Health Reform 2.0: Governors Pushing Back on Medicaid Expansion

Opt-out in Affordable Care Act could leave millions of low-income Americans still uninsured

By Karen Pallarito
HealthDay Reporter

Second part of two-part series

THURSDAY, Sept. 20 (HealthDay News) -- The Obama administration snatched victory in the battle over health reform when the U.S. Supreme Court upheld the president's controversial health law earlier this year.

But the fight is far from over.

One of the main goals of the Affordable Care Act is to extend health insurance coverage to most uninsured Americans -- an estimated 30 million people. It does that for many lower-income people by expanding eligibility for Medicaid, the federal-state public health program currently covering more than 60 million low-income Americans.

As of now, though, it appears that efforts to reduce the ranks of the uninsured will fall short of expectations. That's because a number of Republican governors are refusing to go along with the proposed expansion, and others are leaning in that direction.

"I look at the states as the next critical battleground," said Robert Doherty, the American College of Physicians' senior vice president for governmental affairs and public policy. If some states decline to extend Medicaid, the nation will end up with coverage like "Swiss cheese" with holes for "the poorest of the poor," he said.

In June, the Supreme Court, while upholding the legislation, essentially ruled that states could opt out of the law's Medicaid expansion without jeopardizing their existing Medicaid funding. In the wake of the ruling, Republican governors in Florida, Iowa, Kansas, Louisiana, Nebraska, South Carolina and Wisconsin indicated that they have no intention of expanding Medicaid, according to a July tally by The Hill's HealthWatch blog. Eight other governors, including one Democrat, are leaning against expanding their state Medicaid programs, and 22 states, including seven with Democratic governors, remain undecided, according to that report.

Medicaid eligibility rules vary widely from one state to another. In most states, low-income, non-disabled adults who aren't pregnant or don't have dependent children can't qualify for Medicaid coverage. Few states cover non-disabled parents at or above 100 percent of the federal poverty level -- currently $19,090 for a family of three.

The Affordable Care Act set out to close health insurance gaps by establishing a new minimum standard for Medicaid coverage. Effective January 2014, people under age 65 -- who aren't already Medicaid-eligible -- with incomes below 133 percent of the federal poverty level would be covered.

Based on 2012 guidelines, an individual making up to $15,415, or a family of four earning as much as $31,809, could meet that income threshold.

If every state participated in the expansion, 15.1 million adults who are not currently Medicaid-eligible could get coverage, according to the Urban Institute, a liberal-leaning think tank on social, economic and governance issues.

Allowing states to bow out of the expansion alters the equation.

Congressional Budget Office Says Fewer Will Be Insured