Close Close

Regulation and Compliance > State Regulation

States eye PPACA Medicaid money

Your article was successfully shared with the contacts you provided.

WASHINGTON (AP) — States are in the process of deciding whether to take their share of the new Medicaid expansion funding provided by the Patient Protection and Affordable Care Act (PPACA).

Some states are eager to take new PPACA federal funding to expand access to what is commonly thought of as being a state-funded program for low-income people.

“State” Medicaid programs actually get much of their funding and many of their operating rules from Washington, and some states are asking whether taking the new money is wise.

The PPACA Medicaid funding provision could provide a total of about $1 trillion over a decade.

Turn the PPACA funding down, and governors risk coming off as callous toward their neediest residents.

If the Obama administration were to compromise, say by sweetening the offer to woo a reluctant state, it would face immediate demands from 49 others for similar deals that could run up the tab by tens of billions of dollars.

As state legislatures look ahead to their 2013 sessions, the calculating and the lobbying have already begun.

Conservative opponents of PPACA are leaning on lawmakers to turn down the Medicaid money. Hospitals, doctors’ groups, advocates for the poor, and some business associations are pressing them to accept it.

“Here’s the big thing: The state does not want to expand Medicaid and get stuck with the bill,” said Dr. Bill Hazel, Virginia’s health secretary. “Our legislators do not like to raise taxes to pay for a benefit someone else has promised. The concerns we have … are around federal solvency and the ability of the federal government to meet its commitment.”

Medicaid covers nearly 60 million low-income and disabled people but differs significantly from state to state. Under the health care law, Medicaid would be expanded on Jan. 1, 2014, to cover people making up to 138 percent of the federal poverty line, or about $15,400 a year for an individual.

About half the 30 million people gaining coverage under the law would do so through Medicaid. Most of the new beneficiaries would be childless adults, but about 2.7 million would be parents with children at home. The federal government would pay the full cost of the first three years of the expansion, gradually phasing down to a 90 percent share.

The Supreme Court said states can turn down the Medicaid expansion. But if a state does so, many of its poorest residents would have no other way to get health insurance. The subsidized private coverage also available under Obama’s law is only for people making more than the poverty level, $11,170 for an individual. For the poor, Medicaid is the only option.

Although the health care law fully funded the Medicaid expansion and Obama has protected the program from cuts, the federal government’s unresolved budget struggles don’t give states much confidence.

Most states, including Republican-led Virginia, are considering their options.

A recent economic analysis by the nonpartisan Kaiser Family Foundation and the Urban Institute found that states will receive more than $9 from Washington for every $1 they spend to expand Medicaid, and a few will actually come out ahead, partly by spending less on charity care. States are commissioning their own studies.

So far, eight states have said they will turn down the expansion, while 13 states plus the District of Columbia have indicated they will accept it. The eight declining are Alabama, Georgia, Louisiana, Maine, Mississippi, Oklahoma, South Carolina, and Texas. Nearly 2.8 million people would remain uninsured in those states, according to Urban Institute estimates, with Texas alone accounting for close to half the total.

Hospitals aren’t taking “no” for an answer in the states that have turned down the expansion. Although South Carolina’s Republican Gov. Nikki Haley has had her say, the Legislature has yet to be heard from, said Thornton Kirby, president of the South Carolina Hospital Association.

Hospitals agreed to Medicare cuts in the health care law, banking on the Medicaid expansion to compensate them.

“We’ve got a significant debate coming in January,” said Kirby. “There are a lot of people tuning in to this issue.”

In Maine, Democrats who gained control of the Legislature in the election are pushing to overcome Republican Gov. Paul LePage’s opposition.

“Obamacare” was once assailed as a job killer by detractors, but on Wednesday in Missouri it was being promoted as the opposite. Missouri’s hospital association in released a study estimating that the economic ripple effects of the Medicaid expansion would actually create 24,000 jobs in the state. The University of Missouri study found that about 160,000 state residents would gain coverage.

“This is not a political issue for us … this is the real world,” said Joe Pierle, head of the Missouri Primary Care Association, a doctors’ group. “It makes no sense to send our hard-earned federal tax dollars to our neighbors in Illinois.”

