NEAL CONAN, HOST:
And now it's a supersize edition of the Political Junkie. Ken Rudin, of course, is staying with us. John Kasich, Rick Scott, now, Chris Christie - three high-profile Republican governors and outspoken critics of Obamacare - have all decided to accept federal money to expand Medicaid coverage. The governor of New Jersey explained his reasoning yesterday.
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CONAN: Joining us now to talk about the changing politics of health care is NPR health policy correspondent, Julie Rovner. She's with us here in Studio 3A. Always delighted to have you with us.
JULIE ROVNER, BYLINE: Always a delight to be here.
CONAN: And as heard from Governor Christie there, this was hardly a conversion on the road to Damascus.
ROVNER: Exactly. We seem to be hearing the same theme from a lot of these governors that are doing this. We still hate this law. We still think it won't work. But we think we're going to take the money, anyway.
CONAN: And how big a deal is it? These are three pretty high-profile anti-Obamacare campaigners.
ROVNER: That's right. They are. But you know what? There was a prediction last year when the Supreme Court made the expansion of Medicaid optional, that eventually, most of the Republicans would do this. And the reasoning is fairly simple - and actually, Chris Christie said this yesterday in his speech to the legislature - which is that if he didn't take this money, it's going to be New Jersey taxpayer money that's going to go to people in other states. And that's pretty much what Rick Scott said. That's what Governor Snyder said in Michigan.
The way it works, the way that this Medicaid money works is that, right now, hospitals get money - hospitals who serve a large number of uninsured people, and there, obviously, are a large number of uninsured people - get payments that are called disproportionate share payments. That means they serve a disproportionate share of people who don't have insurance. Those payments are going away under the law, because the law assumed that there wouldn't be that many more uninsured people, because there was going to be this big expansion of Medicaid.
So if your state doesn't expand Medicaid, there's this double-whammy. Your hospitals don't get this extra money anymore, and that...
CONAN: The disproportionate share money.
ROVNER: The disproportionate share money. And if your state doesn't expand Medicaid, you don't get this extra money from the federal government to cover them. Therefore, your hospitals are now in deep financial trouble. So in all of these states, the hospitals have been coming to the Republican governors, saying, hey. It's money coming from Washington.
CONAN: It's free money.
ROVNER: It's free money. At least for the first three years, it's free money. It's 100 percent for the first three years. It phases down, but it only phases down to 90 percent. You really should take it. And I think that's what's driving a lot of these governors to take it.
CONAN: Ken?
KEN RUDIN, BYLINE: Julie, a lot of the political commentaries have been about the fact that they switched positions and they're flip-floppers. But we also heard - we heard Chris - Governor Christie saying that we don't want the other states to get the money that we'd ordinarily would get. But also, Chris Christie is up for re-election this year. John Kasich, Rick Scott, Rick Snyder of Michigan, John Kasich, they're all up next year. These are not unpopular decisions to take regarding the voters back home, right?
ROVNER: That's right. And in not every case was this a flip-flop. Certainly, in Rick Scott's case, this was a flip-flop. He, of course, ran for governor in the first place in 2010 saying that, you know, Obamacare is an abomination. He was - you know, his state led the charge against it. But Chris Christie had actually never said whether or not he was going to take the Medicaid money. And as he - as we heard in the clip, he's still no fan of the law. So some of these governors, they had just sort of bided their time. Some of them did say, initially, right after the Supreme Court decision last summer, that they weren't going to do it. And now they're changing their tune. But some of them have just been sort of holding out, waiting to see what would happen.
RUDIN: But aside from not being invited to CPAC, I mean, what risk is it for these Republican governors?
ROVNER: Well, it is a risk. I mean, already, Rick Scott is getting sort of hit from the right. Pam Bondi, who's the attorney general who had taken on the case against the health law, is now, you know, sort of saying that Scott has, you know, gone over to the other side. But again...
CONAN: A traitor to the cause.
