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New estimates soothe Medicaid expansion fears in three big states

January 22, 2013
by Dennis Grantham, Editor-in-Chief
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Three GOP governors find Medicaid expansion costs far lower than feared
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After very rough sledding for much of Fall 2012 among "red state" governors, prospects for state adoption of the Medicaid expansion provisions in the Affordable Care Act appear to be improving somewhat in three big states headed by GOP governors:  Florida, Ohio, and Arizona.

Stalwart conservative GOP Gov. Jan Brewer of Arizona announced in a statewide address this week that she now supports Medicaid expansion, a reversal that she bases on the economics of the proposal, which would add state budget revenue and jobs. In supporting the expansion - which still requires the state legislature's approval - Brewer joins four other GOP Governors Jack Dalrymple of North Dakota, Susana Martinez of New Mexico, and Brian Sandoval of Nevada. Idaho's governor, Butch Otter, is the latest of 10 GOP governors to oppose the expansion, despite the strong recommendation of a state board chartered to review the matter.

Political heat is growing on two other governors, particularly on Florida's Rick Scott, whose administration was embarassed earlier this week when it continued to publish exaggerated cost estimates that said the expansion would cost the state a colossal $26 billion over 10 years - a claim that PolitiFact called "false" - while findings from other studies ranged from a net positive to total cost estimate of $1 to $9 billion. The original state study apparently assumed that the federal Medicaid match would remain the same as it is at present (58 percent), though the federal government has promised a 100 percent Medicaid match through 2018, followed by 90 percent thereafter. 

In Ohio, pragmatic GOP Gov. John Kasich has kept a much lower profile on the Medicaid expansion issue, following the release last summer of a state study that estimated a Medicaid expansion cost of about $2.3 billion over 10 years. Greg Moody, leader of the Governor's office of Healthcare Transformation, has worried publicly that, in the event that the expansion proceeds, the state's Medicaid system might nevertheless be overhelmed.

Moody maintains that 600,000 Ohioans newly eligible for Medicaid benefits through the expansion could well be joined by hundreds of thousands of other Ohioans who are eligible, but are not enrolled, under current state Medicaid laws. It is this influx, not the expansion population, that Moody says would boost the state's costs, since the state would have to pay its traditional Medicaid share - about 32% of the total costs of care - for those eligible under current rules, instead of the 0 to 10 percent state share promised for the beneficiaries brought in by the Medicaid expansion.

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Dennis Grantham

Dennis Grantham

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www.behavioral.net