Now that the Supreme Court has made it easier for states to choose not to take part in the Medicaid expansion provision of the Affordable Care Act, some Republican governors have already started seizing on this latitude. In just the few days since the ruling came down, both South Carolina Gov. Nikki Haley (R) and Florida Gov. Rick Scott (R) have affirmatively declared their states will not take part in the Medicaid expansion. There are indications other Republican governors may also soon follow.
The governors are refusing to take part even though generous federal funding — initially, 100% of the expansion costs — means the cost to the states would be very small compared to the number of additional people who would receive benefits in each state.
There is a chance these governors may relent after the 2012 election as a result of political pressure both from regular people and powerful health care industry lobbies. But if the states do follow through in denying coverage, this could have a huge impact on the lives of millions of Americans.
According to the Kaiser Family Foundation, Florida is tied for first in having the largest percentage of non-elderly people making less than 139 percent of the Federal poverty line (FPL) who are uninsured, with 44 percent of this population without coverage. South Carolina is not far behind in 4th place with 39 percent of their population without insurance. These are the states where the Medicaid expansion is most critical.
While people making over 100 percent of the FPL may qualify for exchange subsidies if their state doesn’t expand Medicaid, it is possible those making less but who don’t currently qualify for Medicaid will be left without any options.
In a related note both governors said they would not set up state exchanges, but this development is less critical since the federal government can set up exchanges in any state where the state fails to do so.
Hopefully, the one positive byproduct of this incredibly cold-hearted political stance on both provisions by the governors is that it will get politicians to finally accept that federal-state partnerships in health care are a horrible approach. Medicaid has always functioned worse than fully federal Medicare because of this stupid design problem. The fact that Democrats idiotically insisted on using state-federal partnerships for exchanges and Medicaid expansion guarantees the ACA’s coverage expansion efforts will function worse than it should have.