ROVNER: Yes, a traitor to the cause, I believe, was the phrase that was used. So there are those on the right who were going to say that, you know, how dare they do this? On the other hand, remember, they have to run for office. The health care lobby, if you will, is a place where Republicans do tend to get a fair bit of money, so it's not insignificant. They're being pressed from both sides. One would expect that they would tend to go with a lot of these major hospitals in their states who are, you know, who will be filling their campaign coffers at some point.
CONAN: And the law was designed that way to attract people who might not otherwise have gone for this. But are there going to be governors who will hold out and say no, we're not going to take the money?
ROVNER: I expect there will be. I mean, one of them is Rick Perry in Texas who, you know, who has said over and over again that, you know, he does not want any part of this, and there will not be any part of this law, you know, enforced in his state. Texas, obviously, has the largest number of - largest number and largest percentage - it's not just because it's a big state - of uninsured people in the country. And Rick Perry has been one of those people who said, you know, I will have no part of it.
Now, what's interesting to watch about that is Texas, particularly down in Houston, has an enormous hospital research complex that will, you know, certainly come to bear some significant pressure on the state government, and we will see how that goes. But I will be very surprised to see Governor Perry sign on to this. I imagine he'll be the last one.
But in a lot of other states, we're still watching. It is budget season, so this is when one would expect to see these governors make these decisions. There's no particular deadline, so they don't have to decide, you know, right away. But it's not a surprise that we're seeing these in these couple of weeks.
CONAN: And there seems to be some flexibility. I wanted to ask you about the governor of another deep red state, and that's Mike Beebe of Arkansas, who proposed an interesting swap.
ROVNER: That's right. There is some flexibility. The Health and Human Services secretary - the U.S. Health and Human Services Secretary, Kathleen Sebelius, has been meeting with the governors. In fact, she was at the governors' meeting over the weekend here in Washington. She did not appear publicly, but she was apparently ensconced up in a conference room, meeting individually with governors to see what it would take to get them to sign on.
And, you know, what these Republican governors say is that Medicaid is a flawed program. It doesn't work very well. They would like to change the way it works. Now, they - a lot of the way they would like to change it is perhaps to have people pay a little bit more for their coverage, which is difficult when you're talking about the poorest of the poor, who don't have a lot of money. But these governors would at least like to change some incentives, bring the private sector into it more. There are things that can be worked out. In fact, Rick Scott in Florida announced he would be doing this just hours after he got a waiver from the federal government to put more people who get Medicaid into managed care. This is apparently what's going also in Arkansas.
So there are deals that can and are being worked out with the federal government. It is kind of you give us this, we'll give us that, you know, we'll take that. And I am hearing that, I heard that over the weekend from several Republican governors I was talking to. You know, they're holding out. Maybe we'll sign on if you let us have a little more flexibility.
CONAN: And it's interesting - after that Supreme Court decision last year, there were grave concerns - states given the choices, a lot of governors, as you said, said we're not going to take it - that a lot of people who were designed to be covered under this were not going to be covered. It's now looking like most of them probably will.
ROVNER: Well, I don't know whether I would say most of them yet. Yet there are 30 Republican governors, and so far eight have signed on. Certainly we're getting some of the big states now: Michigan, New Jersey, Florida. So some of the concern about, you know, many people not having coverage have gone away.
Now, the administration did say, and this was significant because a lot of governors were saying maybe we could just cover some people, perhaps up to 100 percent of poverty, and let the rest of the people, those low income people, go into these health care marketplaces, the exchanges. And those people would then be covered under the federal - it was going to be quite confusing. And the HHS came out in December and said no, that's not going to work. It's going to be all or nothing. You either take everybody or you take nobody. And that sort of made some of these governors unhappy.
But as you mentioned and as I mentioned, they're still coming back and trying to find ways to negotiate. Maybe they could, you know, redo their Medicaid programs just a little bit. Maybe that would be okay with the federal government. But the bottom line is these are still people with very low incomes, so there's a limit to how much they can be expected to kick in for their health care coverage.
