Supremes’ Inadvertent Gift To Medicaid

When the U.S. Supreme Court, even as it validated the constitutionality of the Affordable Care Act’s individual mandate, held that Congress could not require states to participate in ACA’s Medicaid expansion as a condition for participation in the Medicaid program, no one (so far as I can recall) predicted it might make Medicaid largely bullet-proof in short-term budget negotiations. But that’s largely what has happened, at least in the current round of fiscal talks. Here’s WaPo’s Sarah Cliff:

[A]s legislators eye entitlements as one way to cut the deficit, advocates see a silver lining in the Supreme Court’s decision: The White House appears reticent to cut Medicaid at the same time it’s trying to woo governors into participating in a crucial Affordable Care Act provision.

“There’s a deep realization among Democrats that the Supreme Court altered the dynamic on Medicaid,” said Neera Tanden, president of the left-leaning Center for American Progress. “We live in a new reality where any additional burdens to Medicaid could have new meaning.”

“I have participated in many different types of meeting that included White House staff, and there’s a strong conviction that Medicaid really deserves the highest protection,” said Ron Pollack, president of health advocacy group Families USA. “The Supreme Court decision changed the dynamic of the process, in a way that requires stronger protection of federal funding to the states.”

The basic logic is that in the 23 states that have not yet decided whether to participate in the Medicaid expansion, any indication that the federal government’s commitment to bearing its high share of the burden of financing the program could prove to be political dynamite. For its part, aside from the desire to implement Obamacare as it was originally designed, the administration is already struggling with the task of establishing health exchanges in states that are not cooperating by creating their own. States rejecting the Medicaid expansion place additional strains on the exchanges, which will have to pick up millions of people who might have been covered by Medicaid.

Says Bob Greenstein of the Center for Budget and Policy Priorites and a tireless advocate for Medicaid and other federal-state low-income programs:

“The states’ decisions are probably the single most consequential decisions for Medicaid in 40 years,” he said. “The White House understands that. this is the single issue where the savings they’re pursuing are less significant than the ones proposed in their 2013 budget.”

That’s quite a welcome turn of events, since not that very long ago the big question about Medicaid was whether a Republican president and Congress might all but obliterate the program by turning it into a block grant, with big red flashing signals inviting the very state officials hostile to the ACA Medicaid expansion to move in the opposite direction, cutting benefits and eligibility radically.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.