Short Takes On News & Events

Business Groups Split On Medicaid Expansion

By Phil Galewitz

March 10th, 2014, 11:30 AM

With several states weighing whether to expand Medicaid under the federal health law, supporters are looking to powerful business groups to help sway skeptical state legislators. But those groups are split on the issue — just like the public at large.

Nationally, the National Federation of Independent Business,  which represents mostly small employers, remains opposed to the expansion, while the U.S. Chamber of Commerce has no position, saying it’s a state issue. Both organizations opposed passage of  the law four years ago and the NFIB was one of the groups that took its challenge to the U.S. Supreme Court.

State business groups are also divided.  Large business groups in Missouri, Texas, Idaho, Virginia, Alaska, Pennsylvania and Tennessee support expansion as way to help hospitals and lower costs for employers, while chambers of commerce in North Carolina and Georgia say they are unconvinced. The Florida chamber says it would  support Medicaid expansion only if the state met several conditions, including lower medical malpractice costs and expanding residency training slots.

The level of commitment to the issue also varies. At one end of the spectrum is the Missouri Chamber of Commerce, which this year hired former U.S. Sen. Kit Bond to lobby the Republican-dominated state legislature to extend Medicaid coverage to 300,000 Missourians. Bond, a Republican, voted against the health law before he resigned from Congress in 2010.

Like other Republicans who favor Medicaid expansion, he insists his overall view on the law has not changed: “I have been and always will be opposed to Obamacare.”

But today he argues that expanding Medicaid to cover everyone with incomes under 138 percent of poverty level, or $15,800 for an individual, would protect the state’s safety net providers and save money for taxpayers and employers. That’s because under the law, hospitals lose Medicare funding and, without the Medicaid expansion, will  not gain as many insured patients.

Bond said the chamber-backed bill would funnel millions of dollars in health law funding to buy private coverage for the poor similar to the approach used by Arkansas.

But the Missouri bill, which was introduced by two Republican House members, faces an uphill battle. Its first House committee hearing is set for Monday.

In February, the state Senate defeated Medicaid expansion on a vote of 23-9, with Republicans opposing the idea and Democrats supporting it. But supporters said that vote was not a true test because that bill did not include details that the chamber backs such as having people on Medicaid get coverage through private health plans.

The Missouri legislature meets through April.

The chamber is betting that a pitch from someone like Bond, who is seen as an outspoken opponent of the law, will resonate with conservative lawmakers. “We have made great progress,” Bond said. “People who had said ‘no way’ are saying this sounds reasonable and we’ve gotten them to take a second look at it.”

To date, 26 states have expanded Medicaid under the health law, and Indiana and Pennsylvania are seeking federal waivers to extend the program under certain conditions.

Business support played a key role in helping Arizona and Arkansas win legislative approval for Medicaid expansion. The Pennsylvania Chamber of Business and Industry is a major booster of Republican Gov. Tom Corbett’s effort to expand Medicaid by offering a private coverage option to the uninsured.

Ironically, the Obama administration’s decision to delay until 2015 the health law requirement that employers with more than 50 employees provide coverage has dampened some support within the business community. “That’s taken some of the wind out of sails” of employers pushing for extension, said David Christian, a lobbyist for the Florida Chamber of Commerce. If the requirement were in place, Medicaid could help reduce potential penalties for employers because low-wage workers could seek coverage through the government program.

Even within states, employers remain split. While the Florida Chamber opposes efforts to expand Medicaid without malpractice liability reform, the Greater Tampa Bay Chamber of Commerce supports expansion without any conditions. More than a dozen local chambers of commerce in Florida have joined with other state employers in a coalition called A Healthy Florida Works to push for expansion.

Similarly, the Charleston, S.C. chamber supports Medicaid expansion while the South Carolina chamber says it’s still studying the issue.

Jamie Harden, CEO of Creative Sign Designs and board member at the Tampa chamber, said he fears if the state doesn’t expand the program, the cost of insuring his workers will increase because hospitals will have more uncompensated care and charge higher rates to insurers. “I am a ‘get government out of my way kind of guy,’ but on the practical side … we need to take the damn money.”

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