Washington is finally on the verge of proving Nathan Deal right about Medicaid expansion.
It was August 2012. The Republican National Convention was taking place in Tampa. Two months earlier, the U.S. Supreme Court had – to many observers’ surprise – upheld Obamacare as constitutional. The exception was the law’s forced expansion of Medicaid in all 50 states; the justices said the threat to existing funding in states that eschewed expansion was impermissibly coercive.
That meant each state had to decide whether to expand the program, originally intended for society’s most vulnerable members, such as the blind and disabled, to single, able-bodied adults. Deal told me and a couple of other journalists in Tampa that Georgia would opt out.
“I think that is something our state cannot afford,” Deal explained back then. “And even though the federal government promises to pay 100% for the first three years and 90% thereafter, I think it is probably unrealistic to expect that promise to be fulfilled in the long term, simply because of the financial status that the federal government is in.”
A dozen years later, that very promise is coming under scrutiny.
The Trump administration and Congress are considering a raft of Medicaid reforms as part of a wide-ranging reconciliation bill. Among the proposals is lowering the enhanced match rate for the expansion population, which at 90% is much higher than the 66% Georgia gets on average for current enrollees.
Another possibility is converting Medicaid from an open-ended entitlement program into a “block grant” type of program that sends money to each state based on its population, limiting future growth of federal spending. The entire list of proposals is projected to save hundreds of billions of dollars per year.
The savings would be large because the spending is large. In the 2017 budget Donald Trump inherited when he began his first term, federal Medicaid spending totaled nearly $375 billion. Last year, it reached $642 billion. In the first two months of fiscal 2025, Medicaid cost federal taxpayers $169 billion – a 10% increase over the same period a year ago.
Worse, Medicaid is second-rate insurance. Fewer doctors accept new Medicaid patients compared with commercially insured patients because Medicaid pays them less to provide the same services.
That’s why now is the worst time for Georgia to expand Medicaid. Our individual market for health insurance has blossomed in recent years for a variety of reasons. Those reasons include the successful launch of Georgia Access, the state’s online marketplace that replaced Healthcare.gov for Georgians, as well as the reinsurance plan championed by Gov. Brian Kemp, which has helped return carriers to our market and drive down premiums.
Another key reason is that the federal government already fully subsidizes insurance for the expansion population who earn between 100% and 138% of the federal poverty level (between $15,650 and $21,597 for a single individual). Unlike Medicaid, these plans include deductibles and copays. But also unlike Medicaid, they are more widely accepted – and thus may be more valuable to recipients.
Perhaps that’s why more than 800,000 Georgians in that income range have insurance they bought on the individual market. That’s larger than the projections I’ve seen for the number of Georgians who would be served by Medicaid expansion. At this point, expanding Medicaid in Georgia might simply shift people out of their commercial plans.
So, here’s a question for those who continue to hawk Medicaid expansion because of the 90% federal funding – regardless of the fact that it might go away, much less the fact it’s all taxpayer money, and Georgia taxpayers are also federal taxpayers:
If federal funding is the important thing, then why move people away from a 100% federally funded plan (on the individual market) to a 90% federally funded plan (Medicaid)?
Georgia’s policymakers would be wiser to put their energies into making our market work even better.
Kyle Wingfield is president and CEO of the Georgia Public Policy Foundation: www.georgiapolicy.org.