Wyoming lags behind Western GOP states on Medicaid expansion

01.22.2013 - National Healthcare Reform

Arizona Gov. Jan Brewer’s initial opposition to the Affordable Care Act has softened over time, as has other Republican governors. (Courtesy of the Office of Gov. Jan Brewer)

By Ron Feemster

January 22, 2013

Four Republican Western-state governors who originally opposed the Affordable Care Act (ACA) changed their minds in the past month and came out in favor of expanding Medicaid coverage for their neediest residents. In Wyoming, however, Gov. Matt Mead has effectively asked the state’s poor to wait for health care coverage while lawmakers study the issues.

“Let’s decide what we want and make the pitch to the federal government,” Mead said in his State of the State address. “In other words, let us try within the law that is upon us to find the best deal, the best fit for Wyoming. To do nothing puts the full brunt of the ACA upon us – everything is dictated by the federal government – without an opportunity to tailor the law to our needs.”

Mead’s plan to take careful, measured steps forward and maintain some of Wyoming’s autonomy in the nation’s changing healthcare landscape may in fact eventually create a Medicaid package tailored to the specific needs of the state. But as he said in an address to state journalists on Friday, Jan. 18, it is unlikely that the state will be ready with such a Medicaid expansion plan on Jan. 1, 2014, when federal dollars for expanded Medicaid coverage begin flowing to the states.

Waiting to implement coverage will not only leave Wyoming’s neediest citizens without the coverage they would get in neighboring states, it will cost Wyoming more money than taking immediate action to implement the new law, according to a Wyoming Department of Health report.

Medicaid expansion is divided into two parts. Covering adults making less than 138 percent of the federal poverty limit is optional after the Supreme Court decision last summer that upheld the law. That’s what the governor wants to study in greater detail. If this expansion is carried out, the federal government will pay 100 percent of the costs for three years and 90 percent of the costs after that, according to the ACA.

The second part of Medicaid expansion is mandatory. Uninsured poor people who are currently eligible for Medicaid are likely to enroll when all Americans are required to buy health insurance in 2014. Current eligibility is determined by fitting into a category such as pregnant women, low-income children, and the blind or disabled.

Wyoming must pay 50 percent of the cost for these people expected to become newly enrolled in Medicaid, whether or not the state carries out the optional expansion. Tom Forslund, director of the Wyoming Department of Health, forecasts that the state will pay $70 million between 2014 and 2020 to cover this population.

Expanding Medicaid, according to Forslund’s forecast, would however convert this $70 million loss into a $47 million savings by shifting almost $120 million in state health costs for Wyoming’s poorest citizens to the federal Medicaid budget. But eliminating these programs, which are paid for with the state’s general fund, is only possible if the state commits to the optional Medicaid expansion.

As Dan Neal of the Equality State Policy Center puts it, “We can take the option that offers more services to more people and saves money. Or we can offer fewer services to fewer people and lose money. The case is irrefutably clear if you are a fiscal conservative.”

This financial argument changed the minds of Republican governors in Arizona, Nevada, North Dakota and New Mexico — all early opponents of the ACA. All four governors have said essentially the same thing. They don’t like the ACA, but they believe states have to go all in to get the advantages the new law offers.

“My concerns about the Affordable Care Act are well-known,” said Jan Brewer, governor of Arizona in a statement last week. “But it is the law of the land. With this expansion, Arizona can leverage nearly $8 billion in federal funds over four years, save or protect thousands of quality jobs and protect our critical rural and safety-net hospitals.”

Mead is not swayed by the decisions of the other governors. “Jan Brewer’s decision doesn’t have any impact on my thinking,” he said through Renny MacKay, his spokesperson. “Individual governors are going to make their own choices and do their own analysis. We are going forward with what is best for Wyoming.” Advocates of optional Medicaid expansion might be forgiven for seeing Mead’s decision to slow down the process as only the latest in a series of stalling tactics. Wyoming has dug in its heels over and over to resist “Obamacare.” In 2010, shortly after the president signed the law, Wyoming joined a lawsuit to overturn it. Arizona, Nevada and North Dakota, who have now decided to accept the optional Medicaid expansion, were also parties to the suit.

