Expanding Medicaid – A Safety Net or a Hammock

Written by Yvonne Oliver

The Supreme Court ruling on the Affordable Care Act (ACA) allowed states to opt of the law's Medicaid expansion, leaving each state's decision to participate in the hands of the nation's governors and state leaders.

An estimated 50 million low income adults who are currently uninsured between the ages of 19-65 will be left without healthcare coverage when states opt not to expand the Medicaid provisions in their states.  Only 28 states have expanded their states Medicaid programs.

 States that are "leaning" one way or the other are states in which lawmakers have broadcast their positions on the expansion, but have not completed the necessary actions to achieve—or totally rule out—expansion in their states

As part of the Affordable Care Act's (ACA) broader effort to ensure health insurance coverage for all U.S. residents, the federal government will pay to expand Medicaid eligibility in every U.S. state beginning in 2013.

From 2014 to 2017, the federal government will pay for 100% of the difference between a state's current Medicaid eligibility level and the ACA minimum. Federal contributions to the expansion will drop to 95% in 2017 and remain at 90% after 2020, according to the ACA

As the ACA was originally written, states would lose all Medicaid funding if they refused to expand their program to the ACA minimum.

However, the Supreme Court in June 2012 ruled that the federal government could not withhold Medicaid funding for states that chose not to expand their programs. The decision effectively allowed state officials to opt out of the expansion, and some have said they will do just that.

Who is eligible for Medicaid under the ACA expansion?

States that participate in the ACA expansion must provide Medicaid coverage to all state residents below a certain income level.

Specifically, participating states must cover all residents ages 19 to 65 who have a household income below 133% of the federal poverty level (FPL), with a 5% income disregard. Effectively, this means that adult residents with a household income below 138% of the FPL would be eligible for Medicaid under the expansion. That's nearly $32,000 for a family of four, and $15,400 for an individual.

What is at risk for states that do not expand coverage?

Healthcare cost will continue to rise – the expense from uncompensated care will have to be absorbed.  Families without health coverage would be forced to seek coverage wherever they could, and that includes emergency rooms where they have no way to pay the bill.  Taxpayers in states where Medicaid is not expanded will see the federal dollars allocated for this program going to states that have made the decision to expand.  Premiums in the health insurance marketplaces would increase and employers would be at risk of penalties for uninsured employees.  Hospitals would be at risk, because billions of dollars in ‘disproportionate share’ payments that currently go to hospitals treating a large number of low income patients will be reduced at the beginning of 2014.

Where does your state stand on the Medicaid expansion?

If you live in a state where your legislators are still trying to decide if the Medicaid Expansion is a ‘safety net’ or a ‘hammock’ let them know that Medicaid must be expanded.  Under the ACA, the Medicaid Expansion will provide coverage to people at only a fraction of the cost of current programs.  States will save billions of dollars by adding federal funds and reducing the amount of uncompensated care, and will provide a needed economic boost in tough times.

Take action by writing, calling or visiting your state legislator your where you stand. You can find contact information for your federal and state elected officials here:

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