Medicaid Expansion is Risky Business

Both Republicans and Democrats have recently engaged in some risky business by pushing for the Medicaid expansion. They’ve been quick to assure state taxpayers they won’t be left with an enormous bill if federal matching funding deteriorates thanks to “opt-out” protections and cost-saving reforms.

The problem is that there’s nothing in the law that gives states the ability to opt out of Medicaid expansion, even if the federal government doesn’t hold up its end of the deal. All the power is in the hands of HHS Secretary Kathleen Sebelius. In short, expansion is forever, or a “Hotel California,” as Rob Alt over at the Buckeye Institute calls it. States can check-in, but never leave.

Other states have already tried to insert cost-saving reforms with little avail. Maine sought to extend the 100% matching rate beyond 2016, Tennessee tried to increase co-pays, and Indiana is still awaiting an answer on whether their Healthy Indiana Plan can be expanded to meet the Medicaid expansion provisions. In short, the federal government has been quick to squash state reforms.

Even worse, the federal government will not give the commonwealth a straight answer on whether they can opt-out or what reforms will be denied until a proposal is in writing. This is the same tactic used on Arkansas in the midst of their expansion debate. And even if the federal government allowed Pennsylvania to opt-out of an expansion, it would be politically impossible to pull the rug out from under citizens who have come to depend on government health care.

Rest assured federal funding will deteriorate, triggering opt-out provisions. Congressman Joe Pitts warned, “There is no way the federal government can keep these promises. We can’t afford the entitlement promises we made before the ACA, and we can’t afford this either. . . “

Christie Herrera sums it up nicely over at the Mackinac Center blog: “[states have] no other option but to expand the Medicaid program exactly as it exists today, which other states have done with disastrous results. States can’t vary Medicaid benefits or implement co-pays or other cost-sharing mechanisms that aren’t currently allowed by federal law. If exchange benefits don’t comply with current Medicaid requirements, states must provide “wrap-around” coverage at the state’s expense.”

Our lawmakers are playing fast and loose with people’s health and taxpayer dollars by trying to outmaneuver the federal government to collect millions in taxpayer cash.

Instead of playing political games, let’s follow the lead of Florida which is working to improve Medicaid on their own terms.