Maine Gov. Paul LePage raised hackles last weekend for calling the IRS “the new Gestapo.” The tax agency earned this comparison to the Nazi secret police, apparently, because it will be charged with penalizing those who do not buy health insurance under Obamacare.
Yet the most remarkable aspect of LePage’s remarks wasn’t the Nazi comparison. It was what he didn’t say: Instead of joining Republican governors of six other states in announcing he will refuse to participate in the expansion of Medicaid, he wants to wait and see how the numbers add up.
The likely reason for LePage’s reservation of judgment? The Medicaid expansion won’t cost Maine’s state government a dime — in fact, it should save the state somewhere between $65 million and $118 million over six years, according to the Kaiser Family Foundation.
That’s because Maine already offers Medicaid to many of the people who are set to get it under the new law’s expansion. As such, it won’t sign up as many new members as in other states, and it will start getting a more generous federal match for the people it already covers.
Maine wasn’t forced to expand Medicaid in the first place, and if LePage thinks expanded Medicaid is too costly, he can always propose repealing it. If Maine did that, opting out of the Obamacare expansion would save the state money. But expanded Medicaid is popular, and though LePage enjoys a Republican majority in both houses of his legislature, that majority is narrow and fractious. He probably couldn’t shrink Medicaid eligibility if he wanted to.
LePage undoubtedly understands he’s going to have no choice politically but to take the Medicaid expansion funds. Most other states aren’t in Maine’s position — there will be a state-level fiscal cost to expanding Medicaid — but as I wrote last week, they can also be expected to fall into line and take the money, because the terms are very favorable.
In Texas, for example, Governor Rick Perry has said he plans to turn down the Medicaid expansion funds. But even using aggressive assumptions about participation, the federal government can be expected to pay 93.2 percent of the cost of expanded Medicaid in Texas through 2019. That means Texas would be turning down $66.6 billion in federal aid in order to save $4.5 billion over six years.
That proposition is going to be untenable once doctors, hospitals and patients start demanding that the state take the deal. Paul LePage has already figured this out. In time, Rick Perry will, too.