Governor Rick Scott expresses his disappointment about the Supreme Court’s decision concerning the healthcare bill at a news conference on Thursday, June 28, 2012, in Tallahassee, Florida. (AP Photo/Steve Cannon)
Nearly 1 million Floridians will be denied access to Medicaid they would have otherwise received under the Affordable Care Act if Governor Rick Scott gets his way. The Supreme Court ruling last week on the law made it easier for states to opt out of an expansion, and Sunday night the governor’s office e-mailed a statement from Scott that “since Florida is legally allowed to opt out, that’s the right decision for our citizens.”
According to the Kaiser Family Foundation the Medicaid expansion in Florida would have covered 951,622 people that currently don’t have insurance. The federal government would have picked up the entire tab for the first three years, and by 2020 would still be paying 90 percent. But Scott—a former CEO of a large hospital chain who rode to Tea Party stardom and the governor’s mansion by being a rabid opponent of “Obamacare”—apparently finds the political posturing more important.
Similarly in South Carolina, Governor Nikki Haley—another Tea Party darling elected along with Scott in 2010—said her state would opt out as well. “We’re not going to shove more South Carolinians into a broken system,” said a Haley spokesman. The expansion there would have provided coverage to 330,932 people.
These are no doubt worrying developments, but it’s important to note that this could amount to nothing but saber-rattling by politicians dedicated to the Tea Party cause. It’s not up to either Haley or Scott to reject the expansion—it must be done by the state legislatures, and while both are controlled by Republicans and the leadership of the governor matters, it’s far from a done deal. The Medicaid expansion won’t take place until 2014 and there are many factors that could keep the expansion on track in both states, and the others that are contemplating an opt-out.
Let’s start with the raw logic of participating in the expansion, which I will grant up front clearly has no place in the decision making of Scott and Haley, nor in the Tea Party–driven hysteria around the law. But here it goes anyway: if you’re interested in fiscal conservatism and maximizing value to taxpayers, it’s a good call to participate in the expansion.
According to the Urban Institute, in 2008 $10.6 billion in state and local dollars went to providing emergency healthcare for the uninsured. The ACA is projected to expand coverage to 33 million people by 2022, in large part through this Medicaid expansion, and so participation will ultimately help rein in state budget deficits over the long term. And the ultimate cost for participating is only a 2.8 percent increase in state Medicaid spending.
Also: taxpayers in South Carolina, Florida and elsewhere will be funding the Medicaid expansion through their federal taxes anyhow. It’s just a question of whether they will then be denied the benefit of those tax dollars—and then get screwed even further when state budget problems get worse because of the higher levels of uninsured, and vital services are cut.
But again, Scott and Haley clearly hold Tea Party rhetoric and positioning supreme and won’t engage with these facts. What might yet stop them, however, are powerful hospital lobbies.
As Abby Rapoport chronicles, when the administration was negotiating with the hospital industry to support the ACA it actually got them to agree to a cut in Medicare and Medicaid rates—and the reward was a Medicaid expansion. Charity care is a massive drain on the hospital industry and they want more people on the Medicaid rolls.
But now hospitals in South Carolina and Florida are looking at a rate reduction without the corresponding increase in Medicaid coverage.
Hospital lobbies are always powerful in state politics, and could yet convince state legislators to buck the ideological governors and support an expansion. Combine the big industry money with a powerful narrative about denying coverage to hundreds of thousands of people, plus the diminishing returns of rallying against Obamacare—particularly after the fall elections—and by 2014 it’s possible Florida, South Carolina and other states will end up participating. They’re just going to make a lot of noise first.