Wyoming legislators then passed a law that hamstrung their own ability to study the ACA until after the Supreme Court decision, which came down in June of last year. Despite the court’s ruling to uphold the law, the legislative committee handling ACA issues put off action again. Co-chairman Charles Scott said at that time that a Republican sweep in the national elections in November would kill the ACA in any case. Actual election results made it clear that Obamacare would remain law.

Since then, the Wyoming Department of Health has presented its report, which showed in great detail how expanding Medicaid would save the state almost $50 million by 2020. Gov. Mead commissioned the report but has withheld his support for the expansion. He called for a thorough discussion in the legislature. But when the session began, not a single line of legislation about Medicaid expansion had emerged from the Labor, Health and Social Services Interim Committee.

This past week, two things happened in Cheyenne. On Wednesday, January 16, Sen. John Hastert (D-Green River) introduced a bill to expand Medicaid. And two days later, in his address to the Wyoming Press Association, Mead suggested that the state wait and study the new federal regulations before taking action. No expansion, or a delayed implementation, would be preferable to wholesale acceptance of a federal law whose  whose implementation details are not yet clear, according to Gov. Mead.

Mead’s hesitation is understandable, if one looks only at his ongoing struggle to get answers from the federal Department of Health and Human Services about the fine-print details of the ACA. WyoFile reported in September on the governor’s famously unanswered letter to Health and Human Services Secretary Catherine Sebelius. He is still pushing for more information, enough to develop a plan that would address the specific needs of Wyoming. The federal guidelines, such as they are, suggest that states can develop a unique, flexible implementation, and that the federal government will work with them. Mead has said he wants to pursue that avenue for more flexibility.

Hastert’s two-page bill takes the opposite approach. Referencing the relevant paragraphs of the Affordable Care Act, it says that Medicaid shall be expanded to cover all persons defined as eligible under the ACA and allows the state to receive $157 million in federal funds for that purpose. The bill is short, simple and probably a very hard sell.

“It’s going to be an uphill fight,” said Hastert (D-Green River), the author of the bill. “I was hoping for more bipartisan support. Several people told me they would support it but they didn’t want to put their names on it.” Including Hastert, the bill has 12 co-sponsors. Only three are Republicans.

If the different strategies for optional Medicaid expansion were automobiles for sale, the governor would be considering a customized vehicle, ticking off all the specific options he wants, and he’d be willing to wait for delivery. Hastert, on the other hand, would commit Wyoming to the standard model, even if the dealer (the federal government) provided an incomplete list of features on the order date. But unlike the governor’s customized model, Hastert’s stock vehicle would be available on the first possible delivery date.

Like the governors who came out this week in favor of Medicaid expansion, the Hastert bill makes Medicaid expansion contingent on federal funding. It would end the program in Wyoming if the federal reimbursement level falls below 90 percent.

Although Mead’s plan to customize the program is the latest reason to delay Medicaid expansion, it is probably not the core problem for opponents of the expansion. Many legislators object to Medicaid expansion (and the ACA as a whole) because they believe the federal government will run out of money and not keep its promise to fund the new law. The governor added his voice to this chorus as well. Mead told the assembled press in Cheyenne that the state needs to have a plan if the federal government can’t keep their funding promises and leaves 30,000 newly insured Wyomingites on the Medicaid rolls.

In fact, as the Wyoming Department of Health report explains, only about 18,000 of those 30,000 citizens will be reimbursable at the higher rates of 100 percent or 90 percent. The remaining 12,000 (as estimated in the report) of the governor’s 30,000 are eligible for Medicaid already. The state will have to pay for them either way. And, as Hastert pointed out in an interview, the federal government has never failed to pay its share of a Medicaid invoice.

It seems one must go back decades to find instances of the state turning down federal money, according to Neal, of the Equality State Policy Center. Neal does not believe the state has turned down a check from Washington since the 1980s, when it refused federal highway money in order to maintain Wyoming’s lower drinking age.

In fact, two years ago Wyoming lawmakers refused an extension of federal unemployment benefits, saying that accepting the money would have further added to the nation’s debt. A WyoFile feature revealed that many of the lawmakers who blocked the federal unemployment benefit extension had received sizable agriculture subsidies.

At some point legislators need to look at Medicaid expansion as a fiscal issue. “I think legislators are feeling a little hemmed in by the ideological positions they have taken,” said Neal. “Wyoming can figure out the new political frame and how to function within it. The state is good at that.”

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