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Prior to the Supreme Court striking down the mandatory Medicaid expansion piece in the Affordable Care Act, states were required to ratchet up their Medicaid enrollees. This was the provision that, during the oral arguments, collected chuckles inside and outside the court’s chamber for its Mafia-esque "uniquely coercive" nature, which Justice Antonin Scalia likened to the feds holding a gun to states and making them an offer they can’t refuse.
Based on the Supreme Court’s ruling, states now can, in fact, refuse to expand Medicaid without losing federal funding. But how does that bode for the future of Medicaid?
To find out, Government Health IT interviewed Claudia Page, co-director of Social Interest Solutions, a non-profit technology and policy organization that helps connect low-income families to programs such as Medicaid.
Q: What is the impact of the Court's ruling on the Medicaid expansion, in terms of numbers of enrollees they have to support?
A: Pre-Court ruling, states were required to expand Medicaid to all residents up to 133 percent of the Federal Poverty Level (FPL) or lose the state's federal support for Medicaid. This meant 16 million people could now be covered by Medicaid. Fifteen million of those people would be newly eligible – meaning states did not cover this population before ACA; one million were presumed currently eligible but not enrolled in Medicaid. The term "newly eligible" is important when it comes to financing.
Q: So who pays for the 16 million people eligible for Medicaid under the ACA Medicaid expansion?
A: Under ACA, states receive 100 percent federal financing for newly eligible individuals from 2014-2016, with federal support tapering and eventually leveling at 90 percent federal and 10 percent state financing in 2020. The vast majority of financing for this expansion thus comes from the federal government.
Q: Why are some states resisting expansion?
A: Multiple reasons. First, fiscal implications of the 10 percent state share of financing states will assume in 2020. Second, the opportunity to push for greater state flexibility in financing and structure of state Medicaid programs. And, third, the political environment, in particular the November elections.
Q: What are potential implications for states that resist expansion?
A: Some states opting not to expand Medicaid will not have a coverage option for individuals between 100 percent FPL and the state's current Medicaid threshold – which for some states is 22 percent for adults. That essentially means a "donut hole" between Medicaid and the Premium Tax Credits offered via ACA, leaving the most vulnerable and needy individuals without a coverage option.
[Political Malpractice: Are politics extinguishing state insurance exchanges?]
Coordination of eligibility and coverage for this population will be challenging. Also, costs for uncompensated care for non-covered individuals will continue to be high. Safety net providers and public hospitals serving this population will continue to be burdened with costs of serving the uninsured – especially troubling since an important provision of ACA is decreasing funding to hospitals that serve a "disproportionate share" of the uninsured today.
For more of our politics coverage, visit Political Malpractice: Healthcare in the 2012 Election.