By Thursday, Gov. Jay Nixon, D-Mo., had announced his support for the expansion, but he faces a challenge in persuading Republican legislative leaders.

In Florida, where GOP Gov. Rick Scott says he is rethinking his opposition, the state could end up saving money through the Medicaid expansion, said Joan Alker, executive director of the Georgetown University Center for Children and Families, which studied the financing. The reason is that Florida would spend less on a state program for people with catastrophic medical bills.

Back in Washington, Health and Human Services Secretary Kathleen Sebelius says states can take all the time they need to decide. They can even get a free trial, signing up for the first three years of the expansion and dropping out later.

But she hasn’t answered the one question that many states have: Would the Obama administration allow them to expand Medicaid just part way, taking in only people below the poverty line? That means other low-income people currently eligible would be covered entirely on the federal government’s dime, and they would be getting private coverage, which is costlier than Medicaid.

Matt Salo, executive director of the National Association of Medicaid Directors, says he doesn’t think states will get an answer anytime soon.

“This is a game of chicken that we’re seeing,” said Salo. “Are the states bluffing, or are these states really serious? And at what point does the administration rethink things, and decide it’s worth getting half a loaf?”

Who’s doing what?
An early look at the routes states are taking to implement the health insurance exchange and Medicaid expansion provisions of PPACA, along with the number of people in each state who don’t have health insurance:

Alabama Federal exchange Not expanding 696,000
Alaska Federal exchange Decision pending 128,000
Arizona Federal exchange Decision pending 1,306,000
Arkansas Federal-state partnership Decision pending 545,000
California State exchange Expanding 7,471,000
Colorado State exchange Decision pending 817,000
Connecticut State exchange Expanding 391,000
Delaware Federal-state partnership Expanding 115,000
Washington, D.C. State exchange Expanding 65,000
Florida Decision pending Decision pending 3,952,000
Georgia Federal exchange Not expanding 1,992,000
Hawaii State exchange Expanding 102,000
Idaho Decision pending Decision pending 239,000
Illinois Federal-state partnership Expanding 1,795,000
Indiana Federal exchange Decision pending 856,000
Iowa Decision pending Decision pending 292,000
Kansas Federal exchange Decision pending 361,000
Kentucky State exchange Decision pending 727,000
Louisiana Federal exchange Not expanding 811,000
Maine Federal exchange Not expanding 146,000
Maryland State exchange Expanding 734,000
Massachusetts State exchange Expanding 215,000
Michigan Federal-state partnership Decision pending 1,336,000
Minnesota State exchange Expanding 453,000
Mississippi State exchange Not expanding 530,000
Missouri Federal exchange Decision pending 780,000
Montana Decision pending Decision pending 179,000
Nebraska Federal exchange Decision pending 226,000
Nevada State exchange Decision pending 555,000
New Hampshire Decision pending Decision pending 136,000
New Jersey Decision pending Decision pending 1,334,000
New Mexico State exchange Decision pending 506,000
New York State exchange Expanding 2,780,000
North Carolina Federal-state partnership Decision pending 1,583,000
North Dakota Decision pending Decision pending 74,000
Ohio Federal-state partnership Decision pending 1,578,000
Oklahoma Federal exchange Not expanding 597,000
Oregon State exchange Expanding 678,000
Pennsylvania Decision pending Decision pending 1,319,000
Rhode Island State exchange Expanding 122,000
South Carolina Federal exchange Not expanding 754,000
South Dakota Federal exchange Unlikely in 2014 108,000
Tennessee Decision pending Decision pending 982,000
Texas Federal exchange Not expanding 6,654,000
Utah Decision pending Decision pending 424,000
Vermont State exchange Expanding 61,000
Virginia Federal exchange Decision pending 1,023,000
Washington State exchange Expanding 812,000
West Virginia Federal-state partnership Decision pending 266,000
Wisconsin Federal exchange Decision pending 562,000
Wyoming Federal exchange Decision pending 84,000

Source: Associated Press research, HHS and the Urban Institute.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.