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Explained: Obama to Help McDonnell on Medicaid to Help Terry

by: Goldmanusa

Tue Jan 08, 2013 at 15:50:28 PM EST


by Paul Goldman

I heard Congressman Bobby Scott talk about the big Obamacare issue facing Virginia in the 2013 gubernatorial election: The proposed Medicare Expansion. As usual, Scott knows his stuff and explained like a 20-year veteran would, right to the point, easy to understand. He was speaking at a fundraiser for Joe Morrissey who was later joined by T-Man McAuliffe. Terry played a lot better than his Notre Dame Irish last night.

My takeaway from what they said even though they didn't discuss it: There is deal coming in a few months, with the Obama Administration agreeing to Governor McDonnell's conditions, or at least enough of them, to cover McD's retreat from being AGAINST THE EXPANSION OF MEDICAID over to OKAY, LETS DO IT AND SEE HOW IT WORKS.

Let me explain. But first, it never made sense to me for the White House to run from the term "Obamacare", which I used right from the start in discussing the issue. If Lyndon Johnson could have called it Johnsoncare not Medicare, he would have done it ASAP. Your name on something that important....for ever...and it is a bad thing? Like Social Security, it will tweaked here and there, Social Security covered less than half of American workers when first adopted. Medicare, in effect, is universal health care for seniors. Even Ronald Reagan, a staunch opponent when first enacted, became a big supporter. Obamacare will stand the test of time although again, it needs some fine tuning.

In a more logical universe, the President winning re-election, along with a Supreme Court decision finding Obamacare to be constitution, would end the debate over whether there will be Obamacare, and start the discussion on how best to make it work....in states like Virginia.

But like everything in DC these days, whenever you think they have said all they can say about an issue, think again: there is more and more still again.

So in 2013, the debate over Obamacare comes to Virginia disguised as a debate over Medicaid, which serves those Americans without the money to afford access to quality care on a regular, sustained, preventive basis. It was enacted along with Medicare in the Johnson scheme of things. But whereas Medicare is mostly funded by payroll taxes, Medicaid is mostly funded by general fund dollars given to the states by Uncle Sam. It is a state/federal partnership. Like any partnership, it has its ups and downs.

As part of Obamacare, the federal government is offering a huge incentive to get the state's to expand Medicaid coverage. Here in VA, the feds want state government to cover at least 250000 more people by the latest state government estimates, down from about 400000 originally predicted by the McDonnell Administration. But it is likely to fall somewhere in between.

As discussed the other day in this space, in his decision upholding Obamacare, Chief Justice Roberts threw the feds and the state's a Medicaid curve ball. Prior to the decision, Uncle Sam basically could coerce states to expand Medicaid, regardless of what the feds offered in new funding, by threatening to withhold the old funding. As a practical matter, a state had no choice but to agree.

Roberts rejected such a federal power of coercion, He said Uncle Sugar had to put away the Medicaid cattle prod.

In the next few months, the Republicans in charge of state government are going to have to decide whether or not to agree to expand Medicaid per the Obamacare vision. Governor McDonnell is the newspaper again today saying he doesn't want to do it on the grounds it requires the state to accept a huge potential financial burden in the future. But he also left himself a way to reverse his position. Like an Olympic diver, who win the contest with your reverse dives: and so I say the reverse position is the one McDonnell is working on to impress the judges, in this case both the Obama Administration and the voters.

On one hand, McDonnell has a valid fiscal point: the Medicaid expansion has the potential of being very costly to the state. But how costly and when will you know for sure?

What we do know is this. For the next  few years, Uncle Sam has promised to cover 100% of the costs to expand Medicaid. 100%. Assume you believe Washington - it is the law right now - there is no short term risk to Virginia. Then for the next few years after that, Uncle Same will pick up 90% of the costs.

After that: McDonnell is right, no one at the General Assembly today knows for certain.

But we also know this too: If Virginia opts to join the Obamacare expansion, the federal government is going to pour many billions of dollars into the state for health care. On balance, the state should probably break even, give or take, under the operative scenarios, perhaps even getting a windfall due to cost savings during the term of the next Governor.

Moreover if the state doesn't opt to expand, then you still have hundreds of thousands of people in need of care, they aren't going away. This will cost the state in this period.

NET NET: As political matter, it is difficult for me to see, on a NET VOTES BASIS FOR GOVERNOR, why a candidate would oppose Medicaid Expansion that is not going to cost the state money, might even save it money, say in the next five years. .

MORE IMPORTANTLY, as I indicated before, it seems to me Governor McDonnell is already laying the bread crumbs for him to abandon his NO EXPANSION POSITION for the eventual decision to AGREE TO EXPAND MEDICAID.

McD is no slouch when it comes to slicing the bologna when he wants to. SO, I believe his gambit of saying he will accept the expansion provided Uncle Sam gives Virginia greater "flexibility" in implementing the expansion is rather clever. He is pointing for the judges to watch his reverse 2 and half tuck.

Virginia isn't Alabama: we are not a red state. The politics of Virginia is not anti-Medicaid.

This is especially so when even the McDonnell Administration has to concede the Obamacare mandate expansion will NOT COST VIRGINIA money in the next Governor's term.

What will happen in the year 2023? I don't know for sure to be honest. But neither does anyone else, pro or con Medicaid. They might have a vaccine that cures everything, or the economy will boom and Medicaid rolls will be cut sharply.

For 2013, I don't think 2023 is going to be the test.

Rather: the issue will revolve around the next few years, maybe the next Governor's cycle of four years not much longer in any case.

In that period, the Obamacare expansion is not only fiscally responsible but it makes a lot of sense on a health care basis, offering a greater chance at preventive care which will save money by 2023, tons of it.

The current 2013 scorecard?

Right now, I believe K-Man is where McDonnell has been, namely against expansion.

Right now, I believe T-Man is where McDonnell is headed, namely for expansion with the flexibility*.

Right now, I believe the Obama Administration is going to be inclined, both as matter of good policy and good 2013 politics to help T-Man, and thus give Governor MCD what he wants.

They know Cuccinelli cannot afford to be on the other side of the issue from a Republican Governor and Democratic GUV nominee.

Thus, it is all upside for the Obama Administration to let McDonnell complete that reverse dive for a perfect 10, hit the water with no splash. THAT FORCES CUCCINELLI TO AGREE. So no matter who gets to be Governor, the President gets what he wants. And if Cuccinelli actually defies McDonnell, well that gives McAuliffe a better chance of winning.

Thus for the President: What's not to like?

First uranium mining, now Medicaid: Good omens for McAuliffe, less so for Cuccinelli.

Transportation up next: Sooner or later, the K-man is going to have put some points on the board for his side.

Goldmanusa :: Explained: Obama to Help McDonnell on Medicaid to Help Terry
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