Many Republicans have never forgiven New Jersey Governor Chris Christie for his effusive praise for President Obama days before the 2012 presidential election. Obama’s leadership, said Christie, had been “outstanding” after Hurricane Sandy. But a less-remarked-upon decision by Gov. Christie—to embrace Obamacare’s expansion of Medicaid—is of much greater policy significance.
(DISCLOSURE: I am advising Sen. Marco Rubio, but the opinions in this post are mine, and do not necessarily correspond to those of Sen. Rubio.)
More than half of Obamacare’s expansion of coverage and spending comes from Medicaid
As originally enacted in 2010, Obamacare—then known as the “Patient Protection and Affordable Care Act”—required every state to expand its Medicaid program, or face the consequence of having the federal government pull out of the state’s preexisting Medicaid program.
However, in 2012, the Supreme Court determined that this provision in Obamacare exceeded the federal government’s authority. In its opinion in NFIB v. Sebelius, the high court ruled that states must have the option to accept or decline Obamacare’s expansion of Medicaid.
Christie boasted that Obamacare’s Medicaid expansion would benefit New Jersey
The vast majority of states under Republican control have refused to expand Medicaid under Obamacare. Gov. Christie, however, decided to implement the expansion. “Expanding Medicaid…is the smart thing to do for our fiscal and public health,” said Christie in February 2013. “Accepting these federal resources will provide health insurance to tens of thousands of low-income New Jerseyans.”
Christie argued that New Jersey taxpayers would save $227 million in 2014, because the federal government’s infusion of Medicaid dollars would pay for uncompensated care for the uninsured, and because some of New Jersey's spending on Medicaid will be replaced by federal spending on Medicaid.
In Christie's best-case scenario, then, it's not so much that New Jersey will spend less, but that the entire country will spend more. Indeed, if you include federal spending, the New Jersey Medicaid expansion will increase U.S. taxpayer liabilities by as much as $25 billion through 2022.
And it's far from clear that Christie will be proven right about Obamacare's fiscal benefits for New Jersey. Through 2022, the Heritage Foundation estimates that Christie’s Medicaid expansion will cost New Jersey taxpayers about $1.2 billion.
Those estimates precede news that the New Jersey Medicaid rolls have increased by over 400,000 since Christie’s decision. That’s 71 percent more than the 233,000 that the expansion was projected to cover in 2012. In April, the Wall Street Journal reported that the state had been "overwhelmed" by the surge in enrollment.
How will Christie debate Hillary on Obamacare?
Chris Christie, it must be said, is no John Kasich, the Ohio governor who like Christie is running for President. Kasich has said that opponents of Obamacare’s Medicaid expansion will rot in hell, and implemented the expansion over the objections of Ohio’s Republican-controlled state legislature. Christie governs a reliably blue state with a Democratic legislature.
Nonetheless, Christie’s decision to expand one of the nation’s largest entitlement programs stands in contrast to his stated desire to reduce entitlement spending. “Every other national priority will be sacrificed, our economic growth will grind to a complete halt and our national security will be put at even greater risk,” said Christie earlier this year, in making the case for entitlement reform. But Medicaid is one of the entitlements causing all of those problems—and Christie expanded it under Obamacare.
Of the 32 million people who were to gain health coverage under Obamacare, half were to get that coverage from the law’s expansion of Medicaid. From a fiscal and coverage standpoint, half of Obamacare consists of its expansion of Medicaid: $824 billion in new spending from 2016 to 2025. In reality, the majority of Obamacare’s spending has come from Medicaid, because the law’s exchanges have performed so poorly.
Christie has repeatedly stated his desire to “repeal and replace Obamacare”—while simultaneously arguing that the half of Obamacare that is its expansion of Medicaid is a good thing. It’s hard to be an effective spokesman for the repeal of Obamacare if you’ve embraced one of the law’s central tenets. It would take Hillary Clinton less than 30 seconds to make mincemeat of Christie’s health care positions, as far as they have been disclosed, in a presidential debate.
Has this Congress repealed/ replaced Obamacare? NO. https://t.co/4pyDgoAd4X #DearDC
— Chris Christie (@ChrisChristie) October 10, 2015
Chris Christie has done some good things in his time on the national stage. He has defended the cause of modest entitlement reform when other presidential candidates—like Donald Trump and Mike Huckabee—have opposed reform altogether. He showed that Republicans could win in blue states like New Jersey.
But it’s hard to escape the conclusion that, when it came to Obamacare’s crucial expansion of Medicaid—the most important decision Governors have had to make in the past five years—Gov. Christie chose blue state principles over conservative ones.
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INVESTORS’ NOTE: The biggest publicly-traded players in Obamacare’s Medicaid expansion UnitedHealth (NYSE:UNH), Molina (NYSE:MOH), Anthem (NYSE:ANTM), and Centene (NYSE:CNC).
