Medicaid expansion in the states

June 19, 2013

medicalOne of the key features of the Affordable Care Act (ACA) is the expansion of state Medicaid coverage beginning in 2014.  However, the Supreme Court, in National Federation of Independent Business v. Sebelius, effectively gave the states the power to opt in or out on Medicaid expansion.  One year after that case and less than six months before the end of the year, only about half the states are moving toward expansion.  Fifteen states are firmly opposed.  The issue is unresolved in about nine states.

The stakes.  The ACA contains significant inducements.  For states that expand Medicaid to cover persons with incomes up to 133% of the poverty level, the federal government will cover 100 % of the added expense during the first three years; after 2016 support slowly declines to 90 % coverage beginning in 2022.  There is no deadline; a state may opt in at any time.

A report by the Rand corporation, focused on fourteen states opposing expansion, estimates that in those states 3.6 million fewer people would be insured, federal transfer payments could fall by $8.4 billion, and spending on uncompensated care could increase by $1 billion in 2016.

On second thought.  In the face of these numbers, GOP governors in nine states have reversed initial opposition to Medicaid expansion and now endorse it.  These governors are Jan Brewer (AZ), Chris Christie (NJ), Rick Scott (FL), Rick Snyder (MI), John Kasich (OH), Susana Martinez (NM), Terry Branstad (IA), Brian Sandoval (NV), and Jack Dalrymple (ND).

Wait a minute.  While a majority of governors (and the mayor of DC) now endorse Medicaid expansion, Republican-controlled legislatures have been slow to come around.  In some cases, notably Florida, movement toward expansion has ground to a halt.  By contrast, in Arizona, Governor Brewer worked with moderate Republicans and Democrats to pass expansion legislation over the opposition of legislative leaders.

On the other hand, Missouri, Montana, and New Hampshire, with Democratic governors and Republican-controlled legislatures, continue to battle without resolution.  And in Maine, Republican Governor Paul LePage vetoed a bill attaching Medicaid expansion to provisions otherwise acceptable to Republicans.   By contrast, Iowa, with a divided legislature, eventually achieved a compromise.

Love me, love my plan.  Some states supported President Obama in the 2012 election but are not (or not yet) opting to expand Medicaid:  Florida, Maine, Michigan, New Hampshire, Pennsylvania, Virginia, and Wisconsin.  All of these states have Republican governors.  By contrast, some states supported Governor Romney but have moved to expand Medicaid:  Arizona, Arkansas, Kentucky, North Dakota, and West Virginia.

Let’s make a deal.  Three states have adopted plans for alternatives to Medicaid expansion and submitted requests for waivers to the federal government.  Plans submitted by Arkansas and Iowa have been approved.  The plan from Indiana is under consideration.

The ACA comes into full effect on January 1, and yet wild inconsistencies among the states remain with regard to Medicaid expansion.  It will be interesting to see what if any resolution occurs in the next six months.