When Gov. Jack Markell led a delegation of state governors to Washington in December, he urged President Obama to avoid cutting Medicaid to reduce the deficit.
The Delaware Democrat warned that any reduction in federal funding for the low-income health care program would jeopardize governors' decisions to expand eligibility requirements, a key component of the president's 2010 health law and its efforts to increase health coverage nationally.
Gov. Markell with President Obama at the White House in December: Chip Somodevilla/Getty Images
Apparently, the White House was listening. A senior economic adviser to Obama, Gene Sperling, now says Medicaid cuts are off the table in deficit negotiations, The Hill reports.
Those states choosing to expand the program, including Delaware, “should do so with the understanding that the rug will not be pulled out from them,” Sperling said.
Sperling, who attended Obama's December meeting with the National Governors Association, made the remarks today at a conference hosted by the Washington health care advocacy firm Families USA.
“We are not willing to accept even the Medicaid savings that we had once put on the table. Medicaid savings, Medicaid cuts, for this administration, are not on the table,” Sperling said, reversing the administrations' earlier stance to offer Medicaid cuts to Republicans.
“We have come to believe that it is not the time to make even those savings,” Sperling said. “Not when this is the critical moment in implementing the Affordable Care Act.”
UPDATE: Markell praised the Obama administration for ruling out Medicaid cuts: "This was a specific request we made when governors met with the President at the White House so I am thankful the President has agreed. We chose to expand Medicaid under the Affordable Care Act based on the current math and cuts to Medicaid would have changed those assumptions and simply shifted costs to the state. States and the federal government need to find ways to contain costs and operate more efficiently, which in turn would save money for both, and we intend to work with other governors through the NGA to identify these possible areas."
In Delaware, Medicaid remains the single greatest cost driver in the state's budget. Markell's $3.7 billion spending plan for fiscal year 2014, which begins in July, included an additional $35.8 million for the program, which covers more than 200,000 Delawareans and is expected to cost state taxpayers $780 million in the upcoming budget year, according to estimates from the Delaware Department of Health and Social Services.
In his budget presentation, Markell said his decision to sign onto the Medicaid expansion, which would cover adults up to 133 percent of the federal poverty level ($30,657 for a family of four) actually saved the state more than $30 million.
Under the expansion deal, the federal government not only is paying for 90 percent of the health costs of the expanded population, but is increasing its match for patients already covered in Delaware. Ultimately, an additional 20,000-30,000 Delawareans are expected to receive coverage through the expansion, according to state estimates. And the state stands to receive increased matching rates for about 39,000 adults who gained access to Medicaid when the state widened eligibility up to 100 percent of poverty in 1996.
If the funding changed, Markell argued in December, governors might abandon their decisions to expand the program.
"We made that decision because of the underlying economics, the fact that there is a higher reimbursement for the population that we're already serving," said Markell, who chairs the National Governors Association. "Clearly, if that were changed, we would have to revisit that decision."
Markell had been one of few Democrats to hold back support after a Supreme Court ruling in June on Obama's health care law made the expansion optional. "Before we decide whether to choose that option, it seems prudent to get greater clarity and certainty from the federal government," Markell said.
But in early July, Markell chose to support expanding Delaware's program, calling it the "right thing to do for Delaware taxpayers," because of the additional federal dollars the federal government would send to Delaware under the deal.
