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'Call me,' maybe, on Medicaid: HHS boss to governors

Sylvia Matthews Burwell
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Sylvia Matthews Burwell

The Obama administration's point woman on Obamacare isn't letting a little thing like Election Day distract her from urging states to expand Medicaid.

In fact, Health and Human Services Secretary Sylvia Mathews Burwell cited Tuesday's voting as she invited current governors and those about to be elected to meet with her soon to talk about how their states can make many more poor residents eligible for Medicaid.

"Expanding Medicaid is one of my top priorities as secretary," Burwell said in prepared remarks at the National Association of Medicaid Directors' fall conference in Washington, D.C. "And I hope it will become a top priority for those of you who haven't yet expanded."

"So my message to governors is that 'if you're interested in expanding, call me,' " she said.

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"And to those governors who are about to get elected or re-elected today, my message is that 'I'm happy to meet with you before your inauguration.' We welcome conversations as we work together to move forward."

Burwell touted the fact that since last fall, an added 8.7 million poor people have been added to Medicaid or the Children's Health Insurance Program, "many for the very first time."

"And 7.5 million people live in states that have expanded Medicaid," she said. "If all states were to expand, millions of our fellow Americans would get covered."

Burwell's pitch reflects expectations that the outcome of gubernatorial races Tuesday could lead to an increase in the number of states that have expanded Medicaid beyond the current 27 states and the District of Columbia. Of the 23 states that haven't yet expanded Medicaid, 15 are holding elections for governor Tuesday.

The states of Florida, Kansas, Maine and Georgia, in particular, are being closely watched because a new governor could result in a move to expand Medicaid.

"This is a key election for the future of the Medicaid program," said Dan Mendelson, CEO at the Avalere Health in a report on the elections published by that consultancy last week. "Expansion will depend on both the outcomes of the governors' races as well as state legislative balance, as state legislatures often hold the keys."

The Obama administration for years has been lobbying for all 50 states to expand eligibility requirements for Medicaid, the health insurance program for the poor that is jointly run and funded by the federal government and individual states.

Who is covered by Medicaid has long depended on where they live. States have different income maximums for enrollees, and some states refuse to cover poor adults who don't have children.

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The Affordable Care Act, as written, was meant to compel all states to expand eligibility so that nearly all poor adults would get health coverage at no cost to them. The ACA also established that the federal government would fund 100 percent of the cost of insuring the newly eligible for the first three years, and that the funding would only decrease over time to 90 percent, significantly higher than the federal government's funding for traditional Medicaid enrollees.

Medicaid expansion was designed to complement the Obamacare exchanges in reducing the overall number of uninsured Americans. The exchanges sell health insurance plans to low- to moderate-income people with the help of federal subsidies to offset premiums and other costs to enrollees.

But the 2012 Supreme Court decision upholding much of the ACA said states could not be compelled by the federal government to expand Medicaid.

Many Republican governors thereafter refused to consider expansion, on grounds that included opposition to Obamacare, fears that the government would renege on its funding promises and objections to covering able-bodied adults.

Over time, however, pressure has increased in some nonexpansion states to accept Medicaid expansion, particularly from hospitals, which can significantly reduce the amount of unpaid bills they have from treating the indigent.

Burwell noted that a number of states, including Arkansas, Michigan and Iowa, since then "have also expanded in their own way"—with modified Medicaid expansion schemes—and that Pennsylvania will do so in 2015. Several Republican-led states, among them Indiana, Utah and Wyoming, are taking steps toward expansion.

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To bolster her pitch, Burwell pointed to a Kaiser Family Foundation report last month that found expansion states expect slower growth in their overall Medicaid spending than their nonexpansion counterparts.

That report said that the 27 states expanding Medicaid along with the District of Columbia as of 2015 expect to see an 18 percent increase in enrollment and an 18.3 percent increase in total Medicaid spending on average, with the bulk of that new spending coming from the federal funds set aside for covering the newly eligible.

"With the additional federal dollars, state spending in expansion states is projected to increase at a slower rate of 4.4 percent in [fiscal year] 2015," Kaiser said.

"Without the coverage expansion and federal funding, the 23 states not implementing the ACA Medicaid expansion project an average 5.2 percent enrollment growth for fiscal year 2015 and project state spending to increase at a similar rate as their total Medicaid spending," that is 6.8 percent and 6.5 percent respectively, Kaiser said.