Republican governors seek presidential pow-wow on Medicaid expansion

Eleven Republican governors sent a letter to President Barack Obama Thursday requesting a meeting to discuss the details and costs associated with Medicaid expansion as outlined in the Affordable Care Act.

The request, sent by new Republican Governors Association (RGA) chairman Louisiana Gov. Bobby Jindal, comes just three days after all 50 state governors received a letter from Health and Human Services Secretary Kathleen Sebelius, which established that partial Medicaid expansion would not qualify states for the 100 percent federal funding detailed in the health reform.

States that signed on to the letter include: Florida, Iowa, Utah, Maine, Virginia, Ohio, South Dakota, Wyoming, Arizona, Louisiana and Mississippi.

The meeting request is the second made by Republican governors this month and comes amid rising tensions from the group who maintain that the Administration has largely let their requests for more information or flexibility on how they run their Medicaid program fall on deaf ears.

“We regret that we have not heard from you regarding our pending meeting request,” Jindal wrote on behalf of the governors. “In the wake of Secretary Sebelius’s letter, it is clear that a meeting to discuss the future of Medicaid is more important than ever.”

Of primary concern to the governors are the additional costs of expanding Medicaid to include people up to 133 of the federal poverty limit. The federal government has committed to pay for 100 percent of the costs of the newly eligible for the first three years of the program, and then gradually reduce that to 90 percent by 2020.

But the governors are more concerned with the so-called “woodwork effect,” which predicts that with a concerted push to enroll the newly eligible into the Medicaid program, a large swath of uninsured people already eligible under the old rules will flood into state programs – and that these newly insured will only be funded at the current federal Medicaid match, not 100 percent.

In a much-cited 2010 study published in the New England Journal of Medicine by Harvard researchers Benjamin Sommers and Arnold Epstein, it is estimated that as many as 9 million Americans already eligible under the old Medicaid rules aren’t enrolled in the program. And while it is not anticipated that a great number of these people will newly enroll, states such as Florida and Texas, where less than 50 percent of those eligible under current rules are enrolled in Medicaid, may have greater exposure than other states.

As Sommers and Epstein noted: “Although only a portion of these people are likely to enroll in Medicaid … adding them to the program’s rolls would nonetheless cost states billions of dollars in increased spending. Most affected would be states that currently have generous eligibility criteria for Medicaid, lower participation rates, a higher prevalence of low-income uninsured residents or some combination of these factors.”

But other studies of the potential budgetary effects to states of Medicaid expansion have not painted this as a particularly costly problem. A recent study by the Kaiser Commission on Medicaid and the Uninsured contends that increases in state spending for Medicaid as a result of the expansion as envisioned in the ACA would increase state Medicaid spending by only 1.4 percent through 2019, or a total of $21.1 billion in addition states funds between 2014 and 2019.

The Center on Budget and Policy Priorities research indicated additional states costs from 2014 to 2022 to be $73 billion, or 7 percent of the total costs to fund the expansion.

But even these figures do not take into account the total net costs to states that choose to expand their insurance program for the poor, which should also factor in the potential reduction of uncompensated care that is currently paid by the states via other programs. An Urban Institute study estimates that state savings for programs paying for uncompensated care will total between $26 and $52 billion from 2014 through 2019 and a separate report from the Lewin Group estimates state and local governments will save as much as $101 billion.