Stopping Medicaid Expansion In Its Tracks

Amendment makes bill match proponents' claims

Some political observers are marveling that none of the House Republicans who voted against the Obamacare Medicaid expansion, and none of the Senators who say they will oppose it in the Senate, did not or do not plan to offer one simple amendment that would make the bill actually live up to its proponents' claims.

That amendment would stop the expansion from proceeding until after the federal Department of Health and Human Services has approved a waiver allowing the reforms specified in the bill.

The bill that passed the House and is pending in the Senate has this exactly backward: First Michigan starts taking and doling out the federal expansion dollars, and sometime later it either does or does not receive a federal waiver allowing the reforms.

Without this provision, the current bill’s "reforms" are primarily a cover story for Republicans who vote for the expansion. That cover story also depends on people believing a completely non-credible provision that the state will rescind the expansion later if the waiver is not granted, or if cost savings specified in the bill don't come to pass.

These opt-out provisions aren't credible for two reasons. First, an opt out stands on very shaky legal ground, as explained by The Wall Street Journal in a piece titled, "New Medicaid's Roach Motel: The GOP flippers can check in, but it's unlikely they can check out."

Legalisms aside, here’s the more fundamental explanation for why the federal Medicaid expansion dollars won't stop once they start flowing: Politics. I explained this in a blog post last week:

Everyone in Lansing knows how this game is played. The federal expansion money will be rolling in, and in May 2016, under an entrenched Obamacare, the supposed ‘savings’ this legislation supposedly generates won't (meet specified amounts). Everyone will be shocked — shocked! — and the appropriations committee chairs will ask their colleagues, 'Are we going to leave nine federal Medicaid dollars on the table for an investment of just one state dollar?' Of course they won't.

That applies just as much to the waiver request. If the feds deny it, the Michigan Legislature will simply vote to keep the expansion going anyway, because legislators will have become addicted to the federal money, and because they fear the political price of taking away benefits that many people already will be receiving.

In short, requiring Michigan to have this waiver before the expansion can begin causes the bill to actually live up to the spin that pro-expansion House members are already dishing out, and that Senators are planning to dish.

Without this, the bill's supporters are exposed as further entrenching Obamacare, not because of some supposedly awesome reforms, but because of pressure exerted by a politically powerful special interest (the state's hospital establishment, which knows once the expansion dollars start flowing into their coffers the politicians won't pull the plug later).

An effort to make this or other other substantive changes to the bill could cause Republican legislative leaders to use procedural tricks to prevent recorded votes being taken. However, the political risks attached to such maneuvers could prove daunting.

But if legislators truly believe this bill's reforms are so great, why not hold off on the expansion until they know they can actually be implemented? Why not show the courage of of their convictions by demanding waiver approval first, before the expansion may proceed?

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.