Some States Reluctant Over Medicaid Expansion

Washington – Millions of poor people could still be left without medical insurance under the national health care law if states take an option granted by the Supreme Court and decide not to expand their Medicaid programs, state officials and health policy experts said Friday.

Republican officials in more than a half-dozen states said they opposed expanding Medicaid or had serious doubts about it, even though the federal government would pick up all the costs in the first few years and at least 90 percent of the expenses after that.

While upholding the most hotly debated part of the health care overhaul law — a requirement that most Americans have health insurance or pay a penalty — the Supreme Court said in its ruling on Thursday that states did not have to expand Medicaid as Congress had intended — leaving a huge question mark over the law’s mechanism for providing coverage to 17 million of the poorest people.

In writing the law, Congress assumed that the poorest uninsured people would gain coverage through Medicaid, while many people with higher incomes would receive federal subsidies to buy private insurance. Now, poor people who live in a state that refuses to expand its Medicaid program will find themselves in a predicament, unable to obtain either Medicaid or subsidies.

That potential gap will probably lead to ferocious statehouse battles in the coming year, as states weigh whether to accept billions of dollars in federal aid to pay for expanded coverage. The health care industry, sensing the skepticism in some states, is preparing a campaign to persuade state officials to accept the money for coverage of the uninsured.

But already, governors in Kansas, Nebraska and South Carolina, among other states, have said they would have difficulty affording even the comparatively small share of costs that states would eventually have to pay.

Gov. Dave Heineman of Nebraska, a Republican who is chairman of the National Governors Association, indicated that he was against expanding Medicaid eligibility.

“As I have said repeatedly, if this unfunded Medicaid expansion is implemented, state aid to education and funding for the University of Nebraska will be cut or taxes will be increased,” Mr. Heineman said.

In South Carolina, Rob Godfrey, a spokesman for Gov. Nikki R. Haley, said, “We’re not going to shove more South Carolinians into a broken system that further ties our hands when we know the best way to find South Carolina solutions for South Carolina health problems is through the flexibility that block grants provide.”

In New Hampshire, State Representative Andrew J. Manuse said he and other Republicans were already working to block the expansion of Medicaid. “We can’t afford it,” Mr. Manuse said. “It’s as simple as that. Thank God the Supreme Court gave us an option.”

Obama administration officials played down such concerns. Michael Hash, a senior official at the federal Department of Health and Human Services, said he believed that all states would eventually decide to expand Medicaid. Democratic governors like Pat Quinn in Illinois and Christine Gregoire in Washington welcomed the opportunity to help more of their constituents through Medicaid.

Republican governors in Wisconsin and Louisiana said they would wait to see the results of November’s elections before deciding whether to expand Medicaid, in the hope that Mitt Romney will be elected president and undo the health care law. “That’s why we have refused to implement the Obamacare health exchange or the Medicaid expansion,” said Gov. Bobby Jindal of Louisiana.

Under the law, subsidies are available to people with incomes from the poverty level up to four times that amount, but not to people with incomes below the poverty level ($23,050 for a family of four).

The federal government would initially pay all the cost of expanding Medicaid to 133 percent of the poverty level. The state share would slowly rise to 10 percent of the cost by 2020.

“Because the expansion is such a good deal for states, they should move forward and cover low-income adults in their states,” said Judith Solomon, a health policy analyst at the Center on Budget and Policy Priorities, a liberal-leaning research and advocacy group. “But what happens in states that do not go ahead and provide coverage? The poorest adults — primarily parents and other adults working for low wages — will be left out in the cold.”

While states typically leapt at such offers of federal largess in the past, a growing number of Republicans have declined federal aid in recent years — turning down billions of dollars in federal money to build railroads in Wisconsin, Ohio and Florida, for instance, and initially balking at accepting some of the money in the 2009 stimulus law.

In Ohio, where Gov. John R. Kasich has expressed concern about the added health care costs, officials said that they were anticipating higher Medicaid expenses quite apart from the expansion in eligibility. The new requirement for people to have health insurance, they said, could bring several hundred thousand people who are already eligible for Medicaid into the state’s program, at a cost of $940 million in the first two years.

Lt. Gov. Mary Taylor, a Republican who is director of the Ohio Department of Insurance, said in an interview that even though the federal government would pick up all of the costs in the first few years of expanded coverage, “our concern is we can’t make decisions for the short term.”

And in New Jersey, Gov. Chris Christie, a Republican, called the ruling giving states the choice of whether to expand Medicaid “a ray of sunshine in an otherwise cloudy day.”

Another Republican governor, Phil Bryant of Mississippi, also cast doubt on the expansion, saying. “I would resist any expansion of Medicaid that could result in significant tax increases or dramatic cuts to education, public safety and job creation.”

Health care providers who treat low-income patients strongly support the expansion of coverage.

Richard J. Umbdenstock, the president of the American Hospital Association, said that hospitals around the country would lobby for the Medicaid expansion. “If states do not avail themselves of this opportunity,” he said, “the federal money will go to other states, and hospitals will be left with large numbers of the uninsured.”

Nancy M. Schlichting, chief executive of the Henry Ford Health System in Detroit, said she “absolutely will lobby” for the expansion of Medicaid. She said she expected Gov. Rick Snyder, a Republican, to support the expansion, but she added, “he may have trouble” getting it through the Michigan Legislature.

Congress has repeatedly expanded Medicaid in the last 25 years, and states often had new sources of revenue, like money from the settlement of lawsuits against major tobacco companies. “But this time is different,” said Dennis G. Smith, secretary of the Wisconsin Department of Health Services. “Virtually all states are struggling to sustain their current Medicaid programs.”

Illinois, facing severe financial problems, has already delayed Medicaid payments to some health care providers.

“Many hospitals are not being paid for six months or more after they provide services and file claims,” said Danny Chun, a spokesman for the Illinois Hospital Association. “Illinois is dead broke.”