CONAN: You mentioned those exchanges. States also got to choose. Under the law - this wasn't the Supreme Court, but under the law, whether to set up an exchange of their own or let the federal government do it for them, and a lot of people thought initially Republican governors would want to set up those exchanges themselves, keep it local.
ROVNER: That's right. And a vast majority of them didn't. In the end, most of the governors decided, hey, we're going to let the federal government go ahead and do this. Now, what's turned out is that the federal government has said if we come in and build your exchange and run it, you can take it over whenever you want. And that turned out to be kind of attractive to a lot of the governors. It's like, great. You build it. You set it up, and if we like it, then we can pick it up later.
There is a lingering concern that perhaps there won't be enough money for the federal government to go out and promote it and, you know, get people to sign up. And then perhaps some of those people may end up not with private insurance but a lot of those people will end up on Medicaid and that could end up costing the state some more money. So there are - this is not perfect, and there's still a lot of things to be worried about. And the federal government's going to end up running, you know, 30-some exchanges rather than the, you know, perhaps eight or nine that was anticipated when the law passed.
CONAN: And it's interesting as we go through this, next year, just next year, the vast bulk of this law takes effect.
ROVNER: Yes. It's not really even just next year. October 1 is when enrollment starts, so we're really months away from this really beginning.
CONAN: And let me switch to a related but different topic. A fascinating piece today in the New York Times that said we're all talking about the sequester and the - well, maybe we can make a grand bargain where the Republicans might agree to just some tax loopholes, and Democrats, under the president's old plan, from, what, 11 months ago, would've been willing to make some cuts on entitlement programs like Medicare, maybe raise the age of eligibility. It turns out that Medicare is costing less than people projected it to cost. And now the seams of this deal are unraveling.
ROVNER: That's right. This is one of the - who ever would have thought that Medicare - that health care costs, if not going down, at least health care inflation slowing, would mess things up in terms of making a deal on entitlements? But that is exactly what's happening. Nobody is quite sure why health care spending is slowing, and I will not say going down. And be careful when you read these things. Health care costs are definitely not going down. But health care inflation is definitely slowing. It has been for the past several years, both public and private. So we were seeing it in Medicare. We're seeing it in the private sector.
Some people - the administration would like to say it's thanks for the Affordable Care Act.
CONAN: Take the credit.
ROVNER: That's right. It seems to be more than that. It seems to be - a good deal of it is certainly due to the recession. People lost their jobs, they lost their insurance, they stopped getting care. But even as the economy rebounds, we're still seeing this persistent slowdown. And it's - we're not quite sure why.
CONAN: And significant.
ROVNER: It is significant. We did see it a little bit during back after the Clinton health plan died. We saw sort of a temporary lull in health care spending and then health care inflation came back with a vengeance. So it does tend to ebb and flow and you can see it over the years. But this is a rather significant slowdown and it's kind of a good time while we, you know, sort of try to get our act together as a nation, as a society figuring out what to do. But yeah, it is kind of making a mess, trying to get this grand bargain.
CONAN: We're talking with NPR health policy correspondent Julie Rovner. Of course Political Junkie Ken Rudin is with us as he is every Wednesday. You're listening to TALK OF THE NATION from NPR News.
And just explain to me how this logic works. So the increase in health care spending is going down a little bit. Democrats start saying wait a minute, we don't have to give money back on this. We've already saved that money, so we don't have to - we're not going to go along with further cuts in Medicare.
ROVNER: That's right. And also when you make a cut, it's worthless because it's going up - if the trajectory is smaller when you do something, you get less bang for you buck because the baseline is now smaller. So if you take - it used to be if you would make this policy change, you would get X amount of dollars for it.
CONAN: You'll reap X amount of dollars.
