to provide health care to low-income Americans.
States that opposed expansion because they believed they could not afford it are also finding that their Medicaid rolls are growing anyway, as the opening of the federal health care exchanges Oct. 1 started a new surge of enrollment for those eligible for coverage under the current program.
A report released Wednesday by the Department of Health and Human Services showed that 6.3 million people have joined Medicaid or the Children's Health Insurance Program since Oct. 1.
Slightly more than 1 million people enrolled in Medicaid or CHIP in states that did not expand Medicaid, the report showed. In Texas, 382,276 people enrolled in the two programs since Oct. 1; in Florida, 243,314 people did.
So far, the District of Columbia and 25 states have expanded, even those dominated by Republicans who opposed the law and the Obama administration's implementation of it. In other holdout states, such as Virginia, political pressure is building for expansion, as a new report showed the state could save $1 billion through 2022 by expanding the program.
Newly sworn-in Virginia Gov. Terry McAuliffe, a Democrat, made expansion a key part of his campaign last year and this week said he would seek a way around the state Legislature, which has a Republican-led House and a Democrat-led Senate, to expand the program if need be.
Along with the Virginia study, conducted by the Department of Medical Assistance Services, which oversees the Medicaid program in Virginia, other reports by universities and non-partisan groups have spelled out the financial advantages for expansion in states that have not done so. For example:
• A study released this week by the Jackson Hewitt tax service group concluded that not expanding Medicaid will hurt companies with 50 or more full-time employees. Those employers, the study said, will have to pay "shared responsibility" tax penalties because they'll either have to cover the insurance of their employees, or pay a fine if their employees receive a subsidy through the federal or state exchanges.
That fee is up to $3,000 per employee. Brian Haile, Jackson Hewitt's senior vice president for health policy, said employers could pay from $1 billion to $1.55 billion every year in the 25 states that haven't expanded Medicaid by 2015, when the penalties begin.
In Texas, that means $266 to $399 million each year, while in Pennsylvania, that means $52 to $77 million each year, Haile found.
• Two studies published in the journalHealth Affairsthis month found that Medicaid expansion would happen slowly; that the previously eligible probably would be just as likely to enroll because of the federal health exchange as they would if a state expanded; that people would move from private insurance to Medicaid; and that people are unlikely to move from a state that hasn't expanded to a state that has.
Benjamin Sommers, lead author of the reports and assistant professor of health policy and economics at the Harvard School of Public Health, looked at four states that decided to expand Medicaid in 2010.
Opponents of expansion, such as the conservative Heritage Foundation, say Medicaid is already a "failing program" that gives patients less access to health care and poorer outcomes. Sen. Rand Paul, R-Ky., has said expansion will bankrupt small hospitals. In Florida, although Republican Gov. Rick Scott favors expansion, the GOP-controlled Legislature does not, saying they can't trust the federal government to live up to its commitments.
The change is inevitable, said Gail Wilensky, an opponent of the law and the former Medicaid program director under President George H.W. Bush. "I'm actually surprised that so many (states) went into 2014 without doing that," she said.
Expanding Medicaid was a key part of the Affordable Care Act. It would allow people who made between 100% and 138% of the federal poverty level to receive health care that would be 100% paid for by the federal government for four years. After that, the federal share would drop to 90% and the states would have to pay the remaining 10%. But the Supreme Court decision that upheld the law in June 2012 also allowed states to choose to not expand.
"It's not without cause that some states are worried," Wilensky said.
However, states that expand can also decide to reduce them in four years, Wilensky said.
TAXES ALREADY BEING PAID
A major factor driving states to reconsider expanding Medicaid is that their residents are already paying for the expansion but not receiving any of the benefits, said Sean Nicholson, professor of policy analysis and management at Cornell University.
"Your average taxpayer is saving zero dollars by not expanding," Nicholson said. "It seems very difficult for a governor to explain to an educated voter why they're disadvantaging the poorest people in the state - and subsidizing some people who are richer than they are."
The 2012 Supreme Court decision left those who make less than 100% of the federal poverty level, or $23,550 for a family of four, in the position of not qualifying for a subsidy to help pay for insurance on the health exchanges. The Affordable Care Act assumed that people who made less would be covered by the states' expanding Medicaid program. Instead, those who make 101% of the federal poverty level in states like Indiana and North Carolina qualify for a subsidy, while those making less do not.
Beyond the consumers, Nicholson said, the providers - hospitals, doctors and clinics - will be fighting for expansion.
"Florida is turning down $51 billion over 10 years," he said. "Well who would get that? Florida hospitals, Florida providers, Florida home health providers."
Sommers said one fear of states was that people who were previously eligible for Medicaid would enroll in great numbers. This is important because they fall under old Medicaid reimbursement rates of 50% to 70%, rather than the new rate of 100%, he said.
"This is probably going to happen to some extent even if you don't expand Medicaid," Sommers said. Even if a state doesn't expand, there's a lot of publicity around the federal exchange, and anyone who goes looking for insurance will learn whether he's eligible for Medicaid under the old rules.
"We looked for three years at two states," Sommers said of the District of Columbia and California. "We watched month by month, and it was pretty gradual throughout the three years."
Because there's no open-enrollment period for Medicaid, Sommers said people tend to sign up when they need it - often with the help of someone at a health clinic or hospital.
The debate over Medicaid expansion resembles the fight over the program's creation in 1965, said Tim Jost, a Washington and Lee University law professor and health policy expect.
Six states joined Medicaid on the first day, he said, but Arizona "didn't come around until the '80s."