September 3, 2012: A key outcome of the US Supreme Court’s ruling on the Affordable Care Act (ACA) is that states can opt out of the Medicaid expansion without penalty. Prior to the Supreme Court decision, the ACA had required states to set a 2014 universal eligibility standard of 138 percent of the federal poverty level (about $32,000 for a family of four in 2012) regardless of age, marital status, pregnancy status or gender. To enforce this eligibility expansion, the ACA had given the US Department of Health and Human Services (HHS) the authority to withhold federal Medicaid matching payments for those states that did not comply. By taking away the ACA’s Medicaid expansion penalty provisions, the Supreme Court effectively made the Medicaid expansion optional to states.
A nationwide Medicaid expansion had been essential to the ACA’s goal of expanding access to health coverage, with the population that would have been newly Medicaid-eligible representing over half (17 million) of the estimated 30 million people to be newly insured under the ACA. However, if the 26 states that signed on to the ACA Supreme Court challenge choose not expand Medicaid, the Medicaid expansion will be cut in half, covering less than 9 million. This calculation is shown in the table below, which aligns the 26 opposition states with corresponding estimates of their newly-eligible populations under a Medicaid expansion to 138 percent FPL, using numbers from a recent Urban Institute report.[1] The table also calculates the total number of potential newly-eligibles in those 10 states, out of the 26 that challenged the ACA, that are moderately or highly likely to opt out of the Medicaid expansion.[2] Subtracting this more nuanced calculation from the full expansion estimate increases the estimated Medicaid expansion population from 8.4 million to almost 14 million—a better scenario from a coverage perspective, although certainly not altogether in line with the original coverage goals of the ACA.
[1] Kenney, G., Zuckerman, S., Dubay, L., Huntress, M., Haley, J., & Anderson, N. 2012 “Opting in to the Medicaid Expansion under the ACA: Who are the Uninsured Adults Who Could Gain Health Insurance Coverage?” Washington, D.C.: Urban Institute. Available at http://www.urban.org/UploadedPDF/412630-opting-in-medicaid.pdf.
[2] Advisory Board Company. 2012. “Where Each State Stands on ACA’s Medicaid Expansion: A Roundup of What Each States’ Leadership Has Said about Their Medicaid Plans.” Updated August 28, 2012. Available at http://www.advisory.com/Daily-Briefing/2012/07/05/Where-each-state-stands-of-the-Medicaid-expansion.