Republicans Struggle To Balance Conflicting Interests In Health Care Reform

Now that Republicans have control of the legislative and executive branches of the federal government, Congress is working to repeal and replace the Affordable Care Act (“ACA”), which allowed many states to expand Medicaid coverage.  As a result, creating an appropriate health care replacement requires Republicans to balance the interests of states that expanded Medicaid under the ACA with states that did not.  Congress will be hard-pressed to find a solution to address the needs of both groups.  Various ideas have been discussed by Republicans, including block grants and increasing state control

Republican Governors from Massachusetts, Michigan, Ohio, Arkansas, and Nevada are warning of the dangers repealing the ACA without an adequate replacement may cause.  Ohio governor John Kasich expressed concern for the 700,000 people now covered by Medicaid in Ohio, asking, “What would happen to them?”  Thirty-one states accepted the Medicaid expansion, 16 of which are run by GOP governors; leaving these states without a viable replacement to the ACA would cause millions of citizens to lose coverage.

While formulating a replacement is a slow process, Republicans have supported a few ideas in their discussions, one of which is greater state autonomy in tailoring their Medicaid programs to their specific needs.  While some GOP governors agree that greater state autonomy would allow them more flexibility to address their states’ individual problems, the question remains as to what is to be done to balance the interests of states that accepted the Medicaid expansion with those that did not.  Governors that accepted the Medicaid expansion do not want to see a reduction of federal Medicaid funding that would cripple their state's’ ability to fund Medicaid for their expanded pool of recipients.  On the other hand, states that didn’t accept federal funding for Medicaid expansion are worried states that expanded may have a permanent advantage.  

With greater autonomy and flexibility in mind, Republicans have brainstormed a few ideas to implement in their repeal.  GOP leadership in Congress, along with some Republican governors, is supportive of a block grant to states, which allows the states to run their Medicaid programs with more flexibility.  Block grants, however, would cap federal aid, shifting more costs to the states.  Combined with the pressure to cover the millions of new enrollees in non-expansion states, limiting federal funding may overwhelm state budgets and limit the flexibility that these states seek.  For states that expanded Medicaid, capping federal funding would result in either a loss of coverage for many Medicaid recipients or a greater portion of the state budget allocated to covering remainder in cost.

Striking a balance between these states will be no easy because each governor is looking out for the interests of his or her specific state, a single option is unlikely to satisfy the needs of every state.  In a letter​ to House majority leader Kevin McCarthy, Massachusetts governor Charlie Baker proposed, “any changes should be rolled out gradually, and allow states to opt out of new requirements or keep existing programs.”  This would permit states to keep the parts of the ACA that work for them while allowing them to test out new innovations for improving healthcare in individual states.  For Massachusetts, this means keeping its mandate that all residents have health insurance.  

While Republicans move to dismantle the ACA, GOP governors seem unified in a call for more state autonomy in regulating healthcare in their states.  However, there is no unity as to the role of federal funding, leaving the fate of those on Medicaid uncertain for the time being.

Aaron Bengtson is a second year law student at DePaul University College of Law and a Fellow of the Jaharis Health Law Institute.  Aaron has a Bachelor’s Degree in Political Science from DePaul University.  He is expected to complete his law degree and certificate in health law in 2018.
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