States Continue Medicaid Expansion Debate

As President Obama responds to healthcare.gov’s glitches, many statescontinue to debatewhether to expand the Medicaid program in their respective states.The Supreme Court’s decision on the Affordable Care Act (“ACA”)allows states to opt out of the ACA’s Medicaid expansion provisions. Many states have stated their Medicaid expansion plans definitively; however,not all states have spoken.

Participation in the Medicaid program is voluntary. All states currently choose to participate. States’ participation is conditioned on compliance with certain federal rules, including certain eligibility criteria. The Medicaid program currently offers federal funding toparticipating states to assist pregnant women, children, needy families, theblind, the elderly and the disabled in obtaining medical care. The ACA included a provision to further enhance these eligibility requirements by requiringparticipating states to cover nearly all non-disabled adults under age 65 with household incomes at or below 133% of the federal povertylimit (“FPL”) as of January 2014. However, as originallywritten and interpreted, if a state did not expand its eligibility criteria consistent with theACA, the state could have lost all of its federal Medicaid funding, not just funding allocated toward the expansion.

Florida, joined by 25 other states, initiated a lawsuit challenging the constitutionality of the ACA’s Medicaid expansion. Another lawsuit was initiated by the National Federation of Independent Business in Florida on the topic. These two cases were considered together by the Supreme Court of the United States (‘SCOTUS”) in National Federation of Independent Business v. Sebelius.

In its June 28, 2012opinion, theSCOTUSheld, among other things,that the ACA’s Medicaid expansion provision was unconstitutionally coercive. Thepractical effect of the SCOTUS’sopinion makes the ACA’s Medicaid expansion optional for states. This isbecause if states do not comply with the expansion, the Secretary of the U.S. Department of Health and Human Services may only withhold the ACA Medicaid expansion funds and may not withhold all or part of a non-compliant state’s federal funds for the rest of the Medicaid program.

As the end of the year begins to approach, the debate within each unspoken state of whether to expandits Medicaid programcontinues. By way of example, on October 21st, the Ohio Controlling Board voted 5-2 in favor of expanding its Medicaid program. This vote allows Ohio Governor John Kasichto expand the program by bypassing the republican-controlled legislature. A day later, a group of Ohio republican lawmakers and two anti-abortion groups based in Ohio filed a lawsuitchallenging the vote, however, alleging that the Ohio Controlling Board abused its discretion and exceeded its authority by effectuating such a major policy change that is contrary to the legislature’s expressed intent.

With the countdown until the new yearticking, expect additional states to start speaking.

For information specific to your state, the Kaiser Family Foundationtracker is a useful resource.