While the Supreme Court’s ruling on Medicaid will continue to be evaluated – states are already reacting. Iowa and Florida have already announced that they will not be expanding their Medicaid program – by the time this article is posted another state may agree to do the same thing.

What does this mean for the residents of those states?

Residents in Iowa and Florida who would have qualified for the Medicaid expansion may now be eligible for the subsidies on the health insurance exchanges. But, those individuals will have to pay out-of-pocket for health insurance and then will receive subsidies for the coverage. If consumers don’t purchase coverage they will pay a fine starting in 2014 or have to prove that they couldn’t afford it.

Are there unintended consequences?
There definitely could be some unintended consequences of states not participating in the Medicaid expansion: 1) Individuals moving to states where they qualify for Medicaid and free health coverage, 2) The federal government may spend more on subsidies than originally expected because more people will be eligible.

Why wouldn’t states expand Medicaid?
In the past couple years, many states have been working to cut their current Medicaid benefits and payouts to hospitals and health care providers. From the recession, many state budgets have been pinched by Medicaid and have found it to be unstable.

But for the first few years of the expansion, the federal government was going to pick up the entire cost and then slowly make states pay some of the cost. So the decision could be purely political.