Governors are increasingly embracing a key part of President Obama’s health law by expanding their Medicaid programs — but they are using the law as a bargaining chip to try to win more flexibility for how they run their own state programs.
For years, governors and legislatures have asked for more leeway in Medicaid, which is the federal-state health program for the poor.
Now, with Mr. Obama eager to see states expand their programs as part of his health law, governors are using that leverage.
In Florida, Republican Gov. Rick Scott announced he would accept an expansion of Medicaid, but only after he won waivers from the federal government to privatize the system through managed-care organizations.
Then this week Arkansas, led by Democratic Gov. Mike Beebe, paved new ground when the Health and Human Services Department said it can offer insurance to Medicaid users through the state-based “exchange,” which will provide private insurance to consumers under Mr. Obama’s law starting in 2014.
“I think more and more states are finding the parameters that make it more palatable to them,” said Matt DeCample, spokesman for Mr. Beebe.
He said Mr. Beebe is hoping the approach will convince his state’s legislature to sign off on the expansion, since the private insurance option should usher in a better standard of care and the Arkansas constitution requires the blessing of a “supermajority” — 75 percent of state lawmakers — to appropriate funds.
An HHS official confirmed Thursday that Department of Health and Human Services Secretary Kathleen Sebelius supported Mr. Beebe’s idea, noting the agency’s goal in working with states is “to be as flexible as possible within the confines of the law.”
The 2010 Affordable Care Act was written to require states to expand their Medicaid coverage, in exchange for more federal funding. But the Supreme Court ruled that states could have the option of expanding.
Twenty-six states have opted to expand the program, 18 are declining at this point and six are undecided, according to a decision-tracker from the American Action Forum.
Eight Republican governors have drawn heat for opting to expand the program, breaking ranks with a party that widely sees cooperation with Mr. Obama’s law as a job for their Democratic counterparts.
Some governors who chose to expand their programs have built in safeguards, such as saying they would drop back to pre-Affordable Care Act levels of coverage if the federal government reneges on its promise to cover 100 percent of the expansion through 2016, and 90 percent in 2020 and thereafter.
In Virginia, Gov. Bob McDonnell has said he doesn’t want to expand Medicaid under Mr. Obama’s law, but will use the moment to foster reforms to the program on both the state and federal levels.
Democrats in the state legislature reportedly withheld support for Mr. McDonnell’s transportation funding bill last week until there was movement on a potential Medicaid expansion, but the governor viewed the issues as mutually exclusive.
The state’s legislature established a 10-member commission to explore possible routes to Medicaid reform.
“Unless we maximize the concessions from the federal government in obtaining those reforms prior to considering any specific expansion, our cost savings opportunity will be lost,” Mr. McDonnell said in a recent letter to lawmakers. “We have one chance to do this right.”