How Will The Supreme Court’s Medicaid Decision Affect You?

While supporters of the Affordable Care Act have spent the day reveling in this morning’s Supreme Court ruling and its detractors have vowed that they will continue to fight the law through legislative means — there is also a third group of people who think that moving to Canada would somehow teach America a lesson about a national health care law — what’s been left out of most of the discussion are the ramifications of the Supremes’ ruling against the portion of the bill that penalizes states that don’t contribute to Medicaid expansion.

Under the ACA, the federal government foots the bill for most of the expansion. However, states are expected to kick in some funds for the effort. As it was written, the law would penalize states that did not contribute by withholding federal funding.

Chief Justice Roberts wrote in the court’s ruling that this “gun to the head” approach was unconstitutional, leaving it up to each state to decide its level of participation. The court ruled it would be appropriate to offer benefits to participating states but not to threaten non-participating states with penalties.

The question is, which states will hold out and how many people would be affected?

As written, the ACA requires states to extend Medicaid coverage to non-elderly individuals with incomes up to 133% of the poverty line. For a family of four, that would peg that number at around $30,700.

If all states were to be involved, this would extend Medicaid coverage to around 16 million people by 2019.

But remember that attorneys general for 26 states — Florida, South Carolina, Nebraska, Alaska, Texas, Utah, Louisiana, Alabama, Michigan, Nevada, Arizona, North Dakota, Indiana, Mississippi, Georgia, Colorado, Pennsylvania, Washington, Idaho, South Dakota, Maine, Wisconsin, Ohio, Kansas, Iowa and Wyoming — took part in the lawsuit challenging the individual coverage mandate.

According to an analysis by ProPublica, there are about 8.5 million people in those 26 states who would currently benefit from the Medicaid expansion. This doesn’t include Virginia and Oklahoma, which filed their own legal grievances regarding the ACA.

According to a separate Kaiser foundation report, “Medicaid currently provides health coverage for over 60 million individuals, including 1 in 4 children, but low parent eligibility levels and restrictions in eligibility for other adults mean that many low income individuals remain uninsured. The ACA expands coverage by setting a national Medicaid eligibility floor for nearly all groups.”

A report by the Center on Budget and Policy Priorities estimates that between 2014 and 2022, the ACA would have the federal government paying for about 93% ($931 billion) of the nearly $1 trillion cost for the expansion, with states kicking in around $73 billion during that period.

Through 2016, the feds are supposed to pay for all the people newly covered by Medicaid, with that $73 billion from the state gradually phased in during the next six years. The goal is to have the federal portion only be 90% by 2020.

If the 28 states involved in the various lawsuits decide to not contribute to the expansion, it would throw a bit of a wrench into this plan, as the federal government would need to account for at least half of that $73 billion.

This could mean the federal government extends itself even further, subsidizing a larger portion of the Medicaid bill than it had planned, or perhaps revising down the number of people eligible for expanded Medicaid coverage.

Since the feds have been enjoined against penalizing non-participating states, it will more likely result in states being offered incentives that would be hard to pass up.

“While 28 states had opposed the requirement to expand Medicaid programs for citizens with low incomes, it is not at all clear what they will actually do now that it is no longer a mandate,” explains DeAnn Friedholm, Consumers Union’s Campaign Director of Health Care Reform, in a statement to Consumerist. “States will face the reality that they will be giving up millions or billions of federal dollars and still end up with hundreds or thousands of uninsured people who will drive up health care costs for everyone else.”

Of course, none of this is set in stone. Political winds can change direction unpredictably and quickly. Who knows who will be running these states — or even the White House — two years from now when this expansion is slated to start.

Mystery After the Health Care Ruling: Which States Will Refuse Medicaid Expansion? [ProPublica]