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Editorial: Branstad should pass Medicaid expansion

BY DI EDITORIAL BOARD | MARCH 11, 2013 5:00 AM

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Iowa Gov. Terry Branstad has taken a great deal of criticism, primarily from Iowa Democrats, including Sen. Tom Harkin, for his refusal to accept the federal expansion of Medicaid provided for in the 2010 Patient Protection and Affordable Care Act, or Obamacare.

Under the Affordable Care Act, the federal government will provide additional funding to states to expand access to Medicaid, the federal-state program that provides public health insurance for low-income people. The original law more or less required states to accept increased funding for Medicaid by threatening noncompliant states with massive funding cuts.

This state-by-state mandate was struck down by a 2012 Supreme Court decision that upheld most of the Affordable Care Act. As a result, governors across the country were allowed to choose whether to move forward with Medicaid expansion; Branstad has chosen to forgo expansion, which he said would lead to “a future of higher costs, higher taxes, and increasing debt for Iowans.”

Last week, Branstad unveiled his alternative plan to try to improve Iowa’s health-care system. The Healthy Iowa Plan, if passed by the state Legislature, would help low-income Iowans purchase private health insurance through tax breaks. Branstad’s plan would cover around 89,000 uninsured Iowans with incomes at or below 100 percent of the federal poverty line.

In many ways, Branstad’s plan is inferior to Medicaid expansion; the Healthy Iowa Plan will cost the state far more and insure far fewer low-income Iowans than Medicaid expansion. Branstad’s opposition to the expansion amounts to little more than political grandstanding; pandering to a base that believes “Medicaid” is a dirty word.

The Healthy Iowa Plan will cost $162 million in its first year, though the details of that funding are somewhat hazy. According to a cost analysis conducted by the Kaiser Commission on Medicaid and the Uninsured, a nationwide expansion of Medicare would actually save the state a considerable amount of money over the next decade.

Under the Affordable Care Act, the federal government will bear 100 percent of the cost of Medicaid expansion for three years and then 90 percent of the cost after that. All told, the Medicaid expansion would save the state more than $500 million over the next 10 years.

As mentioned above, Branstad’s plan would insure 89,000 uninsured Iowans who currently earn less than 100 percent of the federal poverty line. As it stands, the federal poverty line for an individual is just under $11,500 per year.

The Medicaid expansion, covering Iowa’s uninsured who make up to 138 percent of the federal poverty line, would insure a much larger proportion of Iowa’s uninsured. Today, they make up about 10 percent of the state’s population.

It’s clear that Branstad’s plan is more costly and considerably narrower than Medicaid expansion, but all of this is not to say that Medicaid is perfect — it isn’t. Opponents argue that the program has become overly costly thanks to particularly lax eligibility rules that have undermined the program’s function as part of the social safety net.

Such opponents of Medicare expansion argue that the program should be fixed rather than expanded, its means test pared down. This may well be true, but the fact of the matter is that Medicaid expansion is simply a better policy than Branstad’s Healthy Iowa initiative.

In fact, Medicaid expansion has won over a number of Republican governors across the country, including New Jersey’s Chris Christie, Ohio’s John Kasich, and Arizona’s Jan Brewer.

Branstad should read the writing on the wall and reverse course. To opt for an inferior program for any reason, politics or ignorance, would be a disservice to Iowa.


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