ROVNER: Right. If you would reap $1,000 for making this policy change, well, now that things are going up slower, you'd only reap half of that. And so it's not nearly as, you know, worth doing as far- if it's going to be something painful, if the policy is going to be something painful, why should you do it if you only get half as much money?
CONAN: Let's see if we can get a caller around the conversation. Let's go to Jerry, and Jerry is with us from O'Fallon, Missouri.
JERRY: Yes. Good afternoon.
CONAN: Afternoon.
JERRY: I live in a state where we have Democratic governor, Jay Nixon. But we also now have a veto-approved majority in both the statehouse and in the Senate. And they are going forward with implementing, so far as setting the budget, et cetera, without taking the - expanding Medicaid. And what's really sad to me is the fact that really it will lower health costs in the long run or probably in a not-very-long run because there are people - a lot of people here, especially in rural areas, that will not have access to diagnostic care that could prevent a much more serious illness that we, the public, will wind up paying for.
And of course there will probably be people that will, you know, die unnecessarily because of this. And what I find interesting is, I had a friend recently deceased who was a doctor in a rural area. And he did not - probably 80 percent of his patients were on Medicaid or Medicare. And he said there is not a single one of them, if the conversation veered into politics, was going to vote for any Democratic office holder or candidate. So it seems just a little - it's also kind of sad.
CONAN: An insight into politics, and again, another deeply red state now, Arkansas, even though they have a Democratic governor, as he mentioned, that veto-approved majority in both houses of the legislature.
ROVNER: Yeah. You know, it's important to remember when we talked about these governors saying they're going to do this or that, that most of these decisions also have to go through state legislatures. Obviously Missouri, an example where there is a Democratic governor, but Republican legislature in a lot of cases. You know, yesterday with Chris Christie, when he announced that he was going to expand Medicaid, he got a standing ovation because it's a largely Democratic legislature. So in a lot of these states, you've got a governor of one party, legislature of the other. So these things are not necessarily done deals when the governor says, you know, he or she wants to do something. They do have to go through the full legislative process in most cases.
CONAN: Jerry, thanks very much for the call.
JERRY: Thank you.
CONAN: And if that situation pertains, what happens to Missouri's share of this Medicaid money if they refuse to accept it?
ROVNER: It will -- as Governor Christie pointed out, what would've happened...
CONAN: Some small portion of it will go to New Jersey.
ROVNER: Some small portion of it will go to New Jersey. That's, in fact, I believe Missouri is a state where the voters passed - I guess it was the legislature passed a law that forbade them from setting up their own exchange. The governor wanted to set up an exchange and there's now a law that says he can't.
CONAN: It's so interesting that - as we say, these are not fans of the Affordable Health Care Act. Yet there is grudging acceptance. This is the law. It's going to happen. We'd better get in line with it.
ROVNER: I was amazed this weekend talking to governors how many of them, and these were - these are very, very conservative governors who said, you know, I talked to Butch Otter from Idaho, and he said, you know, we tried to fight it in court. We tried to get a new president. We tried to get a new Senate. It failed. And you know what, at some point there is a rule of law. This is the law. We got to deal with it the way it is.
CONAN: Julie Rovner, thank you very much for your time today. Really interesting. The shifting politics of health care. Ken, nice to see you. I will not be here next week.
RUDIN: No. You're voting - you're going to be at the Vatican voting for the pope.
CONAN: Exactly. That conclave is in a couple of weeks. I'll be on vacation in Hawaii. So I'm looking forward to that.
RUDIN: Unfortunately by car.
CONAN: Yeah, exactly. Long drive. In the meantime, Ken Rudin will be back with another edition of the Political Junkie next week. I will return in two week's time. Tomorrow, as the civil trial continues over how much BP may have to pay for the 2010 Gulf oil blowout, we'll get an update on the recovery along the Gulf Coast. We hope you'll join us for that conversation. It's the TALK OF THE NATION from NPR News. I'm Neal Conan in Washington. Transcript provided by NPR, Copyright NPR.