Further Medicaid Expansion Depends on Elections in 2016

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By Madison Alder

July 18 — Voters' decisions in this fall's gubernatorial elections could determine Medicaid expansion in three key states.

Of the 19 states that haven't expanded the program, three—Missouri, North Carolina and Utah—will elect a governor in 2016.

Medicaid expansion was introduced as part of the Affordable Care Act in 2010 and makes states eligible to receive increased federal funding for Medicaid services. In 2012, the U.S. Supreme Court said the federal government cannot require states to expand Medicaid, and the expansion became optional.

Bloomberg BNA interviewed policy experts and advocates in late June and July to assess the Medicaid landscape in these three states.

Expansion is intended to provide health insurance to those in the “coverage gap,” a crack people fall into when they earn too much to qualify for Medicaid but not enough to purchase private insurance through the marketplace. Expansion reduces the coverage gap by increasing Medicaid eligibility for people earning up to 138 percent of the federal poverty level.

In the first three years of expansion, ending in 2016, coverage for newly eligible adults was fully funded by the federal government. That federal funding phases down to a 90 percent federal match by 2020, according to the Department of Health and Human Services.

Elections Matter

“There’s obviously been a political ideological component to expansion in many of the states,” Robin Rudowitz, associate director for the Kaiser Commission on Medicaid and the Uninsured, told Bloomberg BNA July 15.

States with Republican or Democratic majorities in their legislatures have chosen to expand based on federal guidelines or develop a state-specific alternative to receive the federal funding.

Evidence of fiscal benefits and reduction of the uninsured population “overwhelmed the political ideological barriers” in the states that expanded Medicaid, Rudowitz said.

Republicans in states that haven't already expanded their Medicaid programs continue to oppose expansion because they don't want to risk growing the program in case the federal government's funding is less generous in the future.

Often it is the state legislature blocking expansion even if the governor has been a proponent of it, such as in Utah and Missouri, Rudowitz said. The North Carolina Legislature was one of the first states to implement legislation preventing the governor from using executive action to expand Medicaid, she said.

But election of a new governor can make a difference in states grappling with expansion.

“The last election was interesting because you saw a change in governor in Louisiana that allowed the state to go forward with expansion,” Rudowitz said, referring to the election of a Democrat, John Bel Edwards, in 2015. Edwards immediately took action to expand Louisiana's Medicaid coverage in early 2016.

And in Kentucky, Gov. Matt Bevin (R), a critic of the Affordable Care Act, ran his 2015 gubernatorial campaign on health-care changes that are now being implemented, she said. Bevin recently called for Medicaid changes that create “an opportunity for people to take responsibility for their health care needs” (121 HCDR, 6/23/16).

The end of the Obama administration in early 2017 could help disassociate Medicaid expansion with the president and encourage more states to consider expanding their programs, Rudowitz said.

“The bottom line is: Elections do matter,” she said.

Missouri: Open Seat

Gov. Jay Nixon (D) has been advocating for Medicaid expansion in Missouri, but has faced partisan gridlock in the Missouri Legislature throughout his second term.

Bound by term limits, Nixon is on his way out of office, and the election to fill his seat has become one of the most watched gubernatorial races in the nation, with three Democrats and four Republicans battling for their party's nominations.

The Democratic frontrunner, Chris Koster, the state attorney general, favors the expansion. Koster's platform specifically mentions the benefits of expansion like generating jobs and stimulating the economy.

All four Republicans disagree.

In a debate May 10, Republican candidates John Brunner, Eric Greitens, Catherine Hanaway and Peter Kinder said they would not support Medicaid expansion efforts. Missouri's primary to choose gubernatorial candidates for all parties is Aug. 2.

Action by Legislature Required

But the final decision isn't in the governor's hands.

Unlike states where governors have used executive action to expand Medicaid under the ACA, expansion in Missouri will require a vote in the Legislature, Sidney Watson, law professor at St. Louis University School of Law, told Bloomberg BNA.

“I don’t think there will be a dramatic turnover [in the Legislature] because of Medicaid expansion—or any issue really,” Watson said.

Republicans hold 24 of the 34 seats in the state Senate and 116 of the 163 seats in the Missouri House; 67 of the House seats are uncontested in 2016.

The Republican-led Legislature's aversion to the expansion efforts is due in part to residual anger over the lack of discussion about Medicaid expansion the last gubernatorial election.

In Nixon's 2012 bid for a second term, he didn't talk about expansion during the campaign but came out in strong support of the issue soon after he was re-elected, Watson said.

“Republicans felt they lost the opportunity to run against him on the issue,” Watson said.

Nixon's first attempt at expansion in 2014 was shot down by the Senate in a 23-9 party-line vote.

Watson said another reason for the gridlock is that many Republicans in the Legislature ran their campaigns on an “anti-Obama” platform.

“It’s difficult if you run on that platform to turn around and vote for Medicaid,” Watson said.

Medicaid Not a Talking Point

Republicans in the Legislature aren't talking about Medicaid expansion out of fear they'll be contested in their re-election, she said.

However, despite the Republican supermajority in both houses, a smaller-scale Medicaid expansion bill with a normal state-to-federal funding match was passed and signed into law by Nixon on June 9.

