Commentary

Gov. Corbett Should Not Change Decision Rejecting Medicaid Expansion

Hospitals across Pennsylvania and the nation are threatening that unless state lawmakers implement the Patient Protection and Affordable Care Act’s Medicaid expansion, the law’s new taxes and spending cuts will lead to layoffs and closures.

Let’s not forget that hospitals put themselves in this position when they lobbied for that law. Fortunately, Gov. Tom Corbett has thus far refused to punish Pennsylvania taxpayers for the hospital lobby’s mistakes.

Expanding Medicaid could cost states like Florida, Illinois and Texas $20 billion each over 10 years. Pennsylvania would be in the same ballpark.”

Unlike Corbett, some of Obamacare’s former opponents — notably Florida Gov. Rick Scott, Arizona Gov. Jan Brewer and Ohio Gov. John Kasich, all Republians — have flip-flopped and now support the expansion. They may think they’re helping local businesses, but in reality they’re sympathizing with their captors. It’s Stockholm syndrome, Obamacare style.

Originally, Obamacare would have forced states to open Medicaid to 17 million additional people. Hospitals would have received so many subsidies that they scarcely minded the law’s new taxes and spending cuts. With near unanimity, the hospital lobby strongly urged Congress to pass Obamacare “with or without bipartisan support” as a matter of “national security, equity and fairness.” The hospital lobby saw the law as “historic,” “a giant and essential step forward,” and a “major first step” full of “great improvements.”

Then in June 2012, seven Supreme Court justices let states choose whether to participate in the expansion.

Now, the hospital lobby is terrified. If states don’t expand Medicaid, hospitals won’t get their subsidies. In other words, Obamacare now means the same thing for hospitals that it has always meant for consumers and employers: certain costs, but uncertain benefits. The difference is that hospitals have only themselves to blame.

The smart play would be to call for repeal of the law, as one union that used to support Obamacare has done. Instead, the hospital lobby is doubling down.

According to one report, “Hospital associations have paid for television and newspaper ads, organized rallies, and choreographed legislative testimony,” demanding that state lawmakers unlock those subsidies. According to the hospital lobby’s curious logic, lawmakers who consistently oppose Obamacare will somehow be responsible for the harm it imposes on the hospitals that support it.

Govs. Scott, Brewer and Kasich have fallen for the cries of the hospital lobby and the promise of “free” federal dollars. Given that the expansion offers states $9 of federal cash for every $1 they spend, such flip-flops are hardly surprising. What is surprising is just how many states, including Pennsylvania, are saying no to this money and refusing to expand. Obamacare supporters are dangling an unlimited stream of federal money at the end of their line, yet only 25 states have taken the bait.

Expanding Medicaid could cost states like Florida, Illinois and Texas $20 billion each over 10 years. Pennsylvania would be in the same ballpark. And those are conservative estimates.

Actual costs will exceed those projections not only because they always do but also because President Obama and practically every politician and deficit-reduction commission in Washington have already proposed reneging on that 9-for-1 offer. To cover their ever-increasing share of the cost, states would have to raise taxes and/or cut spending for education and other services.

In dozens of states, lawmakers are fighting to rescue taxpayers from this fiscal time bomb, even at the risk of bucking the leadership of their own party. Florida House Speaker Will Weatherford, Ohio Speaker Bill Batchelder, and Arizona Senate President Andy Biggs and Rep. Adam Kwasman are standing with their GOP base and standing up to Govs. Scott, Kasich and Brewer.

With encouragement from state legislators like Rep. Stan Saylor (R-York), Corbett announced his opposition to the expansion. But his opposition may be weakening. Recently, an aide suggested Corbett may be open to expanding Medicaid in 2015.

Hospitals save lives every day. In this fight, however, the hospital lobby is no different from any other hotshot that made a bad bet and then begged for a taxpayer bailout.

Yet the cure for hospitals’ ills can only be found in Washington, not Harrisburg. Pennsylvania hospitals might join the chorus of voices demanding that Congress reopen Obamacare, but that won’t happen if Corbett develops Obamacare Stockholm syndrome. It is in Pennsylvania’s best interest that he stay strong.

Michael F. Cannon is director of health-policy studies at the Cato Institute and co-editor of Replacing ObamaCare (2012).