‘A complete about face:’ Some Republicans change tune on Obamacare’s Medicaid expansion

Democratic governors in North Carolina and Kansas are set to take another run at expanding Medicaid next year — believing that arguments in favor of the Obama-era health insurance program are wearing down once-steadfast Republican opposition.

Neither governor will have an easy time: North Carolina lawmakers have come around to Medicaid expansion but can’t agree on a deal to enact it, while the GOP-led Kansas legislature remains skeptical. Proponents, however, believe a growing body of data on the program’s success in other red states has persuaded an increasing number of holdouts — and that the additional federal money that comes with expansion could tip the scales with lawmakers staring down a possible recession.

“All these years, we’ve been expanding our coalition of people who have begun to realize that this is an absolute necessity and that North Carolina is being foolish and deadly in refusing to expand Medicaid,” Democratic North Carolina Gov. Roy Cooper said in an interview. “This Republican legislature has fought Medicaid expansion every step of the way … They’ve done a complete about face over the last few months. They know it’s the right thing to do.”

The latest round of Medicaid expansion negotiations comes as states prepare for the eventual end of the Covid-19 public health emergency, which helped millions of people stay on Medicaid during the pandemic, and as nearly a third of rural hospitals are at risk of closure, two factors Medicaid experts believe could persuade conservative lawmakers.

In Wyoming, for example, some Republicans, worried about the state’s changing economy and hospital closures, are attempting to pass expansion legislation, which died last year after advancing in the state House but not the Senate.

The Affordable Care Act sought to lower the uninsured rate by expanding who is eligible for Medicaid with the federal government picking up most of the tab. But the Supreme Court ruled that states are not obligated to participate, and most Republican-controlled states refused to do so. Citizen-led ballot initiatives forced red states such as Missouri, Oklahoma and, most recently, South Dakota, to expand Medicaid, leaving 11 states without an expansion program.

Policy experts who closely follow Medicaid expansion efforts believe North Carolina has the best chance to be next, now that the state’s Republican legislative leadership is on board with the proposal after years of opposition.

“If there’s a person in North Carolina in public office who’s spoken more in opposition to Medicaid expansion than me, I would like to meet that person,” said North Carolina Senate leader Phil Berger, who is now pushing for Medicaid expansion. “I came to the position that expansion is something we should be in favor of and something we probably need to do.”

Still, legislation in North Carolina that would have expanded coverage to 600,000 people did not pass this year amid disagreements over changes to the state’s certificate of need laws, which regulate health care expansions and acquisitions, and allowing advanced practice registered nurses to practice independently — two policies Berger believes should be approved at the same time as Medicaid expansion. Cooper and Republican House leaders have said the issues are separate.

“Republican leadership continues to say to me that they support Medicaid expansion, that they want Medicaid expansion, and that it’s going to happen. I do believe them, but the longer we go, that inaction will show otherwise,” Cooper said.

In Kansas, Democratic Gov. Laura Kelly, fresh off winning a second term, is taking another swing at Medicaid expansion, which she pushed in each of her first four years.

Kansas appeared on the cusp of a deal in 2020 but talks broke down when the issue became entangled in a separate debate over abortion restrictions. The following year, Kelly proposed legalizing medical marijuana and using the tax revenue to pay for Medicaid expansion, which also failed. And in 2022, efforts similarly fell flat.

“There have been a handful of powerful legislators who have been able to really stop the progress of expansion over the years,” said April Holman, executive director of the Alliance for a Healthy Kansas, a group that supports Medicaid expansion. “I am hopeful that some of the political gamesmanship that was happening particularly during the pandemic — and even last session — will dissipate now that the election is over and we can get back to business.”

Will Lawrence, Kelly’s chief of staff, said the governor plans to introduce a bill in both chambers and tour the state talking about Medicaid expansion, which would cover 150,000 people. He said he’s “optimistic that we’ll get something done” with the governor entering her second and final term and Republicans less concerned about giving her political wins that would factor into a reelection campaign.

