Why States Can’t Turn Down the Medicaid Expansion

I’ve said it before, and I’ll say it again. It will be hard for states to turn down the Medicaid expansion:

  1. This is a pretty good deal for states. They’re getting most of the tab picked up by the feds.
  2. It’s one thing to turn down high speed rail. It’s another to tell your constituents that they can’t have insurance entirely paid for by the federal government in 2014.
  3. As more and more states take the money, those that don’t will be more easily marginalized.
  4. History. States threatened not to join Medicaid the first time as well. All did, eventually. Now the program is so American that threatening to remove it is “coercive”.
  5. There will be enormous pressure from doctors, hospitals,pharma, etc. who potentially will lose a lot of money in uncompensated care. They have pretty good lobbying groups.

Florida just joined those states. Florida!

Hours after the federal government agreed to grant Florida a conditional waiver to privatize Medicaid statewide, Gov. Rick Scott appears ready to endorse a plan to conditionally expand the health care program to at least 1 million more Floridians.

Scott has hastily called a 5 p.m. news conference to make an announcement regarding Medicaid.

It’s hard to ignore the irony here. Florida is, after all, the state that brought the case to the Supreme Court (and won!) to avoid the “mandatory” expansion. Now, Gov. Scott seems to be accepting it.

The legislature still has to approve this deal, and that’s not assured. But with popular support in the state, and lobbying from various health care system groups, I think they’ll follow Scott’s lead.

More states will follow.

[Cross-posted at The Incidental Economist]