Medicaid Expansion

The Advisory Board Company has been updating the above map showing the status of the ACA's Medicaid expansion by state. 

The ACA originally planned for the following:

• Households earning up to 100% of the Federal Poverty Limit (FPL) ==> eligible for Medicaid (the eligibility requirement prior to the ACA)
• Households earning 101-134% of the FPL ==> eligible for Medicaid (new under the ACA)
• Households earning 135-400% of the FPL ==> receive a sliding scale subsidy to buy private insurance (new under the ACA)
• Households earning more than 400% of the FPL ==> must have insurance or pay a penalty on their taxes (This is the "individual mandate".)

The majority of Americans receive their health insurance from their employer and thus meet the individual mandate.  Other programs cover various Americans and also meet the individual mandate:

• CHIP (Child Health Insurance Program) ==>  low-income children
• VA (Veterans Administration) ==> military veterans
• Medicare ==> seniors

You can view the 2013 Federal Poverty levels at:
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Eligibility/Downloads/2013-Federal-Poverty-level-charts.pdf

 In a case challenging the constitutionality of the ACA, however, the US Supreme Court upheld the ACA's overall constitutionality BUT ruled that -because Medicaid is jointly funded and ran by the states and Federal government- the states could opt out of expanding Medicaid.  Most of the states with Republican governors or Republican-controlled legislatures chose to not expand Medicaid.  Their decisions stemmed from both a show of opposition to the ACA overall and also a concern that the Medicaid expansion would strain state budgets.  Under the ACA, the Federal government pays 100% of the cost of the expansion at first.  After several years states must eventually pay for 10% of the cost of covering the increased number of their citizens insured via Medicaid.

Kentucky's Democratic governor, Steve Beshear, opted to expand Medicaid in my state.  Most of the Southern states' Republican governors chose otherwise.  Arkansas' Democratic governor came up with an alternative plan.

Consequences of Not Expanding Medicaid on the Uninsured

The Kaiser Family Foundation has done a report on the consequences for states that do not expand Medicaid:

http://kaiserfamilyfoundation.files.wordpress.com/2013/07/8457-the-cost-of-not-expanding-medicaid4.pdf

Among the consequences:

• More uninsured people:  Many of the states not expanding Medicaid have the most low-income uninsured Americans (Texas, Florida, etc.).  With these citizens barred from the Medicaid option in their states, they are likely to remain uninsured.

These uninsured citizens fall into a new Medicaid donut hole because they earn too much to qualify for Medicaid in their state and too little to qualify for the new ACA subsidies.  Jim Fuquay at the Fort Worth Star-Telegram describes this problem:
http://www.star-telegram.com/2013/09/28/5202327/medicaid-doughnut-hole-leaves.html

Consequences for Hospitals

 Hospitals for decades have followed a Federal law where they must treat or at least stabilize any patient coming through their doors.  In effect, they treat everyone to some extent.  If a patient is uninsured and cannot pay, then the hospital has two options to get reimbursement for its costs:

1. It can seek funding from a Federal fund that compensates hospitals for unpaid care to the poor.
2. It can pass on its costs for treating the uninsured by raising prices for its insured patients.

To help offset the cost of the ACA, the law gradually reduces the fund that compensates the hospitals.  Remember, the original ACA had most of these uninsured, non-paying citizens moved into an insurance plan -including the Medicaid expansion.  The fund will not be reduced until at least 2014, but the reduced compensation to hospitals will leave them with few choices except to raise prices on insured patients in the states that do not expand Medicaid.  Thus, the Republican-voting and Republican-controlled states that most oppose the ACA are more likely to see average insurance premiums rise as hospitals raise their prices to cover the costs of treating the uninsured.