ACA Medicaid decision leaves more questions than answers

Arguably the most unexpected aspect of the Supreme Court’s Affordable Care Act decision was its reversal of the mandatory expansion of Medicaid.

The law aimed to boost Medicaid rolls by requiring states to add many more low-income families – increasing the number of people receiving Medicaid coverage nationally to an estimated 16 million people by 2019 according to the Kaiser Family Foundation.

The ACA compelled states by 2014 to cover all adults under the age of 65 with incomes below 133 percent of the federal poverty level ($14,856 a year for an individual and $30,657 for a family of four in 2012). The federal government would initially pick up 100 percent of the tab, gradually reducing its contribution to 93 percent in 2019.

If states didn’t comply, they risked losing all federal Medicaid money, even for their existing programs. SCOTUS ruled that expelling states from Medicaid if they don’t expand their coverage amounts to “coercion” and is unconstitutional.

Right now, the federal government requires that states extend Medicaid to certain mandatory groups, including pregnant women with incomes up to 133 percent of the federal poverty level and children under age 19 living in families below 133 percent or 100 percent of the poverty level depending on their age. States can determine whether to cover childless adults, and most of the 51 different plans don’t.

Now, with the Supreme Court’s decision it is unclear exactly what states will decide when it comes to expanding coverage. Many states (like Illinois) have already made dramatic cuts to their programs because of a fiscal crisis. For more context, Phil Galewitz from Kaiser Health News and Robert Pear and Michael Cooper of the New York Times look at why some states might choose not to expand Medicaid. 

Dr. Bruce Siegel, President and CEO of the National Association of Public Hospitals and Health Systems, said the 26 states that were part of the lawsuit as well as a few others like Missouri, New Hampshire, New Jersey and Virginia might forgo expansion.

“If you look at those 30 states, they have close to 13.8 million people that would have been covered by expansion,” he said. “Sixty percent of the total expansion would have taken place in these states; it is bigger than we realized initially.”

Between now and 2014 when the ACA goes into effect, key questions remain in the face of SCOTUS’s decision. Martha King, health program group director for the National Conference of State Legislatures, provides some tips on how reporters, community providers and policy makers may want to track this unfolding landscape (King will speak at the upcoming National Health Journalism Fellowship July 22-26): 

• What is the deadline for states to decide if they are going to take the federal money and expand their Medicaid programs?
• If states choose not to expand Medicaid coverage in 2014, will they have the option to do so in the future?  If so, what will the federal matching rate be?
• Will states that currently have higher income eligibility be able to expand their Medicaid programs to a higher percentage above the poverty level and still receive the more generous federal match? Can they phase in higher incomes over time?
• Does the SCOTUS ruling change the ACA’s existing requirements for states that expand Medicaid to keep that coverage going through 2019? (Here is more information on what’s known as “maintenance of effort.”)
• When the maintenance of effort requirement expires, will states that don’t expand their programs be able to roll back eligibility levels further?
• If a state doesn’t expand Medicaid, what will happen with the low-income people not getting coverage? According to the law, tax credits for the exchanges kick in for adults with incomes above 100 percent of the federal poverty level. In theory, there will now be a host of low-income adults not receiving Medicaid or tax credits. For example, Medicaid in Texas only covers parents up to 26 percent of the poverty level; theoretically, parents between 26 percent and 99 percent would receive no help. 
• What health care stakeholders will emerge as proponents and opponents of expansion in the states and what role will providers play (especially hospitals)?
• Finally, what will foregoing the expansion mean for a state’s safety net providers? As part of the ACA, hospitals that treat large numbers of low-income individuals will lose much of the federal funding (disproportionate share hospital (DSH) payments) that helps pay for charity care they provide. The expanded coverage was supposed to make up for those lost funds. How will they make up for any deficit?

Image by Mike Licht of NotionsCapital.com via Flickr.