Scott's Medicaid Decision is a Big Win for the White House

Margot Sanger-Katz
February 20, 2013

Florida Gov. Rick Scott’s decision to expand his state’s Medicaid program is a huge political and practical win for President Obama's White House.

Scott, who rose to the governor’s mansion on an anti-Obamacare campaign, also led the legal effort to overturn the president’s health reform law last year. Without the multistate lawsuit led by Florida, expanding state Medicaid programs would never have been optional. Now, he is one of seven Republican governors who have endorsed expanding their programs.

After the Supreme Court ruled that states didn’t have to expand Medicaid to cover all low income residents, Scott very publicly declared victory. “Florida will opt out of spending approximately $1.9 billion more taxpayer dollars required to implement a massive entitlement expansion of the Medicaid program,” said a July press release from the governor’s office. “Since Florida is legally allowed to opt out, that’s the right decision for our citizens,” he said at the time.

But his flip-flop Wednesday shows how difficult it will be for governors to hold out on ideological grounds when the financial incentives to switch are so significant. According to a recent Urban Institute analysis, Florida will get about $66 billion in federal dollars over 10 years if it expands, and will spend about $5 billion. (Scott has not committed to a full 10 years of expansion, which makes the deal potentially better, since the federal government will pick up 100 percent of the tab in those early years.) About 1.3 million low-income uninsured Floridians would get coverage over 10 years, according to the Urban numbers.

“While the federal government is committed to paying 100 percent of the cost of new people in Medicaid, I cannot, in good conscience, deny the uninsured access to care,” Scott said on Wednesday, calling his choice a "compassionate, common-sense" decision.

That’s logic that may be harder and harder for other state executives to argue with now that one of the health law’s most prominent political opponents has capitulated. That does not mean that every governor will sign on right away or at all. Several Obamacare opponents have reasserted their Medicaid expansion opposition in recent weeks. But Scott is a high-profile convert.

Scott, like other red-state governors, has come under intense pressure from hospitals. The Florida Hospital Association, which stands to benefit significantly from the expansion, has been lobbying, advertising and polling to try to persuade state officials to expand. Scott, a former hospital executive, has close ties to that community.

But if administration officials are quietly celebrating, the White House is unlikely to gloat too publicly. It has every incentive to continue to urge governors to sign on. The success of its health reform law depends on other states following suit so the law can expand coverage to as many uninsured Americans as possible. In the case of Florida, the administration apparently sweetened the deal by signing off on a Medicaid waiver the state wanted to continue privatizing the program for existing beneficiaries. “They’ve made it as easy as possible,” said Douglas Holtz-Eakin, the president of the conservative American Action Forum. “They need to make the Affordable Care Act work.”