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Demystifying State Expansions of Medicaid

On Sunday, Virginia’s political world was rocked with the news that Sen. Phillip Puckett, D-Tazewell, would be resigning his seat in the Senate, allegedly in exchange for a GOP promise of high-profile jobs for both him and his daughter, who is awaiting confirmation to the state judiciary. Senator Puckett’s resignation and its potential implications roiled state Democrats, including the Governor who had pledged to expand Medicaid as a major part of his campaign platform .The resignation effectively handed the GOP full control of both legislative chambers, allowing them to pass a budget without an expansion of Medicaid. McAuliffe’s chances of expanding Medicaid now look slim – his only option now appears to be unilateral action, bypassing the state legislature, the legality of which is murky and would undoubtedly be questioned in court.

Virginia is not the only state that has gone through dramatic political theatre over the question of Medicaid expansion, and it likely will not be the last. The debate boils down to the question of what does the expansion of Medicaid mean for states and why are some so adamantly and steadfastly opposed to it? It starts and ends with money – Medicaid is a hugely expensive program that already takes up a massive proportion of state budgets. According to NASBO, the National Association of State Budget Officers, it accounted for 24.4 percent of all state budgets in FY 2013, ranging from a high of 35.8 in Missouri to a low of 7 percent in Wyoming.

Participation in Medicaid has historically been limited to specific low-income groups, including pregnant women, children, the elderly and the disabled. The program is partially funded by state governments, and partially by the Federal government. The Affordable Care Act, or Obamacare, sought to expand participation in Medicaid to all citizens who make less than 138 percent of the federal poverty level – a massive expansion that would inflate the number of those covered by the program by an estimated 17 million Americans. The cost to do this would be huge and, under the ACA this expansion was mandatory for all states.

The Supreme Court’s ruling in National Federation of Independent Business v. Sebelius found the section of the law requiring states to expand Medicaid to be unconstitutionally coercive of states, which in practicality left the expansion optional for the states. While the federal government has pledged to fully fund the cost of this expansion through 2020, following which it would fund 90 percent of the expansion, many states are skeptical and have pushed back, claiming that there is simply no room in their budgets to do so, with others doubting the federal government’s commitment to fund the program. To date, 26 states have opted for expansion, 20 have declined and four are currently considering proposals. The District of Columbia has also chosen to expand the program.

Predictably, the question of expansion has largely fallen under party lines – many of the states that have chosen not to do so tend to have conservative state legislatures and governors. This has left many of the so-called purple states, with divided governments such as Virginia and Maine, caught in the middle of bitter partisan battles. With the political landscape likely to shift following November’s elections, expect this debate to rage on through the 2015 legislative sessions.

Students Paying More and Getting More Out of Higher Education

Ask any parent you know who has or is considering sending a child to college and you will likely hear a similar reaction: the cost of it is prohibitively expensive and consistently on the rise. Many students are forced to take out massive loans to the extent that it has been called a crisis, with total student debt reaching upwards of $1 trillion. This spiraling growth of college cost and the necessity for student loans to cover these costs is inevitably leading families to the question: is it worth it?

Absolutely, according to The College Board’s 2013 report on trends in college pricing that highlights numerous trends in higher education, including the variation in tuition and fees charged by schools, enrollment patterns, institutional finances and college affordability. The report notes that the median income for families headed by a four-year college graduate is more than twice that of a family headed by a high school graduate. The New York Times concurred with this assessment, noting that Americans with four-year college degrees made 98 percent more per hour than those without four-year degrees; this figure is up from 64 percent more per hour in the early ‘80s. With the need for a college education glaringly apparent in today’s highly competitive economy, states are beginning to take the lead in finding ways to make school more affordable for those who most need support to surmount higher education’s financial obstacles.

Stateline has complied some of the most effective measures states have taken so far to get more students in school and on the path to graduate. Since 2008, states have increased their total financial aid spending by 28 percent in an effort to offset rapidly increasing tuition prices. Colorado recently implemented a six percent annual cap on tuition increases, while Iowa took this a step further and froze all tuition increases at state colleges and universities. NCSL has also compiled a list of states that are moving from a traditional enrollment-based funding model to a performance-based funding model that rewards colleges and universities for meeting specific goals such as graduating students on time.  It’s clear that states have begun to notice both the growing need for higher education to stay competitive in this country and the growing cost of tuition and fees gradually pushing more prospective students away from these important institutions. In the upcoming 2015-2016 biennium, expect more state legislators to begin to confront this issue head-on.

