Health Care Law Medicaid Expansion: If States Refuse, Where Does That Leave The Poor?

on June 29 2012 4:41 PM
medicaid
Some of the nation's poorest people could have no access to health care if states decide to opt out of the Affordable Care Act's Medicaid expansion. Reuters

The U.S. Supreme Court's decision to uphold the Affordable Care Act will expand health insurance for many of the approximately 50 million Americans who are currently uninsured. But, while the nation's high court upheld most of the health care reform law on Thursday, its ruling that the law could not force states to expand Medicaid services means there is one group that still may not be able to obtain health coverage: the poor.

Although the court upheld the law's mandate requiring individuals to purchase insurance, the justices partially struck down the expansion of Medicaid under the law, which -- as it stands -- would expand free health coverage to an estimated 16 million low-income individuals and families by 2019.

Currently, Medicaid is a joint federal-state program that provides health care to certain poor Americans, such as children, the elderly and the disabled. In 2014, the Affordable care Act opens Medicaid to anyone with an income under 133 percent of the federal poverty line; the law, as it originally stood, would have revoked federal Medicaid funding to states that did not comply with the expansion.

The 2012 federal poverty level is $11,170 for a single person and $23,050 for a family of four, according to figures from the U.S. Department of Health and Human Services.

While the strategy was certainly intended to guarantee the poorest would have access to health care options, the Supreme Court ultimately ruled that essentially forcing states to opt out of Medicaid completely if they did not comply with the expansion is something no state can afford to do. In his opinion, Chief Justice John Roberts wrote the provision was like a gun to the head of the states and declared states have the option to opt in or out of the program, without losing full Medicaid funding.

Somewhat paradoxically, the 26 states that challenged the health care law's Medicaid provision together account for an estimated 8.5 million of the 16 million who would benefit from the expansion, according to a ProPublica analysis of data from the Urban Institute. Many states have complained that adding more people to their Medicaid rolls would be a crushing burden on their budgets, even though the federal government is expected to cover almost 93 percent of the costs of the $930 billion expansion from 2014 to 2022, according to the Center on Budget and Policy Priorities.

The Republican Rebellion

Conservative heavyweights are already urging state leaders not to enforce aspects of the health care bill before the November election. Rep. Michelle Bachmann, and Sen. Jim DeMint are sending letters to governors across the nation in an attempt to delay the implementation of state health insurance exchanges as well as the Medicaid expansion, possibly a political move to strengthen future repeal efforts.

But, while some red-state governors have already denounced the health care law, others have been vague about their intentions. As can be expected, Tea Party favorites such as Louisiana Gov. Bobby Jindal and Wisconsin Gov. Scott Walker promptly spoke out after the ruling, declaring they would not implement the exchanges or any aspect of Obamacare in their states.

Still, other nationally-recognized Republicans have held off on their attacks. Indiana Gov. Mitch Daniels -- once a rumored running mate for GOP presidential hopeful Mitt Romney -- said the state legislature would decide whether to expand Medicaid, according to media reports. In a statement, Ohio Gov. John Kasich did not explicitly denounce the health care law, but noted that state officials are concerned that a sudden, dramatic increase in Medicaid spending could threaten Ohio's ability to pursue needed reforms in other areas.

In the end though, Virginia Gov. Bob McDonnell, the head of the Republican Governors Association, predicted his colleagues will not have a blanket opposition to expanding their Medicaid programs, telling reporters that most governors are going to do what they think is best for their states.

So Where Does That Leave The Poor?

Many of the people qualifying for the Medicaid expansion -- single adults who earn $14,404 or less per year and families of four pulling in less than $31,000 -- likely do not have the resources to obtain health coverage without the government expansion.

Plus, those qualifying for the Medicaid coverage are not eligible for federal subsidies to purchase private insurance via insurance exchangers, which are reserved for people with incomes between 133 percent to 400 percent of the federal poverty level.

While those people would probably be waived from paying a penalty for not having insurance -- a provision of the law's individual mandate, which exempts the penalty for individuals who earn so little they do not have to file tax returns -- their options for obtaining affordable insurance coverage would be slim to none.

But there's still time. States do not have to make their final decision regarding the Medicaid expansion until next summer, although they do have to make preparations to implement the program before that time, according to Kaiser Health News.  

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