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Ex-Obamacare foe Gov. Rick Scott waves white flag on Medicaid expansion

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Politics,Beltway Confidential,Philip Klein,Politics Digest

When the history of President Obama’s drive for national health care is written, there are several moments that will be looked back upon as having cemented the law in place. There were “conservative” Democrats Ben Nelson and Bart Stupak dropping their objections to Obamacare to get the legislation across the finish line. There was Chief Justice John Roberts  siding with the Supreme Court’s liberals to uphold the constitutionality of the law. There was President Obama’s reelection victory, which crushed any feasible path to full repeal. On Thursday, Florida Gov. Rick Scott’s delivered yet another blow to opponents to Obamacare by endorsing the law’s Medicaid expansion in his state.

Scott’s decision is of both symbolic and substantive importance. A former hospital executive, Scott made a national name for himself by spending as much as $20 million on ads during the health care debate opposing Obamacare through his group Conservatives for Patients Rights. With the exposure he gained in conservative circles, he launched his ultimately successful bid for governor in 2010. While he was governor, Florida led the 26-state suit challenging not only the constitutionality of Obamacare’s individual mandate, but also its provision that coerced states into expanding Medicaid eligibility. For opponents of the law, one the few silver linings in the June 2012 Supreme Court decision was that it gave states the choice of rejecting the expansion.

Following the decision, Scott appeared on Fox News with tough talk. “This is going to be devastating for patients,” he said of the law. “Devastating for taxpayers. It’s going to be the biggest job killer ever.  We’re not going to implement Obamacare in Florida. We’re not going to expand Medicaid, because we’re going to do the right thing.” He went on to say that, “This is an expansion that just doesn’t make any sense.”

But on Wednesday, after months of heavy lobbying by Florida’s powerful hospital industry, Scott declared, “While the federal government is committed to paying 100 percent of the cost of new people to Medicaid, I cannot, in good conscience, deny the uninsured access to care.” He said he was swayed to back the expansion by the Obama administration’s agreement to grant the state more flexibility in administering Medicaid.

Scott argued that Floridians would be paying to help fund the Medicaid expansion in other states anyway, so they may as well get their share of federal funding. But going ahead with the expansion, Florida would be adding about 1 million beneficiaries to one of the costliest government programs. After the Supreme Court decision, the Congressional Budget Office estimated that adding 11 million people to Medicaid would cost $643 billion over the next decade — meaning a back of the envelope estimate is that Scott’s decision could ultimately cost federal taxpayers about $58 billion over the next decade.

To be sure, Scott argues that his decision is only temporary and contingent on federal taxpayers picking up the entire cost of the expansion. The way the law was written, the federal government agreed to cover the full cost for the first three years, and gradually raise the state contribution until it reaches 10 percent. Scott has proposed sun-setting the expansion to expire after three years, or earlier if the federal government backed off their commitment to fully fund it.

In practice, however, this sunset idea is incoherent. Scott is up for reelection in 2014, and no matter who is in office, it’s doubtful that after three years of allowing broader Medicaid eligibility, that the state would suddenly kick people off the program or prevent new Floridians from enrolling under eligibility standards that have prevailed for three years. Even Scott seems to acknowledge this by saying, “I want to be clear that we will not simply deny new Medicaid recipients health insurance three years from now.”  Realistically, this was Scott’s one and only chance to resist the Medicaid expansion, and he folded.

Scott’s proposal still has to pass through through the Florida legislature to become law. But in the meantime, he has become the seventh GOP governor to embrace the Medicaid expansion. The higher the number of states that agree to expand Medicaid, the more compelling the logic becomes for wavering governors to decide that they, too, must get their fair share. So Scott’s decision will likely lead to a further expansion of the program in other states.

As he was wrapping up his remarks, Scott insisted his decision was “not a white flag of surrender to government-run healthcare.” In actuality, waving the white flag is an accurate description of Scott’s decision.

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