Somewhere amidst all the chaotic chatter over the Supreme Court’s decision on health reform and upholding the individual mandate, you might have heard a brief murmur about a ruling on Medicaid expansion. If this were the movie, “Beaches,” the individual mandate was Bette Midler and Medicaid expansion was Barbara What’s-her-name.
However, the Supreme Court’s ruling that it is unconstitutional to force states to expand Medicaid or face a hefty fee deserves a lot more time in the spotlight. Let’s take a look at what went down with Medicaid yesterday.
What is Medicaid, anyway?
Medicaid is a program that provides low-income Americans with health care. Each state runs their individual Medicaid program under guidelines that the federal government has set and the fed pays a large sum of money to each state to keep the program running. This large sum varies between states, but the average amount the federal government pays each state is 57 percent of the bill.
Medicaid is basically the least expensive health insurance available. Medicaid-eligible individuals include low-income children, parents and those with disabilities. While it provides a necessary service to our nation’s poor, there are definitely limits to its coverage and it does not pay health service providers very well at all.
What was being ruled on in the first place?
The Patient Protection and Affordable Care Act (PPACA) included plans to widely expand the Medicaid program throughout the country. The law aimed to make Medicaid available to everyone with an income under 133 percent of the federal poverty level. Using the most current data, anyone who made $14,856 annually would be eligible, regardless of age or health condition.
The cost of the expanded Medicaid would initially be paid in full by the federal government. After several years, each state would have to pay 10 percent. Here’s where many states (26 to be exact) started to get upset: Failure to take the federal government up on their offer of expanding Medicaid could result in them losing their existing Medicaid funding. The 26 states were basically feeling blackmailed into expanding Medicaid coverage.
What was the final ruling?
The Supreme Court agreed that it was coercive and unconstitutional if the law worked to take away a state’s existing Medicaid funding. Justice Roberts stated, “In this case, the financial ‘inducement’ Congress has chosen is much more than ‘relatively mild encouragement’ – it is a gun to the head.
States have some critical decisions to make. Just because they now have the option to not expand Medicaid coverage doesn’t mean they won’t. Around 9 million people were expected to gain coverage in those 26 states as a result of the PPACA.
Keeping in mind that there is a huge financial incentive – 100 percent of care covered for newly added Medicaid participants for the first 3 years – it is expected that state governors will be pressured by their citizens to accept the terms.