WHILE THE June Supreme Court decision upholding the Affordable Care Act was an overall public health victory, it left one key provision in doubt: state Medicaid expansions.
In addition to reducing the number of uninsured Americans by offering tax credits for health insurance and preventing coverage denials to those with pre-existing conditions, the Affordable Care Act was designed to expand Medicaid to more low-income Americans. If fully enacted, the move would insure as many as 17 million more people.
"One of the major goals of the Affordable Care Act was to expand coverage to nearly everyone, and the Medicaid expansion was a critical part of that," Sara Collins, PhD, vice president for affordable health care at the Commonwealth Fund, told The Nation's Health. "It's really critical that states do this."
However, as part of the June 28 ruling, the court said that the federal government cannot financially penalize states for failing to expand their Medicaid programs, leaving the benefit in jeopardy.
As passed under the Affordable Care Act, states are required to expand coverage under their Medicaid programs to residents with family incomes up to 133 percent of the federal poverty level. However, the law also includes a 5 percent "income disregard," which means a portion of income will not be counted when determining a person's Medicaid eligibility. Therefore, the income disregard raises the Medicaid eligibility level to 138 percent of the poverty level for many applicants.
While some governors pledged after the ruling not to expand Medicaid because of budget concerns, the financial argument against the expansion may not hold water, some analyses show. Under the law, the federal government will pay 100 percent of the cost to insure additional people under Medicaid beginning in January 2014, reducing that after the first three years until in 2020, the federal portion of the tab drops to 90 percent.
For states, that is an enticing offer, according to a July report that examined the impact of Medicaid expansion in Florida, where Gov. Rick Scott has pledged not to expand Medicaid eligibility. The report, from the Florida Center for Fiscal and Economic Policy, found that if policymakers reject Medicaid expansion, the decision will cost the state "$20 billion in unused federal dollars and tens of thousands of new jobs, while denying the lowest-income workers and families much-needed coverage."
Not expanding Medicaid would put increasing pressure on safety net providers and burden states financially with uncompensated care, said Bruce Siegel, MD, MPH, president and CEO of the National Association of Public Hospitals and Health Systems. …