Obamacare hits a tipping point: Most governors now want to expand Medicaid

Early Medicaid expansion map. Compare with current map below.

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By Sarah Kliff, Published: September 16, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.

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Pennsylvania Gov. Tom Corbett (AP)

The Medicaid expansion appears to be, well, expanding, and it's happening with the support of Republican governors.

Pennsylvania Gov. Tom Corbett is expected to announce on Monday afternoon his support for expanding Medicaid in his state to 500,000 currently uninsured Pennsylvanians. Earlier Monday, Michigan Gov. Rick Snyder signed legislation that will expand the Medicaid program in his state, as well.

Between Pennsylvania and Michigan, you're looking at more than 800,000 people becoming eligible for new health law programs. And if the Pennsylvania expansion does go through, it would be the 26th state to expand Medicaid, meaning that the majority of states had decided to opt into a massive health law provision that the Supreme Court decision last year accepted.

Pennsylvania is not a done deal: The Philadelphia Inquirer reports that Corbett wants to include provisions that would require Medicaid recipients to be actively searching for work, and it will ultimately be up to the federal government to decide whether to approve such a provision.

Still, the wave of action just weeks before open enrollment launches suggests that some Republican governors are more open to the health law program. And it seems to come down to two key factors: the massive amount of federal funds at play, and Republicans' sense of the leverage they have in this situation.

First, the money: In Michigan, Snyder has referred to federal funding often in making his case for a Michigan Medicaid expansion. ""The Healthy Michigan plan is vital to the health of our families and the economic success of our state," he said in one statement in late June, when he was pushing the state legislature to sign off on the proposal.

Michigan is expected to get an additional $25 billion in federal funding over the next decade through the Medicaid expansion, while spending an additional $4 billion of state funds to cover over 300,000 people. The reason the funding tilts so heavily in the direction of the federal government has to do with the law: It has the feds pay for 100 percent of the cost of the newly expanded Medicaid population for three years. After 2017, the match begins to fall, over the course of a few years, to 90 percent.

That's not the entire cost, but it's certainly a better deal than the traditional Medicaid funding arrangement, where the federal government covers about half the costs.

The second factor driving these decisions has to do with Medicaid waivers -- when governors want permission from the federal government to try something new with the program. Republican governors have increasingly come to see their decision on Medicaid expansion as allowing them leverage to request big changes to the program.

We saw this in Florida, where Gov. Rick Scott's decision to support the Medicaid expansion came alongside the federal government granting a waiver allowing for greater use of private health insurance plans in the public program. The Florida legislature did not ultimately move forward with the policy.

Pennsylvania's Corbett also looks like he wants to pursue significant changes to the state Medicaid program. "Corbett's 'Healthy PA' plan will contain additional provisions such as co-pays and work-search requirements for both new and existing Medicaid recipients," the Philadelphia Inquirer reports. "Their co-pays would be based on income that would be capped at $25 a month."

To have two Republican governors moving forward with the health law program on the same day suggests that some of these incentives are enticing more governors as the insurance expansion nears.

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