Yep, Republican Governors are Firing Blanks on Medicaid

Just as I predicted, the health care provider industry isn't so keen on GOP governors turning down gobbles of Medicaid dollars under the upcoming expansion that is part of the Affordable Care Act. Gov. Rick Scott of Florida made a big stink about how he would reject the Medicaid expansion that would cover every Floridian (and American) that makes up to 133% of the federal poverty level. For the first three years, the expansion is 100% covered by federal dollars, and in subsequent years, the federal share of the expansion is 90%.

There are governors, like Rick Scott of Florida and Rick Perry of Texas (what the hell is up with these Republican Rick's anyway?), that opened up their political pie-hole and put up a brave face that they would fight the expansion by rejecting it for their states. How's that going?
 A battle is brewing here in Florida, where Gov. Rick Scott took to national television soon after the ruling to announce that he would reject the expansion. Advocates for the poor and some players in the health care industry — especially hospitals — intend to push back.
Oops. I guess Rick Scott's thick skull never saw that one coming. You see, one of the geniuses of Obamacare is that President Obama got up-front concessions from the hospital industry and other providers to cut their rates (yes, big, freaking, huge deal). They made those concessions, though, assuming that whatever money they would lose making those rate concessions, they could more than make up by the significant uptick in new clientele resulting from the massive coverage expansions in the Affordable Care Act.

If a state doesn't accept the Medicaid expansion, their hospitals and health care providers are screwed. They can't back out of the cuts they already accepted, and they would still have to provide uncompensated emergency room care for people who don't have insurance but could have easily been covered by Medicaid. Without Medicaid, the hospitals lose a huge way to recoup their costs. Not to mention, those who would be covered by Medicaid could go get their regular checkups, so that they wouldn't show up in emergency rooms with a burst vein due to high blood pressure that would have otherwise been treatable. So the Medicaid expansion wouldn't just make sure care provided is paid for, it would also reduce the need for emergency room care, the most expensive kind of care.

The health care provider industry might like their Republicans in election years, but they are in no mood to lose gazillions of dollars because of the idiocy of those same Republicans. I have a funny feeling that while these governors are pontificating, the hospital and provider lobbies are reading their Republican legislatures the Riot Act.
Despite the governor’s statements, leaders of the Republican-controlled state Legislature have not outright rejected the expansion, saying they will study their options over the coming months before making a decision.

“At the end of the day, we are going to take a rational approach that reflects the interests of Floridians, protects their hard-earned tax dollars and uses common sense, ” said Representative Will Weatherford, the incoming House speaker.
Translation: Rick Scott, not so fast, dude, not so fast. Should the heat get turned up enough, it's more than possible that Republicans will join the Democrats to accept the Medicaid expansion, and if needed, do so through overriding a gubernatorial veto.

There is another player in all of this though, and they are eerily quiet. I'm speaking about health insurance companies, of course. I am going to bet you anything that they will not put up a counter-lobbying operation for states to try to reject the Medicaid expansion. Why? Think about what type of populations are likely to be covered by the Medicaid expansion - at the beginning at least. People who haven't been able to afford insurance because of their low income. Which means that many of them have health problems that haven't been addressed, and are generally sicker than the population at large. In insurance speak, that's a high risk population. Insurance companies don't want it to stay that way for two reasons.

First, hospitals factor the cost of uncompensated care into the reimbursement rates for private insurance companies they bill.

Second, and more importantly, remember that if a state were successful in rejecting the Medicaid expansion, the people who would otherwise be covered by that expansion would still be eligible to go to the exchange and buy insurance, and they would be eligible for the tax credits/subsidies. This means that insurance companies would have to sell to them, while not being able to charge them more (because of community rating requirements in the ACA). Which would mean a lower margin for them.

Do you think insurance companies want that? There's no way. They want Medicaid to take the poorer and sicker populations purely from a self-interest point of view. So of course, there's no love coming from them the way of these wayward governors.

At this point, Rick Scott, Rick Perry and their small cadre of cohorts are pretty much out in the train station, and the train's left. They can pout and cry and bitch and moan, but they can't stop the Medicaid expansion. They can huff and puff in an election year, but they have no friends - not even their own legislatures - who will help them "fight Obamacare." A fully public program is going to cover every single American living at or near poverty, and there is nothing the Republican governors can do about it.