The law changed the rules for people to qualify for Medicaid if they have a disability or if they are 65 or older.

“It had overwhelming support,” Watson said. The bill passed was because it isn't connected with Obama or the ACA, she said.

North Carolina: GOP Incumbent

President Barack Obama and presumptive Democratic nominee Hillary Clinton visited North Carolina July 5 to attempt to turn the state blue.

But the visit could help mobilize support for more than Clinton alone.

Democratic gubernatorial nominee Roy Cooper, North Carolina's attorney general, joined Obama and Clinton during their visit. His appearance could be an important step in taking the lead over incumbent Gov. Pat McCrory (R) in one of the closest races for governor this election cycle, Ferrel Guillory, professor at University of North Carolina School of Media and Journalism, told Bloomberg BNA.

“There is potential for turn-around in Medicaid, because of the results of the election,” Guillory said.

Health Care Not Top Issue

Though expansion will be in the mix of election issues, it won't be as prominent as education or taxes, he said.

“This election is really about the direction of the state,” he said.

Though McCrory has implied a willingness to be open to Medicaid expansion, the issue hasn't gained traction with Republicans in the Legislature.

In April 2013, the North Carolina Legislature passed a law barring McCrory from taking immediate action.

Cooper has been vocal about favoring expansion throughout his campaign, citing benefits like an increase in care providers and the resulting economic stimulus in his platform.

Republicans hold 34 of the 50 seats in the state Senate, giving them a supermajority in that body and an advantage in blocking expansion efforts if there were a pro-expansion governor.

In the state House, Democrats hold 45 of the 120 seats. They would need 49 to block the three-fifths majority the Republicans require to override a veto by the governor.

That means if Cooper were elected governor and vetoed anti-expansion legislation, Democrats would have the numbers to prevent the veto from being overridden, Guillory said.

Health-care advocate Lee Storrow said while he thinks it's “highly unlikely” there would be any movement during 2016 in closing the Medicaid gap, a change in the House's composition could present room for compromise.

What Voters Want?

Which may be representative of what North Carolinians want.

Through a series of listening sessions with residents in March and April, North Carolina's Department of Health and Human Services found that closing the Medicaid coverage gap was the most consistent issue people were interested in, Storrow said. Storrow is the executive director of the North Carolina AIDS Action Network and a former Chapel Hill council member.

The feedback from the 12 listening sessions was part of a process that culminated in McCrory's signature on an application to the federal government for Medicaid reform June 1. The opt-in for ACA Medicaid expansion, known as a Section 1115 waiver, proposes six provisions that would expand care and hold providers accountable, but it likely will take years to approve and enact. If approved it would be another step in the state's transition from a Medicaid fee-for-service system to a managed care system (185 HCDR, 9/24/15).

Utah: New Leadership Unlikely

Gov. Gary Herbert (R) has attempted to expand Medicaid several times during his term, but each attempt at compromise has failed in the Utah Legislature.

That failure is being capitalized on by Democratic challenger Mike Weinholtz, who has criticized Herbert's inaction when his proposals died.

Weinholtz is the chairman of the board for CHG Healthcare Services, a national health-care staffing company.

Weinholtz “feels really strongly about this issue,” Josh Kanter, founder and board chairman of political watchdog group Alliance for a Better Utah, told Bloomberg BNA. “And I think he’s running, in many ways, on the idea that Utah has got to change.”

Action Before Election Unlikely

Kanter said it would surprise him if Weinholtz used executive action to advance Medicaid expansion should he be elected.

According to early polls, the likelihood of a Weinholtz victory is slim.

Herbert has a 27-point lead over Weinholtz, according to an early poll by Gravis Marketing of 1,519 registered voters. Other polls give Herbert at least a 20-point lead.

Utah is in a phase in which many people distrust the Obama administration and the federal government, Kanter said. When Medicaid expansion was first announced, Herbert in December 2014 quickly developed a Utah-specific plan called Healthy Utah, because it would be more likely to pass.

The near-full expansion plan was shot down by a House committee that favored its own, less expansive plan, Utah Cares. Both plans died in the 2015 session.

Herbert then formed team of six Republican leaders to make another compromise, but the proposal failed. It received only seven “aye” votes in a party caucus, indicating it was sure to fail in the Utah House, where Republicans hold all but 12 of the 75 seats (39 HCDR, 2/29/16).

‘Disappointing' Outcome

“It was really disappointing that the governor didn't use more political capital to push through his plan,” Kanter said. “He just stepped away.”

In February, Herbert signed a law that will cover 16,000 residents and cost the state $30 million with a 70 percent match from the federal government.

That change is not enough, Kanter said. Herbert's original plan would have covered about 105,000 residents and cost Utah $78 million. The plan would have received 100 percent coverage for the first year under the ACA and 90 percent in the third year.

The Legislature is going against the wishes of Utahans—polls indicate education, health-care and air quality are the top issues, he said. “But those issues aren't carried to the ballot box.”

Few things could weaken Herbert's chances at winning the election, but Utahans' distaste for presumptive Republican presidential nominee Donald Trump could be one of them, Kanter said. Dislike of the candidate may affect the decisions of Utahans on the rest of the ticket in the fall.

To contact the reporter on this story: Madison Alder in Washington at malder@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

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