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Beware the Red State Suckers!

August 20, 2013

For Republican Obamacare foes hoping for a repeat of 2009's Tea Party days of rage, August 2013 is instead rapidly turning into the summer of their discontent. With its hardliners demanding a government shutdown or a U.S. default over funding for the Affordable Care Act, the Tea Party's big business backers are experiencing buyer's remorse over the Frankenstein they bought four years ago. Meanwhile, at town hall meetings around the country GOP Congressmen are increasingly under siege from constituents disgusted by the never-ending Republican to take away health insurance options and consumer protections made possible by the ACA.
But if Republicans think things are bad now, just wait until this time next year. As millions of people in states like Texas, Florida and North Carolina see their friends and relatives in places like Oregon, New York and Colorado with health insurance coverage they themselves lack, there could be hell to pay for the GOP obstructionists who played them for suckers.

The payback will begin, but certainly not end, with the Republicans governors and legislatures in the 26 GOP-controlled states who out of pure political spite rejected Obamacare's expansion of Medicaid. As things now stand, an estimated 11.5 million people nationwide will needlessly be denied health insurance. Among them will be roughly 1.9 million in Texas, 1 million in Florida, 600,000 in Georgia, 300,000 in Louisiana and 182,000 in Wisconsin.
That's why Republican Governors in Virginia, Pennsylvania and Ohio even at this late date may sign on to the ACA's Medicaid expansion for a combined one million uninsured residents in their states. That same math explains why Governor Jan Brewer, certainly no fan of Barack Obama or Obamacare, accepted the federal Medicaid expansion on behalf of 300,000 Arizonans:

"It's pro-life, it's saving lives, it is creating jobs, it is saving hospitals."

And for red states, it's virtually free.
After all, the federal government will pay for 100 percent of the cost of the Medicaid expansion until 2017 and 90 percent after that. But the billions the "opt-out" states will have to come up with in future years will be more than offset by their extra costs to compensate hospitals and other providers for the care of the uninsured. As Ezra Klein and Evan Soltas summed up a recent analysis by the RAND Corporation of 14 Medicaid rejecting states:

It finds that the result will be they get $8.4 billion less in federal funding, have to spend an extra $1 billion in uncompensated care, and end up with about 3.6 million fewer insured residents.
So then, the math works out like this: States rejecting the expansion will spend much more, get much, much less, and leave millions of their residents uninsured. That's a lot of self-inflicted pain to make a political point.

Just ask the people who run Georgia's hospitals. Republican Governor Nathan Deal said no to $33 billion in new federal Medicaid funding over the next decade. But as the federal government significantly reduces funding on Disproportionate Share Hospital (DSH) payments for the care of the uninsured, states like Georgia which turned down Obamacare's Medicaid dollars will be on the hook to make up the difference. For Grady Memorial Hospital, the largest in the metro Atlanta area, what could have been an annual boon of $60 million and coverage for 27,000 uninsured patients instead will be a $45 million loss. Georgia taxpayers will have to pay more even as hospitals likely cut services. All because a Republican Governor said "no" to free money from Washington, DC.
If anything, the deal roadblock Republicans are denying their residents is even better than this math shows. After all, the Affordable Care Act is funded in large part by higher taxes on upper-income Americans, people who tend to live in more affluent Democratic states. In keeping with the general dynamic of "red state socialism," blue state taxpayers would help underwrite health care for their red state brethren.
The bamboozling of red staters by their elected representatives hardly ends there. 34 states have refused to set up their own health care exchanges, instead leaving the task to the federal government. As we learned last week, one result is that the other 16 states are spending tens of millions of dollars more on outreach and customer service to help their residents sign up for insurance. With six million uninsured--24 percent of its entire population--Texas is spending less ($11 million) on outreach and customer service than Minnesota, where only about half a million currently lack coverage. And while Colorado is "a hive of preparation, with a homegrown insurance market working closely with state agencies and lawmakers to help ensure the law's success," in Missouri by contrast "looking for the new health insurance marketplace, set to open in this state in two months, is like searching for a unicorn." Constituents looking for help from GOP Representatives like Jason Chaffetz (R-UT) and Tim Huelskamp (R_KS) will be told to "call Obama."

"Given that we come from Kansas, it's much easier to say, 'Call your former governor,'" said Rep. Tim Huelskamp (R), referring to HHS Secretary Kathleen Sebelius.
"You say, 'She's the one. She's responsible. She was your governor, elected twice, and now you reelected the president, but he picked her.'" Huelskamp said.
"We know how to forward a phone call," said Rep. Jason Chaffetz (R-Utah).

When red staters find their online exchanges, they may not be very happy about what they find there. In places like Mississippi, where Governor Phil Bryant rejected Insurance Commissioner Mike Chaney's plea to let his agency manage the Magnolia State marketplace, many counties will have few options from which to choose. But thanks to their stricter regulation of insurers and investments in their own state exchanges, blue states like California, New York, Oregon, Colorado and Maryland are offering a wide range of insurance plans at premiums at or below the forecast from the Congressional Budget Office:

The early success of those blue state outreach campaigns combined with the millions of red staters being left needlessly uninsured by their elected officials is contributing to higher forecasts for the number of Americans who will purchase coverage through the Obamacare exchanges.
Now, many of the same members of Congress who voted 40 times to repeal the Affordable Care Act are threatening to shut down the government to prevent funding for the ACA in the next budget resolution. But despite over three years of chanting "repeal and replace," many Republican leaders admit they have nothing to replace Obamacare with. Repeal doesn't just mean roughly 30 million people losing the opportunity to obtain insurance. It also means that Obamacare's sweeping reforms of the worst practices of the insurance industry--refusing to cover those with pre-existing conditions, using "rescission" to drop coverage for those who become sick, discriminating against women, dropping young adults from family policies when they turn 19 and setting annual or lifetime benefits caps--would be swept away as well. And as GOP Congressmen like Dan Webster (R-FL) and Patrick McHenry (R-NC) learned the hard way at a recent town hall meeting, constituents won't look favorably on those who eliminated those protections.

[Skip] Edwards and his wife, both 63, had health insurance until he lost his job during the recession and the East Asheville couple found themselves in financial trouble despite staying relatively healthy.
Both had pre-existing conditions and were denied insurance, making them eligible for a state plan called Inclusive Health.
"It cost us $1,300 bucks a month -- extremely expensive," Edwards said. "It taps us out every month. But at our age and health, we've got to have it."

Skip Edwards is not alone. As it turns out, millions of Americans of all stripes got to have it, too. But in many red states, those people won't get access to insurance, but instead cruel Republican lies about "death panels" and "pulling the plug on grandma" and "a government take-over of health care" and, most recently, about "rate shock" and that under Obamacare "the IRS will have access to the American people's protected health care information."
You can fool some of the people all of the time. They are known as the Republicans' target market. But for many of the others who will increasingly realize they got played as suckers by the Republicans' all-out war on Obamacare, there may soon be a new name.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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