Arizona Governor Signs ObamaCare Medicaid Expansion

Jan Brewer

On Monday, Arizona Governor Jan Brewer signed into law the state’s budget opting in to the ObamaCare Medicaid expansion program.  It was the capstone of a long, hard fought battle by Gov. Brewer to impose the expansion on the state of Arizona and its startled citizenry.

How did we come to the point where a Republican governor in a conservative state would stake her political career on choosing to implement ObamaCare’s massive expansion of the welfare state?

ObamaCare Medicaid Expansion is Optional

PPACA Section 2001 expanded Medicaid up to 133% of the federal poverty line.  It also provided federal funding for the increase as follows:

(A) 100 percent for calendar quarters in 2014, 2015, and 2016;
(B) 95 percent for calendar quarters in 2017;
(C) 94 percent for calendar quarters in 2018;
(D) 93 percent for calendar quarters in 2019; and
(E) 90 percent for calendar quarters in 2020 and each year thereafter.

Then came the Supreme Court’s ruling on the individual mandate in NFIB v. Sebelius.  Chief Justice Roberts inexplicably upheld the mandate as a tax, a holding that will forever define his legacy as having abandoned originalism.  But there was one minor victory for the states:

As for the Medicaid expansion, that portion of the Affordable Care Act violates the Constitution by threatening existing Medicaid funding. Congress has no authority to order the States to regulate according to its instructions. Congress may offer the States grants and require the States to comply with accompanying conditions, but the States must have a genuine choice whether to accept the offer.

In other words, the states can decline the ObamaCare Medicaid expansion without losing all federal Medicaid funding.

Gov. Brewer Jumps Aboard the ObamaCare Bandwagon

Gov. Brewer gained some populist street cred for her finger-wagging incident with President Obama in January 2012.  But her commitment to economic liberty has long been in question.  In 2010, the Chris Edwards gave Gov. Brewer a “D” grade in the Cato Institute’s Fiscal Policy Report Card on America’s Governors.  Edwards followed up that analysis with another “D” grade in 2012, noting that Brewer has “usually proposed substantial increases in spending” in her budget proposals.

When Brewer announced her support for ObamaCare Medicaid expansion in January, she reached the level of America’s worst Republican governor.  And for good reason.  She has taken one of the few opportunities to stand up against ObamaCare and turned it into a personal quest for federal dollars.

To get a sense of how bad it is, you don’t need to look much farther than the multitude of materials on the official Arizona Governor website promoting the expansion. The featured page touts the ObamaCare implementation as “The Conservative Choice for Arizona.”  First and foremost, according to the Governor’s office, this is because the expansion comes with “No State Expense.”  This is translated as meaning that it will be no cost to the state’s general fund.

But of course it will come with state expense.  The feds only pick up the full bill through 2016.  After that point, federal funding slowly trickles down to 90% by 2020.  If not from the general fund, where’s the state revenue in Arizona going to come from to cover its share?  Answer: There will be a $250 million per year “bed tax” on hospitals.  No kidding.  As NRO put it, “It takes a special kind of genius to make health care more affordable by making it more expensive.”

The Real Costs

The Kaiser Family Foundation released a detailed report of the costs of Medicaid expansion last November.  It found that if all 50 states implemented the ObamaCare Medicaid expansion, federal spending would increase by $800 billion in the first ten years.  That’s $800 billion added to the national debt shared by all of us, including Arizonans.  FreedomWorks calculated that if only 21 states opted into the expansion (we’re now up to 24) instead of all 50, there would be a savings of $511 billion.

Gov. Brewer defends her ObamaCare endorsement with the relatively low amount that represents the state’s share ($8 billion total).  However, last I checked Arizonans pay federal income taxes, too.

Furthermore does anyone believe that the federal government can or will keep to its promise to fund at least 90% of the expansion into perpetuity?  Gov. Brewer’s “Reality Check” points to a “‘circuit breaker’ that protects the State in the event the federal government is unable to hold up its end of the bargain.”  Again, NRO hit this point right on the head:

Governor Brewer plainly understands the mechanics of these perverse incentives, which she has promised to make still more perverse: In conjunction with her plan to expand Medicaid spending, she also is offering up companion legislation that would automatically reduce Arizona’s Medicaid spending in the event of any reduction in federal support. Which is to say, Governor Brewer supports an expansion of Medicaid in Arizona so long as she is able to avoid any fiscal or political responsibility for it. Not exactly a profile in courage.

Governor Perry Leads the Way

If there’s one thing Texas Gov. Perry does best, it’s put the federal government in its place.  He has led the charge against Medicaid expansion from the outset.  He recently stated that Gov. Brewer and the others pledging their support for ObamaCare’s Medicaid expansion “will come to rue the day because Medicaid will take a larger and larger share of their state budgets,” adding that “Texas will not be held hostage to the Obama administration’s attempt to force us into this fool’s errand.”

Gov. Perry’s stance on this issue is perhaps best memorialized by this bold letter to HHS Secretary Sebelius last July, in which he stated:

In the ObamaCare plan, the federal government sought to force the states to expand their Medicaid programs by - in the words of the Supreme Court - putting a gun to their heads. Now that the “gun to the head” has been removed, please relay this message to the President: I oppose both the expansion of Medicaid as provided in the Patient Protection and Affordable Care Act and the creation of a so-called “state” insurance exchange, because both represent brazen intrusions into the sovereignty of our state.
What they would do is make Texas a mere appendage of the federal government when it comes to health care…In short, it essentially treats the states like subcontractors through which the federal government can control the insurance markets and pursue federal priorities rather than those of the individual states.

Today we salute you, Gov. Perry.  You are a real man of federalism.

Last Chance for Arizona

The good news for Arizona is that this fight might not be over.  The Goldwater Institute is considering filing a suit to block the law on the grounds that it violated the state constitutional requirement for a ⅔ majority to increase taxes.

Even more promising is the upstart petition drive to put Gov. Brewer’s ObamaCare Medicaid expansion decision to the test in 2014 with a voter referendum.  The movement is being dubbed as the “People’s Veto” to stop “OBrewerCare” in Arizona. According to the Arizona Republic, the group will have 90 days to collect 86,405 signatures to put the law on hold until the proposition can be placed on the ballot in November 2014.  Arizonans, time to make your voices heard.

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