The Corner

The Last Line of Defense against Obamacare: Medicaid Expansion

Many states still hope to escape Obamacare’s Medicaid expansion. They can do it — if they work together.

As the editors noted recently, a handful of GOP governors have already caved in to Obamacare’s “voluntary” Medicaid expansion requirement — five of 30 at last count. The trend could well continue, and it could soon reach a tipping point, past which virtually all the GOP governors might feel compelled to cave in.

While there is still some prospect of 25 states refusing to expand Medicaid, they must unify and make a stand now. If that many states refuse to expand Medicaid, Congress will have to go back to the drawing board on Obamacare. It can’t very well leave in place a massive insurance subsidy for the whole middle class (everyone between 133 percent to 400 percent of the federal poverty level), while leaving half of America’s poor people (those under 133 percent of the poverty line but who are not currently eligible for Medicaid) without even one dollar in subsidies. 

It’s absolutely vital for states to forge a united front on Medicaid expansion, because otherwise each state will be faced with a prisoner’s dilemma. Under current law, every state that refuses Medicaid expansion will lose its share of tax contributions for the federal subsidies in the expansion — billions yearly that will go to those states that do cave in. Ohio didn’t succumb to the allure of “free money” — there is no such thing. It was seduced by the offer of other states’ money, forcibly transferred to it courtesy of the federal government. 

But if each state has to assume that all the others might eventually cave in on Medicaid expansion, then the pressure to go along will become overwhelming. That’s especially true now that studies have come out showing how much local communities stand to gain from Medicaid expansion, which has dramatically increased the pressure from local constituents on each state’s elected officials. 

The good news is that Obamacare does not actually create a prisoner’s dilemma. There is no prisoner’s dilemma if the prisoners can coordinate, and here the states can actually coordinate. 

This is the last best chance to force a sweeping modification of Obamacare. States need to the hold the line now, and they must do it together, and speak with one voice. Perhaps an emergency summit of conservative governors is in order before anyone else caves in to this abominable launch of yet another ruinous, unsustainable federal entitlement program. 

— Mario Loyola is director of the Center for Tenth Amendment Studies at the Texas Public Policy Foundation.

Mario Loyola — Contributing editor Mario Loyola is senior fellow and Director of the Center for Competitive Federalism at the Wisconsin Institute for Law and Liberty. He began his career in corporate ...

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