Indiana Governor Mike Pence announced Tuesday morning that the Obama administration had approved the state’s plan for accepting the Medicaid expansion. Starting February 1, 350,000 low-income Indianans will be enrolled in Healthy Indiana, the state's Medicaid program. With the 2016 presidential cycle now underway, political analysts immediately are judging how Pence's move affects his presidential odds.
The early consensus is that, if indeed Pence decides to run, this decision would cause him trouble in the GOP primary. But the issue poses a dilemma for the Republican Party more broadly, especially its hopes of recapturing the White House. As we saw during the midterms, the Medicaid expansion pits moderate Republicans versus conservatives, governors versus state legislators—and potentially undermines the party’s newfound interest in helping the poor and reducing inequality.
It's up to governors to decide whether their state accepts the Medicaid expansion, and it's hard to pass up. The federal government is offering states money to expand Medicaid so that people earning up to 138 percent of the federal poverty line are eligible for the program. The federal government covers all of the costs from 2014 through 2016 and then that coverage amount phases down slowly to 90 percent by 2022. Governors also face aggressive lobbying from the hospital industry, which is eager to accept the billions of dollars that the federal government transfers to states that expand Medicaid. As a result, 10 states with Republican governors have accepted the expansion over the past few years, and two more, in Tennessee and Wyoming, are considering it.
But some Republican governors have toed the party line, including two likely 2016 candidates: Wisconsin Governor Scott Walker and former Texas Governor Rick Perry both rejected the expansion. Medicaid, after all, is part of Obamacare, which must be "repealed and replaced." That's one reason why most potential Republican candidates—especially those in Congress, like senators Ted Cruz, Rand Paul, and Marco Rubio—are opposed to the expansion.
This makes for an interesting rift in the Republican primary.
If Pence runs for president, he’ll have some explaining to do. He would likely argue that he pushed Medicaid in a much more conservative direction through a waiver from the federal government that allows Indiana to requires enrollees to contribute a monthly premium to a health savings account, a typical conservative health care idea. He would also likely appeal to his evangelical base by saying that Medicaid expansion is the compassionate thing to do. But he wouldn't be alone in defending his decision: New Jersey Governor Chris Christie accepted the expansion, too. Not known to sidestep an issue or stay on the defensive, Christie could attack the other governors for not taking advantage of the program and hurting their poor constituents, and he might accuse Cruz et al of not understanding how governing works.
The general election is a different story altogether, which brings us to the GOP’s desire to appeal to lower-class voters.
Over the past few weeks, Republicans have begun emphasizing income inequality and stagnant wages. These are important issues, but the GOP's economic platform still consists largely of deregulation, spending cuts, and lower taxes. That won't appeal to the poor, particularly compared to the Democratic proposals of free community college and middle-class tax breaks.
That’s where the Medicaid expansion comes in. Denouncing it as Obamacare may work with the Republican primary electorate, but it won't work in the general election. We saw as much in the midterms, when new Senate Majority Leader Mitch McConnell twisted himself into knots balancing his commitment to repealing Obamacare and promising not to alter the state’s health care exchange and expanded Medicaid program (both of which, of course, were the result of Obamacare). Granted, McConnell won reelection easily, but it does show how the expansion can be a political liability for Republican candidates.
If Christie or Pence emerge from the crowded field, it won't be a problem. They can tout the expansion as evidence of their committment to fighting inequality. But the opposite is true for the rest of the field. For them, the expansion will be an even bigger liability if income inequality isn't just Republicans' flavor of the month, but a major part of their 2016 platform.