Some other major takeaways from The College Board’s report:

  • The average annual rate of increase in in-state tuition for public colleges and universities from 2003 to 2014 was 4.2 percent; for private nonprofit schools this figure was 2.3 percent.
  • From 2008 to 2014, increases in in-state tuition at public, four-year institutions ranged from 5 percent in Missouri to 70 percent in Arizona.
  • From 2002 to 2012, declines in family income ranged from 13 percent for the bottom quintile to 0.5 percent for the top quintile.
  • From 2001 to 2011, enrollment in public institutions grew by 48 percent in Georgia and Florida to 11 percent in Louisiana.

Arizona Special Session

On Thursday, Gov. Jan Brewer called for a special session in the Arizona legislature to debate her proposal to overhaul Arizona’s child welfare system. This session will begin on May 27.

The proposed bill would separate the state’s child safety functions from the Arizona Department of Economic Security (DES) and create a stand-alone, cabinet-level child safety, the Department of Child Safety. In the approved state budget, the Legislature appropriated $59 million to fund the new agency, but Brewer had requested more.

Read the full proposal on the governor’s website.

West Virginia 2nd Special Session

West Virginia Governor Earl Ray Tomblin (D) has called a special session of the state’s legislature. During the session, which convened on Monday, May 19, the legislature will consider various actions to correct errors in and omissions from bills passed in the regular session. Issues under consideration include removing unintended changes to minimum wage and overtime pay rules, appropriating up to $4.7 million in state funds for the Courtesy Patrol Fund, and other supplemental budget measures.

States Making Progress to Opt Out of Affordable Care Act

A fight is brewing in one of the smallest states that will have big implications for how health care is funded in the rest of the nation. In 2011, Vermont enacted Act 48, which laid the foundations for what is to become ‘Green Mountain Care,’ a publically-financed, single-payer health care system intended to cover all citizens of the state. Several other states have also begun to follow suit, with Delaware, Massachusetts, New York, Ohio, Pennsylvania and the U.S. Congress all currently in the process of considering proposals.

The act takes advantage of a little known provision of the ACA, Section 1332, which allows states to effectively opt out of the controversial act beginning in 2017 if certain standards are met. Specifically, states that opt out must provide coverage that is at least as comprehensive and affordable to a comparable number of residents without raising the federal deficit.

According to Tess Taylor, Vermont’s former House Assistant Majority Leader and current Executive Director of The VT CURE, a non-profit advocacy group leading an effort to promote GMC, “This is a paradigm shift in the way we deliver health care to Vermonters.” Says Taylor, “It will require all parties, legislators, administrators, health care providers and Vermont citizens, to understand and support Green Mountain Care. We know that this is a heavy lift, and the VT CURE, alongside everyday Vermonters, is committed to seeing it through.”

The next step to obtaining the waiver comes in 2015, when the legislature will be asked to adopt a funding mechanism meant to shift the cost of health care from the backs of small business and more fairly and evenly distribute it across Vermont taxpayers. In 2017, Vermont will require the Section 1332 federal waiver that was set up in the Affordable Acre Act to allow the enactment of Green Mountain Care.

The state led the nation on major national issues such as the abolishment of slavery, marriage equality and most recently the labeling of GMOs and is looking to do so again. If successful in clearing the current hurdles needed to implement GMC, it will again be able to claim the first in the nation title de facto. However, Vermont is not the first state legislature to push a single-payer system into law. Two other states were able to successfully pass single-payer bills through the legislature, however administrative hurdles also derailed them on their path to implementation:

California’s legislature successfully passed SB 840 in both 2006 and 2008, a proposal that would have implemented a single-payer style health care system in the nation’s largest state. Then-Republican Gov. Arnold Schwarzenegger vetoed the bill both times. Though it has been reintroduced in each successive legislative session, the bills have yet to see the same progress as previous iterations.

Hawaii Act 11 of 2009 created the Hawaii Health Authority, to be tasked with establishing a health plan for all individuals in the state. After overriding the veto of then-Republican Gov. Linda Lingle, the Governor refused to implement the bill and it has languished since. Current Governor, Democrat Neil Abercrombie, stated earlier this year that implementing single-payer was the ‘ultimate goal’ for health care reform in the state.