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Republican Governors and the Medicaid Expansion: Capitulation or Manipulation?

FL Gov. Rick Scott

Florida Governor Rick Scott’s decision the other day to go along with the Medicaid expansion next year, after he had previously rejected it vehemently, has been widely interpreted as simply the latest event in a series whereby Republican governors are slowly seeing the handwriting on the wall and capitulating to the hated Obamacare, while also being motivated by one political factor or another; for example, Politico lays it to Scott’s sinking poll numbers.

But not so noticed are the conditions Scott was able to extract: his agreement is only for the first three years when the federal budget will pick up 100% of the cost, and, especially, all of these federal dollars will be privatized, pending, as HuffPo is careful to point out, approval by the Centers for Medicare and Medicaid Services. (Scott says his decision is made regardless of theirs, but I imagine he only says that because he’s confident they’ll approve the deal)

In the second most high-profile of these reversals, Arizona Governor Jan Brewer agreed in January to join the expansion, saying that the Affordable Care Act was the law of the land, like it or not. However, her acceptance was conditional in that, as a “circuit breaker,” Arizona will reduce the extra Medicaid enrollment the Act allows in proportion to reduction in the federal subsidy. This is the way to “keep Arizona tax dollars in Arizona,” as the Governor’s official website crows. Moreover, the program will be managed within a regime called the Arizona Health Care Cost Containment System, which appears Byzantine in complexity but, as the bottom line, entails entirely privatized care.

I have not studied the situation for the other states where Republican governors have agreed to participate, Michigan, Nevada, New Mexico, North Dakota and Ohio. (I leave that to someone more expert in this area than I am.) Yet it appears to me that what is going on is a movement to take advantage of the ACA as another means to funnel federal dollars into private industry (beyond what the non-Medicaid portions of the law already do), that is, into the kind of private firms that contribute to these governors’ campaigns.

There are more Republican governors who continue to reject participation than the seven that have now joined, but maybe that’s only because they haven’t figured out how to game the system yet.

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