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The Politics Of Medicaid Expansion And Obamacare Repeal

With the midterms looming, Obamacare politics are again prominent. But some Republican candidates find themselves defending that law.

With midterm elections looming, the politics of Obamacare are again coming to the fore—only this time it’s not just Democrats making the case that the law’s Medicaid expansion is good but also some leading Republicans, chief among them Ohio Gov. John Kasich.

This week Kasich staked out the rather untenable position that Congress should repeal Obamacare but keep the Medicaid expansion part, as if they’re two different things. “From Day One, and up until today and into tomorrow, I do not support Obamacare,” Kasich said Monday, then added: “I don’t really see expanding Medicaid as really connected to Obamacare.”

Recall that Kasich bypassed his state’s Republican-controlled legislature last year to expand Medicaid, invoking his Christian faith and musing that when St. Peter asked what you did for the poor, you “better have a good answer.” His answer, presumably, will be that he helped the poor by taxing the people of Ohio and trapping the poor in Medicaid, a deeply dysfunctional program that provides the worst health coverage in the country and the expansion of which is a major feature of Obamacare.

It would be possible—and easier, in fact—for Gov. Kasich to argue that reducing Medicaid enrollment is more compassionate in the long run.

Still considered a potential contender for the Republican nomination in 2016, Kasich now finds himself in position that requires both defending his Medicaid expansion and condemning the increasingly unpopular healthcare law. Either he’s woefully ignorant about Obamacare, or he knows he’s being disingenuous but has chosen to defend Medicaid expansion because repeal would mean kicking thousands off the Medicaid rolls in Ohio.

Too bad for Kasich. It would be possible—and easier, in fact—for him to argue that reducing Medicaid enrollment and restricting the program to the groups it was originally meant to serve—the frail elderly, poor pregnant women and infants, the disabled—is more compassionate in the long run. It would also give him a chance to make the case that expanding entitlements harms the poor by disincentivizing work and condemning them to second-class healthcare while benefiting large hospital systems and Medicaid managed-care companies.

Choosing Politics Over Helping the Poor, Yet Again

Alas, it’s probably too late for Kasich, but Republican leaders will need to get this right if they want to bill themselves as conservatives. In a televised debate last week against his Democratic challenger, Sen. Mitch McConnell called for “pulling out Obamacare, root and branch”—but then said it would be okay if Kentucky’s relatively successful health insurance exchange, Kynect, continued. Of Medicaid expansion, which Kentucky’s Democratic Gov. Steve Beshear opted into last year, McConnell simply said: “The states can decide whether to expand Medicaid or not. In our state, the governor decided to expand Medicaid.”

Mitch McConnell’s version of repealing Obamacare ‘root and branch’ is more of a pruning.

In other words, McConnell’s version of repealing Obamacare “root and branch” is more of a pruning. He apparently doesn’t have an opinion about the exchange, or his state’s decision to expand Medicaid—both of which are pillars of Obamacare. The Washington Examiner’s Phil Klein called McConnell’s position “incoherent,” and in a sense it is. How can you support repeal but claim indifference about the exchange?

On the other hand, as Avik Roy of Forbes noted, technically it would be possible to retain a state-based exchange while repealing Obamacare, although the exchange “would be meaningfully different than those under Obamacare.” Namely, the exchange would function under the sole authority of the state, which would reassert its traditional role in regulating—and perhaps, now, subsidizing—health insurance.

Maybe McConnell knows this, maybe not. It’s possible that his attempt to make a distinction between Obamacare and Kentucky’s exchange reflects a highly nuanced policy view of how to reform the law, but it’s more likely that it reflects a political conundrum some Republicans feel they now face: how do you call for repealing a law that’s ostensibly covering millions of Americans?

For McConnell, maybe it’s enough to shift responsibility onto state leaders. Kasich, however, must treat Medicaid expansion as something completely separate from Obamacare, which it manifestly is not, and try to dismiss opposition as “either political or ideological.” Some contend that Kasich isn’t as incoherent as he seems—that you can be in favor of repeal but also support states expanding Medicaid. That’s true, strictly speaking, since various expansions of Medicaid have been tried over the years in red and blue states alike. And it’s true that few Republicans support keeping Medicaid as it is. But that’s not what Kasich is talking about; he’s talking about Medicaid expansion under Obamacare, and trying to pry the two apart.

Republicans: The Party of Obamacare Lite

Other Republican presidential hopefuls will also likely try this, like Indiana Gov. Mike Pence. His proposed Medicaid expansion would build on the current Healthy Indiana Plan, which funds health savings accounts for certain Medicaid enrollees, and create “HIP 2.0″—essentially the same program but extended to the expansion population, with more benefits and larger taxpayer-funded HSA contributions for those who deposit a nominal amount of their own funds each month. Pence has touted his “consumer-driven” proposal as a conservative way to expand Medicaid in the belief that such a thing is possible. A close examination of his plan shows that it is not. In fact, a close examination of all the Republican expansion plans to date reveals that truly conservative Medicaid reforms are incompatible with Medicaid rules as promulgated by the Center for Medicare and Medicaid Services. That hasn’t stopped Pence from making his case, although it’s possible he proposed a plan he knows he administration will reject just so he can say that he tried.

A close examination of all the Republican expansion plans to date reveals that truly conservative Medicaid reforms are incompatible with federal Medicaid rules.

Unfortunately for Kasich and all the other Republican governors who already took the plunge and expanded Medicaid, the data is hard to dispute: Medicaid expansion is driving Obamacare coverage. This week, the Heritage Foundation released a report detailing coverage gains under Obamacare, showing that out of the roughly 8.5 million Americans who gained coverage under the law, 6.2 million come from Medicaid expansion. Of the 2.4 million who gained private coverage, nearly all of them were previously insured, which means Obamacare’s coverage of the uninsured has thus far been almost entirely a result of Medicaid expansion.That won’t be how the administration talks about the numbers, but many Republican voters will be well aware of the connection between Medicaid expansion and Obamacare come 2016, in part because plenty of potential GOP contenders will use expansion as a cudgel against their rivals.That will be a problem for governors like Kasich and Chris Christie in New Jersey. They no doubt believe the issue cuts both ways, and reason that the longer Obamacare is in place the more difficult it will be to repeal. After all, who will pledge to tear out Obamacare “root and branch” if it means stripping 25 million poor Americans of Medicaid coverage?

Yet that’s exactly what a truly conservative candidate should pledge. Let Kasich make his case against someone who refuses to accept the premise that Obamacare’s Medicaid expansion is a positive good, that massive government entitlements really help the poor, and that such policies ought to be a permanent feature of American life. Let him do that. It’s a debate Americans need to see, and that conservatives need to win.

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