“Obviously there’s been a lot of opposition, but, at a certain point, there becomes a pressure or a feeling that there’s a need to do something on the members of both chambers. Leadership has to think about that,” Lawrence told POLITICO. “It’s really hard when you’re a legislator and you’ve got the governor in your district talking about an issue that’s important to a lot of people in your district — especially in rural places where hospitals are closing.”

But to pass expansion, Kelly will have to overcome stalwart opposition from Republican legislative leaders, including Senate President Ty Masterson, and their veto-proof supermajorities.

“Laura Kelly won re-election with less than 50 percent of the vote because of a split in the Republican electorate who wants bold leadership like we’ve seen out of Florida and in other states,” Masterson told POLITICO. “Nowhere in the election was there a message to lurch to the left or grow government by expanding Obamacare and making people more dependent on programs.”

Legislative observers believe passing Medicaid expansion next year will likely take some sort of significant dealmaking between the governor and legislative leaders — though Lawrence said he didn’t have “a good answer at the moment” on what the governor would be willing to negotiate to get Medicaid expansion.

“Right now we know there’s not really a path to move forward because we’re in a similar place where we have been, really, with legislative leadership the same, and the governor the same,” said Cindy Samuelson, a senior vice president at the Kansas Hospital Association.

The traditional reasons opponents have cited to oppose expansion — that it will be too costly, that the federal government will reduce funding for the newly eligible population or that it would disincentive able-bodied adults from getting jobs — have all been disproven by the experience of the 39 states that have adopted the policy over the last 12 years, Medicaid experts said.

“The research is just so overwhelming and the experience of other states is so overwhelming it becomes very hard to use that argument, it becomes more just, ‘Well, we can’t afford this right now. We’d love to do it,” said Adam Searing, associate professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families. “Those, I think, are weak arguments against it.”

The latest expansion push also comes as states continue to eye congressionally approved incentives for adopting Medicaid expansion that require the federal government to cover an extra 5 percent of costs of the entire Medicaid program — on top of covering 90 percent of costs for the newly eligible population — for states that adopt expansion. In Wyoming, health officials project adopting Medicaid expansion would save the state a net $32 million over the next two years.

“The experience from other states has shown that rural hospitals — which, basically all of our hospitals are rural — stand to benefit the most from this,” Josh Hannes, vice president of the Wyoming Hospital Association told lawmakers during a committee hearing last week. “We have hospitals with 12 days cash on hand. We’ve lost a nursing home this year. We have seen decreased services. We’ve lost OB services in a few places, and we’ve seen over the years the decrease in mental health.”

In Wyoming, moderate Republicans — led by state Sen. Cale Case — are optimistic about their latest proposal, which passed out of a joint legislative committee on Tuesday 9-5, with seven of the committee’s 12 Republicans voting for the measure.

“I’ve voted against this probably 10 times. I kept learning in the legislature and I have learned, and, as I look back, I've changed my mind,” said Rep. Steve Harshman, the committee’s co-chair, just before the vote. “I've learned more and I think it'll be really good for our state.”

While the policy, which would expand coverage to roughly 19,000 people, faces opposition from the state Republican Party, Case told POLITICO he believes that concern among lawmakers about the state’s changing economy as it scales back its reliance on mining and increases its dependence on tourism — and its service-sector jobs that often don’t come with robust health insurance — could persuade his colleagues to change their minds.

But during a recent legislative hearing, conservative lawmakers continued to express skepticism about the program.

“Every employer I’ve ever worked for has had the option for insurance. I want to make sure we’re covering people that don’t have the option for insurance,” said Sen. Tom James, who insisted during the hearing that people making $250,000 to $500,000 could qualify for Medicaid expansion, despite state health officials telling him that wasn’t the case.

Case is warning his colleagues that it would be better to craft their own legislation than have a ballot measure, which is what happened in South Dakota and six other states.

“My colleagues are scared as heck,” Case said. “They may not like the Medicaid expansion proposal that comes out of an initiative. And, by golly, they’ve got an army of volunteers and they have money to put towards it. So, I think the legislature should really think about this and the track record of seven states. Not one of them has turned it down.”