HARRISBURG – For Ohio Gov. John Kasich and Michigan Gov. Rick Snyder, both Republicans, the federal government’s pledge to pay the lion’s share of a massive Medicaid expansion under President Barack Obama’s sweeping health care law brings the promise of a plumper state treasury, a stronger economy and healthier residents.
For a fellow Republican governor of another heavily populated, northern industrial state, it was the opposite. Gov. Tom Corbett projected billions of dollars in costs for Pennsylvania taxpayers and declined this month to go along with it, at least for now.
Why the contrast?
Well, there’s the politics. The Republican Party’s conservative base despises the federal health care law: Of the 14 governors who have rejected it, all are Republicans.
There are no primary challengers in sight for Snyder and Kasich who, like Corbett, are expected to run for re-election next year. But Corbett is already being attacked by one potential primary foe, Montgomery County Commissioner Bruce Castor, who opposes the Medicaid expansion.
Corbett’s rejection of the expansion “could be seen as using what power he has on this matter to directly challenge what he thinks is bad policy and that, for many Republicans, is probably pretty popular,” said Muhlenberg College political scientist Christopher Borick, who directs the school’s polling institute.
Still, Corbett has left the door open to reconsider his decision, but the clock is ticking: Federal money for the expansion becomes available to states next year, just a few months before Pennsylvania’s 2014 primaries.
Corbett, like some other Republican governors, has pressed the issue of Medicaid’s flexibility. According to administration officials, that means allowing the state to tailor Medicaid to people’s needs. That would save the state money because it wouldn’t have to pay for insurance that people don’t need, said the Department of Public Welfare’s budget director, David Spishock.
“A lot of people say the system is broken,” Spishock said. “I’m not sure the system is broken, but there’s maybe some efficiencies we can build into the system and we would like to build in those efficiencies prior to doing an expansion.”
A draft of federal regulations addressing that topic is up for public comment and might be something for the Corbett administration to look at, said Joan Alker, the co-executive director of Georgetown University’s Center for Children and Families.
Development of those guidelines is just beginning to emerge after the U.S. Supreme Court threw a curveball in upholding the health care law last summer. The court barred the federal government from forcing states to expand Medicaid eligibility, effectively making it a state-to-state decision.
But Alker also said the offer of generous federal funding beginning in 2014, not flexibility of benefits, to cover the uninsured should drive a state’s decision.
“This is a very good offer, and so if a governor decides not to accept the federal money, my guess is there is an ideological component to that decision,” Alker said. “I think if (the Corbett administration) really, really wanted to move forward, this should not be inhibiting them.”
Hundreds of thousands of people – estimates range above 700,000, primarily adults under 65 – are expected to enroll in Medicaid as the health care law unfolds next year. That’s out of about 1.35 million who do not have health insurance, the U.S. Census Bureau estimates.
For now, the Republican-controlled Legislature is not pressing the case to expand Medicaid, but Corbett nonetheless is probably feeling pressure.
Democrats, labor unions and a wide range of advocates for the poor and disabled support it.
In a state with one of the largest elderly populations in the U.S., the AARP supports the expansion because of the help it could bring to the state’s 50-plus population who lost their jobs in the recession, do not have the savings to pay for health care and aren’t yet Medicare age.
The state’s hospitals and health systems want the Medicaid expansion and warn of deteriorating hospital finances.
John Simodejka, the president and CEO of the Pottsville-based Schuylkill Health System, said about 3,500 more people in Schuylkill County would get health insurance under the Medicaid expansion. Without an expansion, its hospitals will continue to shoulder the cost for their care while the system will lose about $500,000 a year in disappearing “disproportionate share” Medicaid payments under the federal health care law.
“It makes a challenging environment more challenging,” Simodejka said.
In addition, some projections show that greater proportions of rural residents would benefit – a point underscored by Republican lawmakers who quietly note that the taxpayer money would help hospitals in their districts.
In any case, the Corbett administration’s estimate that Pennsylvania’s taxpayers will have to shoulder a $4 billion tab under a Medicaid expansion over the next eight years is probably inflated. It is much higher than an estimate from the Kaiser Commission on Medicaid and the Uninsured, and some of the costs Corbett counts would occur anyway under the federal health care law — a point that Spishock concedes.
In addition, some governors calculated the tax benefit that would result from billions of federal health care dollars pumping into their state’s economy. Corbett did not.
Democrats who are lining up to challenge Corbett next year support the Medicaid expansion. One of them running an effective campaign, Borick the pollster said, could highlight Corbett’s choice by making this argument: “Look at how many Pennsylvanians will remain uninsured because of this decision.”