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2016 Preview: Medicaid's Slow Growth

By Marissa Evans, CQ Roll Call

January 8, 2016 -- Some Republican-led state legislatures in 2016 will continue to reconsider their initial opposition to expanding Medicaid under the Affordable Care Act, and in some of those states the rethinking will be driven by the governor.

Governors in Alabama, Louisiana, South Dakota, and Utah are all considering expansion plans, but even for Republican governors with Republican legislatures, the task won't be easy.

Matt Salo, executive director for the National Association of State Medicaid Directors, says that while Louisiana's situation is unique because the Democratic governor has executive authority to expand the program, the others will find it hard to convince anti-Obamacare legislatures to expand their Medicaid programs.

"You have a lot of other hurdles to overcome," Salo says. "You have to get the legislature on board, you have to put the meat and the bones of the proposal together and figure out what you're asking for. Are you going to get the vanilla Medicaid expansion which will get you a 'yes, please' from [the federal Centers for Medicare and Medicaid] in three seconds or—in order to get it through the legislature—will you have to craft something different?"

The 2010 health care law allowed states to expand Medicaid eligibility to individuals with incomes up to 138 percent of the poverty level, starting in 2014. The cost is fully covered by the federal government until 2017, when states that expanded will have to start chipping in. By 2020, states will have to cover 10 percent of the cost.

In 2015, Alaska and Montana voted to expand their programs, bringing the total to 30 states and the District of Columbia.

Alabama Gov. Robert Bentley received a recommendation from the Alabama Health Care Improvement Task Force in November to expand the program and says he's considering his options. Democrat John Bel Edwards, the governor-elect in Louisiana, has executive authority to expand Medicaid on his own but says he doesn't want the state to rush into it.

Hoping to avoid political pushback from conservatives for choosing to take advantage of a health care law that's unpopular in Republican states—and from liberals and the health care industry, who want to go farther and faster in letting families get federal subsidies to help pay for insurance—some governors are trying to cut deals with the Centers for Medicare and Medicaid Services (CMS) to devise plans that stray from the original model. The federal agency must sign off on state Medicaid expansion plans.

Republican South Dakota Gov. Dennis Daugaard is exploring how his state can shift to the federal government the cost of serving Medicaid-eligible Indian Health Service (IHS) patients who go to non-IHS facilities.

In Arkansas, Republican Gov. Asa Hutchinson is working with his Legislative Task Force on Healthcare Reform to retool Medicaid expansion already underway in the state. Under its current program, which expires at the end of 2016, Arkansas buys private health insurance for residents who qualified for Medicaid. Hutchinson says he's hoping waivers from CMS will give the state more room to be creative in how it runs its program.

In Kentucky, new Republican Gov. Matt Bevin says the state—long lauded as a model for the federal health care law's success in getting people signed up for coverage—is looking at waivers to get more flexibility in how it serves 400,000 low-income residents insured under the Medicaid expansion.

Meanwhile, Republican Utah Gov. Gary Herbert will be working with his legislature again to come up with a middle ground on Medicaid expansion. Herbert and the GOP-led legislature have tried three times to pass expansion but to no avail,  as neither the House or Senate could agree on a plan.

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