Told You: Watch Out for Medicaid Expansion


On November 13, I noted that there were renewed calls for Medicaid Expansion here in Wyoming. Three neighboring states passed expansion measures on their November ballots, which prompted the Casper Star Tribune to public a long article favoring the same here in Wyoming. In an analysis of their pro-expansion argument I concluded:
Hopefully, there will be enough common sense summoned in the legislature to stop Medicaid expansion from happening. Our health care system here in Wyoming is dependent enough on tax-paid health insurance as it is; any expansion would effectively socialize our health care system. This is an under-appreciated issue. More to come.
Never bark at the Big Dog. The Big Dog is always right. Behold today's Wyoming Tribune Eagle:

Departing Gov. Matt Mead predicted there will more appetite among legislators to expand Medicaid in Wyoming in the coming years, as efforts to repeal and replace the Affordable Care Act sputter. “As long as the ACA continues to stay on the books, I think the appetite looking at it will be more than it has been during my term,” Mead told reporters at the Star-Tribune earlier this week. Early on in his tenure as Wyoming’s governor, Mead had opposed expanding Medicaid and had even joined a lawsuit against the ACA, or Obamacare. But after that lawsuit failed, Mead changed positions and began to advocate for broadening the program and allowing more low-income Wyomingites to join the state rolls.
It will be up to the Matt Mead biographers to explain why the governor changed his mind. At this juncture, it does not matter. What matters is that he brought Medicaid Expansion back to life. He had reasons for doing so, and it is not inconceivable that one of them is growing support for it in the legislature. It remains to be seen whether or not that is true, but the Republican Obamacare repeal debacle has not exactly eased the pressure on states to pass Medicaid expansion. Obamacare still holds the private health insurance market in a stranglehold, steadily pushing premiums upward and increasing demand for subsidies. The repeal of the fine for not having coverage is not going to make any material difference, other than dumping more people into Medicaid.

Which brings us back to Wyoming. Our state's uninsured population increased from 2016 to 2017, from 67,000 to 70,000 residents without coverage. We were told, of course, that Obamacare would eliminate the problem of no coverage, but since that has not happened there will be renewed calls for Medicaid Expansion.

So far, it sounds like this idea will be a hard sell with Governor-Elect Gordon, of whom the Tribune Eagle reports:
But his soon-to-be successor, Mark Gordon, has said he does not support Medicaid expansion, even after three nearby conservative-led states — Nebraska, Idaho and Utah — all passed ballot measures authorizing expansion. Gordon has said it is not the right solution for Wyoming and has pointed to Kentucky — which is in a state Medicaid deficit — as evidence that the expansion does not work everywhere.
He better hold the line. It is not just Kentucky that is in deep trouble thanks to Medicaid Expansion. From the Bond Buyer (subscription required):
The term-limited LePage, a Republican who will be replaced in January by Janet Mills, a Democrat, has fought the Medicaid expansion since voter approval last year argument that implementation would cause fiscal stress to the state from adding an estimated 70,000 to 90,000 more people into the program. The Republican vetoed  a bill in June to fund Medicaid expansion with surplus monies and tobacco settlement funds. 
Back in June, incumbent Maine Governor LePage proposed a tax on hospitals to pay for Medicaid Expansion. In November, Montana voters rejected a tobacco tax increase to fund the same program. 

The Wyoming Tribune Eagle does not see a funding problem for our state:
If Wyoming were to expand the program, it would cover 10 percent of the added cost. The remaining 90 percent would be covered by the federal government. In September, Wyoming Health Department Director Tom Forslund told the Star-Tribune that had Wyoming expanded in 2012, it would’ve received $577 million from the federal government and more than 20,000 people would’ve qualified for care.
That is, so long as the federal government keeps sending checks. With the budget trajectory pointing to trillion-dollar deficits in the next couple of years, and the U.S. credit rating steadily remaining where it was after the downgrades under Obama, it is going to be exceedingly difficult for Congress to keep all its spending promises. 

Medicaid Expansion will be among the first to hit the chopping block, leaving the states to pick up the tab.

However, even without inevitable problems at the federal level, Medicaid Expansion still costs us money. That is why other states are struggling to pay for it, and trying to raise taxes. 

What tax would proponents like to raise here in Wyoming, in order to pay for Medicaid Expansion?

This question will not go away. As the Tribune Eagle notes, Governor
Mead predicted the political winds may shift in Wyoming. During the Obama administration and first year of the Trump administration, Republican candidates and politicians called for the ACA to be repealed and replaced. After months of throwing proposals against the wall in 2017, the GOP-controlled Congress was unable to completely torpedo the sweeping health law. Mead predicted that as the ACA becomes more accepted as the law of the land, it will prompt Wyoming lawmakers — the vast majority of whom have showed zero interest in expansion — to more seriously consider the proposal.
Unfortunately, he is right. We can craft our own solutions here in Wyoming, but it will take leadership the like of which we have not yet seen. It will take a governor who can stake his career on returning Wyoming to free-market health insurance, as well as free-market health care. Likewise, it will take legislative leaders with a lot of integrity and determination. 

Once that is in place, though, we could definitely see some constructive, market-driven reforms. Wyoming could lead the country by setting an example to other states. 

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