Senators push to let states opt-out of Medicaid expansion

September 28, 2011 @ Bailey McCann  CivSource

States may be able to opt-out of expanding Medicaid coverage if two Senators have their way. Senators Lindsey Graham and John Barrasso introduced a bill last week designed to provide ‘Medicaid flexibility,’ for states. The Senators argue that Medicaid is a drag on state budgets and plans to expand the program under federal health care reform legislation will only exacerbate the problem.

17 million new people will be eligible for Medicaid by 2014 under health care reform. According to the Senators, expanding eligibility will only add to the financial burden already on state governments and they should be allowed to opt-out of the expansion of the program.

“I’m confident that if given the chance a large number of states would opt-out of Obamacare’s forced Medicaid expansion,” said Graham in a statement. “In South Carolina, expansion of Medicaid under Obamacare will add an additional $1 billion in state matching funding requirements. When fully implemented nearly 30 percent of South Carolinians will be eligible for Medicaid. States like South Carolina can simply not afford this burden.”
While, eligibility for a program is no guarantee that an individual will choose to join the program, the Senators feel even the option is too much. Senator Barrasso argues that increasing the state matching requirement will force states to pull money from other programs in order to meet these new requirements.

Critics of the bill in Congress say that letting states opt-out does nothing to address the problem of health care access for children and low-income individuals. In the Graham’s home state, nearly one in four people are on Medicaid now, many of them children. Even though federal health care reform legislation will open the insurance market overall, many people still do not earn enough from their jobs to afford insurance. Medicaid is there to provide access for these people and children.

The uninsured population in South Carolina grew from 16.8 percent in 2009 to 20.6 percent in 2010, according to the U.S. Census. As currently written, the bill offers no alternative solutions for the problem of access to health care for the working poor. There are no provisions for free clinics or other access to health care for individuals who would be eligible for Medicaid under the expansion.

The lack of alternatives makes the bill unlikely to advance in Congress, despite support from governors like Nikki Haley, who called the expansion a “disaster for South Carolina’s budget.” However, the bill has sparked some debate over the cost of health care for low-income populations – a bracket of individuals which is growing as the recession deepens throughout the US. Some states are trying to keep costs down by cutting reimbursements to health-care providers but these and measures like Graham’s do little to get at the core issues of health care costs, individual incomes and the growing US jobs crisis.