The Top 5 States Most Likely to Expand Medicaid Next

Sept. 02--Last week's news that Pennsylvania, one of the biggest remaining Republican holdouts, was expanding Medicaid under the Affordable Care Act with some -- but far from all -- of its requested conservative changes is prompting questions about which state will be next.

At this point, 27 states are including all adults earning up to 138 percent of the poverty level in their Medicaid programs, which have always served the poor but have typically only included the disabled, the impoverished elderly, pregnant women and some people with families. Among those, nine have Republican governors: Nevada, Arizona, New Mexico, Iowa, North Dakota, Ohio, Pennsylvania, New Jersey and Michigan. In five of those states Republicans control both the legislature and the governor's mansion: Arizona, North Dakota, Ohio, Pennsylvania and Michigan.

It wasn't until 1972, seven years after Medicaid became law, that every state except Arizona signed onto the program, which is run jointly by states and the federal government. (Arizona followed in 1982.) Following a wave of states endorsing the expansion in 2013, the more recent additions -- all in Republican-dominated states -- have been slower to come. That's because of strong political headwinds against Obama administration initiatives, opposition to greater public spending and skepticism over whether the federal government can maintain its promise of at least 90 percent support of the Medicaid expansion.

Most of the more recent additions to Medicaid expansion have been more conservative states that worked out special arrangements, or waivers, with the federal government to that guarantee recipients pay more for their care or that they go through the private insurance market. There are varying degrees of interest among holdout states, which are all either under split party rule or total GOP control.

But if state-level debates are any indication, passing Medicaid expansion has to come with strong gubernatorial support. In some cases, that support has to overcome significant opposition from legislators, who represent much smaller and more ideologically homogenous places than state-wide officials. There are several prominent examples of states that fall into the category of places where gubernatorial support is strong but opposition remains entrenched in the legislature, including Virginia, Tennessee, Utah, Missouri, Montana and Florida.

In others, including North Carolina, there's at least nominal support for the idea but an insistence on overhauling the existing program first to get control over spending. That places the state in the category of those that could conceivably expand the program, only years from now.

But which states are most likely to act in the next six months or a year from now?

1. Indiana, governed by a Tea Party favorite and a Republican legislature, is already negotiating a waiver with the federal Centers for Medicare and Medicaid Services. That makes it the most likely to expand next, because Gov. Mike Pence doesn't appear to be facing a credible political challenge from within his own party. The state wants to push even greater costs to enrollees than the federal government has agreed to so far, with monthly contributions for those under the federal poverty level. Considering the state's proposal builds on an existing waiver program for the poor and Indiana has already been talking with the federal government for months, it's among the most likely to expand next.

2. Wyoming is currently talking to the federal government about a possible deal. In this case, it appears to be based on budgetary considerations -- the state's health department has concluded the existing program needs another $80 million in the coming years, but expanding Medicaid would cover that hole with federal money while saving state coffers $50 million. State lawmakers again this year rejected Medicaid expansion, but they also told Republican Gov. Matt Mead to explore the best possible deal with the federal government. He's expected to report back in January. Recently he told the Associated Press that he's concerned the federal government won't live up to its financial obligations, but "I juxtapose that against our hospital association saying we're handing out $200 million every year just in Wyoming."

3. Utah, also under GOP control, is also already negotiating with the federal government. What makes the state less likely than Indiana to expand is its insistence on tying Medicaid coverage to active employment or at least an active search. Many Medicaid experts say existing law doesn't allow federal officials to link health coverage to work requirements, and so far they've refused to grant a similar request from Pennsylvania, which eventually scrapped its work-search idea. Dropping the job requirements might not be a deal-breaker for Gov. Gary Herbert, according to his officials, but the state's House speaker strongly opposes any expansion that relies on federal money, much less one that doesn't come with work requirements.

4. Utah helps illustrate the extent to which governors face uphill battles in their legislatures. The remaining near-term potential expansion states further underscore those challenges. Tennessee, another state under lockstep Republican control, has a much-admired Medicaid program that's already privatized and boasts enviably low annual spending growth rates. That makes Republican Gov. Bill Haslam's entreaties to his legislature for expansion a slightly easier political sell. If a statement from the Senate majority leader last week is any indication, however, he has serious opposition to win over. Senate Majority Leader Mark Norris took offense to Haslam's recent announcement that he soon plans to submit a more conservative proposal for Medicaid expansion because the governor hasn't shown the plan to the legislature, which has final authority over expansion.

5. Virginia is perhaps the more unlikely expansion state of this group because of its political dynamics. The state's Democratic governor, Terry McAulliffe, supports Medicaid expansion. There also appears to be enough support in the Senate between Democrats and a small number of Republicans, who narrowly control the chamber. But the House strongly opposes expansion and has bristled at McAulliffe's efforts to expand health for the poor by circumventing the legislature or through some other means -- he hasn't said exactly how he'll do it, and Republicans insist unilaterally expanding the program is unconstitutional. Still, McAullife is expected to elaborate on his plan any day now.

Chris Kardish -- Staff Writer

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ckardish@governing.com -- @ckardish

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