By James Kwak
In my Atlantic column on Thursday, I wrote the following about the Roberts Court’s decision to allow states to opt out of Medicaid expansion without losing their existing Medicaid funding:
“What we are going to see is Republican-controlled state governments refusing to expand Medicaid out of bitter hatred toward President Obama and spite for the working poor who need access to health care.”
For those who aren’t up to speed, the deal is basically this. Medicaid is administered by states (which often outsource it to third parties), but the federal government sets certain minimum coverage requirements that states must meet in order to receive federal funding. Those requirements are pretty low, states can choose not to cover able-bodied adults without children, regardless of their income. The Affordable Care Act required states to dramatically increase their Medicaid coverage, with the federal government kicking in 90 percent of the additional funding required (100 percent in the early years).
So, you’re a Republican state governor. (Assume that your party controls the legislature.) You have some working class households in your state that make, say, $25,000 and don’t get health insurance through work. Currently many of them are uninsured. As governor, you have some obligation to look after their interests, even if it’s not a technical legal obligation. You could buy all of them health insurance (not very good health insurance, mind you, but it’s far better than nothing) at a 90 percent discount because the federal government will pick up the rest of the tab.*
On economic grounds, the decision is obvious: you expand Medicaid. And this is why various commentators have said that, when all the brouhaha dies down, most states will do it.
But the politics are equally clear. Medicaid expansion is the one part of “ObamaCare” that the Supreme Court specifically excused you from. If you expand Medicaid, in your next primary, the Tea Party candidate—buoyed by millions of dollars from Karl Rove and the Koch Brothers, who want Medicaid to be as small as possible—will say that you supported ObamaCare. And, frankly, she will be right: you supported ObamaCare because it was good for the people of your state. But you can’t say that, because that sounds even worse.
It comes down to this: whom do you care about more, the working poor or the Tea Party?
So far, conservative darlings like Scott Walker of Wisconsin and Rick Scott of Florida have been very clear where they stand. They are willing to turn down oodles of federal money on the grounds that they need to kick in ten cents on the dollar to cover people who would otherwise go without health insurance.
You really have to hate poor people a lot to make that decision.
* If you don’t cover them, you are saving the federal government money, but only a small fraction of that money will go to the citizens of your state.