Senior officials look to that history with optimism. “States are now in a position where the federal government is saying we will pay 100 percent of the cost,” White House Chief of Staff Jack Lew said on ABC’s “This Week.”
Some Medicaid experts, however, see a different history lesson: Expanding coverage can be a complicated endeavor. “It may take a little bit of time,” said Charles Brecher, a professor at New York University.
Medicaid got a chilly reception when it began operating in January 1966. It was up to states to decide whether to participate, and only six initially signed up: Hawaii, Illinois, Minnesota, North Dakota, Oklahoma and Pennsylvania. Twenty-seven followed suit that year. Across the country, governors weighed the boon of federal dollars — Washington would foot half of Medicaid’s bill — against the drawback of putting state money into a new program.
Nascent Medicaid programs quickly faced threats: Republican legislators in the New York introduced a bill in 1967 calling for the state to “live within its means” and repeal its Medicaid program.
Doctors, meanwhile, lamented the bureaucracy and griped that payments often arrived late. “Doctors’ complaints tie up our telephone lines all day, every day,” Frederick W. Richmond, chairman of the Citizens Committee for Medicaid, told the New York Times in 1967. Some pharmacists voted to boycott the program.
Over time, however, the lure of federal dollars proved strong enough to win over the holdouts. Eleven joined the program in 1967. Eight more, mostly Southern states, came on board in 1970. Arizona held off until 1982.
“It was pretty ideological for a long time,” said Brecher, who studied the Arizona case. “This was the Arizona of Barry Goldwater, and they didn’t want to participate in a federal program.”
Arizona counties saw indigent health-care costs rising — from $50 million in 1974 to $125 million in 1980 — and petitioned the legislature to accept federal funds. Critics argued that Arizonans paid federal taxes to support the program, and ought to see some benefit from it.
“The counties were operating local hospitals and expenses were going up,” Brecher said. “They said, ‘Why don’t you get federal money for this?’ ”
Some states have considered leaving the program — a handful of Texas lawmakers floated the idea as recently as 2011 — but have never taken meaningful steps toward such action. The federal government now sends states $263 billion in Medicaid funding annually.