Republicans Face Medicaid Expansion, Obamacare Repeal Questions

Published November 7, 2014

Although the Affordable Care Act seems to have been a political winner for Republicans on Election Day, at least two major challenges remain for the GOP in the health care arena, according to some policy experts: settling on a plan to replace the Affordable Care Act, or Obamacare as it’s more often called, and how to address Medicaid expansion in the states.

“Republicans should pass a conservative alternative to Obamacare that will pave the way to full repeal,” said Jeff Anderson, executive director of the 2017 Project, shortly after the election.

Joining Anderson’s call for the Republican majority to move forward on health care reform were John R. Graham and Devon Herrick, health care policy experts at the National Center for Policy Analysis (NCPA).

Writing the day after the election at NCPA’s blog, Graham and Herrick said, “[T]he Republican Party needs to avoid shooting itself in the foot, govern in a way that achieves results rather than perpetuates partisan bickering, and continue to develop patient-centered health reform.”

Replace—with What?

When it comes to finding a comprehensive reform that might one day replace Obamacare, Republicans in Congress will have no shortage of advice. One such plan comes from the 2017 Project, which urges Republicans to “show what real reform would look like—reform that would repeal every last word of Obamacare while also fixing what the federal government had already broken pre-Obamacare,” Anderson said.

The 2017 Project proposal uses tax credits to promote coverage for the uninsured, would guarantee renewability of coverage without premium increases due to health changes, fund state-based high-risk pools for the otherwise uninsurable, expand and subsidize health savings accounts, and scale back the tax deductibility of high-end employer-provided health plans.

According to the Center for Health and Economy, a nonpartisan research organization, the 2017 Project plan would save $1.1 trillion more over 10 years than Obamacare, and would cover 6 million more people.

Medicaid Expansion Reactions

The second challenge will be for Republican governors dealing with Medicaid expansion under Obamacare. Both newly elected and reelected governors who opposed Medicaid expansion generally fared well at the ballot box, including Maine’s Paul LePage, Wisconsin’s Scott Walker, and Illinois’ newly elected Bruce Rauner.

Alaska’s Sean Parnell (no relation to this writer) opposed expansion and lost to an independent challenger.

Republican governors who expanded Medicaid had more mixed election results, including Pennsylvania’s Tom Corbett, who expanded Medicaid under an agreement reached with the Obama administration in August and lost his reelection bid in November. Ohio’s John Kasich ignored his legislature to expand Medicaid and later cruised to victory over weak opposition.

Obama Administration Pressure

Although there is little to suggest Republican governors will pay politically if they don’t expand Medicaid, they are still likely to face intense pressure from the Obama administration and local interest groups, such as hospitals, who favor expansion. Republican governors in Indiana, Utah, and Wyoming are all exploring expansion options.

“The election … changed the politics on Obamacare’s Medicaid expansion in a number of states,” said Josh Archambault of the Foundation for Government Accountability. He specifically cited Arkansas as likely to pull out of its “private option” expansion after the election of Republican Asa Hutchison replaced Democrat Mike Beebe, who did not run for reelection because of term limits.

Archambault also expects states considering expansion to be cautious given the uncertainty of future federal funding in light of the $17 trillion national debt. “It is likely we will see lawmakers in Washington shift a greater proportion of costs onto states for Medicaid,” Archambault said. “Both Congressman Paul Ryan and President Obama have put forward budgets to do so, so the question is not if, but when.” 

Professor Michael Bond of the University of Arizona, an expert in Medicaid financing, agrees the Republican governors are now less likely to expand the program. “Republicans did much better than expected in governor’s races, and since most of them opposed expanding Medicaid it suggests there will be few of them who will now push for Medicaid expansion,” he said.

Sean Parnell ([email protected]) is managing editor of Health Care News.