States' Medicaid Expansion Fraught With Political Consequences

States are facing complex choices about whether to expand Medicaid coverage since it’s their call now and they will not be forced to do so under the health reform law. Governors must weigh whether they should extend Medicaid coverage to millions of uninsured, even with initial 100 percent federal funding, at the same time that their budgets are still reeling from the effects of a weak economy and limited revenues.

The decision carries significant political consequences for states that have Republican governors, GOP-led legislatures, or potential changes that will result from the imminent elections. For some states, it may be more pragmatic to straddle the fence on Medicaid expansion until the elections and their aftermath play out. The states that will participate in the expansion so far are led by Democratic or Independent governors. 

Until the Supreme Court ruled on the health reform law in June, state executive and legislative branches tangled mostly on the health insurance exchange question. Now that Medicaid expansion is an option, state legislatures are going to have a voice in that as well, said Matt Salo, executive director of the National Association of Medicaid Directors.

“Now we’ll be looking at questions about Medicaid expansion, whether to opt in or opt out. It becomes very relevant if the executive and legislative branches can’t agree,” he said at a recent conference sponsored by the Bipartisan Policy Center.