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Medicaid Expansion

In the U.S. Supreme Court Affordable Care Act (ACA) decision, the justices effectively rendered the expansion of Medicaid coverage to nonelderly adults with incomes below 138 percent of the federal poverty level as optional for states.  Before the ACA, few states covered nonelderly, adults without disabilities up to this income level. If a state elects not to implement the ACA Medicaid expansion, some people who would have received Medicaid could instead receive federal tax credits and other subsidies in order to participate in a Health Insurance Exchange health plan. However, cost sharing would be higher than if they had been enrolled in Medicaid.  Also, employers would incur penalties for employees using such assistance to enroll in a health plan. 

Regarding implementation of the childless adult eligibility group, as of July 11, 2012, states have taken one of five key positions:

  • Yes – state will implement (13)
  • Undecided – leaning towards yes (1)
  • Undecided (22)
  • Undecided – leaning towards no (8)
  • No – (7)

Despite the possibility to leverage 100 percent federal funding and ongoing federal Medicaid matching rate higher than the states standard matching rates, several states have expressed concern about potential costs associated with the expansion.  Specifically, a number of states have expressed concern about the new coverage option leading to a “woodwork” effect and producing costs which would consume any additional funding the state would have experienced from enhanced federal matching. 

The map below provides an overview of state positions on implementation as of July 11, 2012, and whether or not the state engaged in litigation to prevent ACA implementation.

Source: Vlebeck, E., “Fifteen Governors Reject or Leaning Against Expanded Medicaid Program.”  The Hill.  July 3, 2012 & AHCA Research