States Still Struggling With Medicaid Expansion

By Randy Dotinga
WebMD Health News

Reviewed by Lisa Zamosky

July 26, 2013 -- As the clock ticks closer to Jan. 1, 2014 -- D-Day for health care reform -- several states are still figuring out whether they'll expand Medicaid eligibility to more poor people. Medicaid is the government's insurance program for people with low incomes.

Some states are tangled up in political debates over issues like financing and dependency on the government. Others have thrown the issue to committees that will make recommendations. And some states have looked at bending the rules to do things their own way.

To complicate things, there's no deadline for states to decide whether to expand Medicaid, although Americans will have to make decisions about their own coverage by Jan. 1. That's when the Affordable Care Act goes into effect, requiring most Americans to have health insurance or pay a fine.

Some poor people will become eligible for Medicaid for the first time on Jan. 1 or earlier because their states approved expansion. But other states have turned down expansion, which covers adults under age 65 who aren't pregnant, aren't already eligible, and have incomes less than 138% of the federal poverty level -- that's $31,322 for a family of four in 2013 in 48 states and Washington, D.C; Alaska and Hawaii have their own poverty levels.

Heated Debate

The debate over expansion, which has been intense in some states, is "primarily about three things: economics, ideology, and politics," says Benjamin Sommers, MD, PhD. He is an assistant professor of health policy and economics at Harvard School of Public Health. "First, there are legitimate concerns in some states about how and whether they will be able to afford their share of the costs of the Medicaid expansion. While the expansion is very generously funded with federal dollars -- 100% for the first 3 years, 90% in the long-run -- some states may struggle to afford even that small share."

Second, Sommers says, there's a "debate about the role of government in general, and the federal government in particular." And finally, he says, there's the political reality that health care reform "is deeply politically unpopular in some parts of the country."

Earlier this month, the Kaiser Family Foundation reported that 23 states and the District of Columbia had agreed to expand Medicaid, and six were uncertain. Twenty-one weren't accepting expansion, at least at the moment. Because of differences in legislative calendars and procedures, though, the numbers are not that easy to pin down.

New Hampshire and South Dakota have thrown the issue to committees. Utah is looking at a system proposed in Arkansas that would allow poor people to buy private insurance with Medicaid dollars. In Arizona, where expansion was pushed through recently, a move is afoot to repeal it.

In Indiana, the governor wants to boost spending on insurance for children instead of expanding Medicaid. Legislative debates over Medicaid continue in Virginia, Michigan, and Tennessee. Expansion died earlier this month in Pennsylvania.

In West Virginia, the governor is worried that red tape will prevent the state from offering expanded Medicaid in time for Jan. 1.

There's no actual deadline for states to decide whether to expand eligibility, says Emma Sandoe, a spokeswoman for the U.S. Department of Health and Human Services. She said they could make a decision at any time and could expand Medicaid in 2014 if they wish.

States will be able to start Medicaid quickly after deciding to allow expansion, says Timothy Jost, a professor of law at Washington and Lee University. "The biggest delay will be if states try to get waivers to customize their programs, which many will likely do," he says.

Options are limited for many poor people in states that don't expand Medicaid, Sommers says. Those who are below the poverty level won't be eligible for tax credits, he says, and "this means most people below the poverty level in non-expanding states will still be uninsured, even as their wealthier neighbors qualify for tax credits to buy coverage."

In late June, the Department of Health and Human Services ruled that people who would have qualified under Medicaid expansion would be exempt from the requirement to have insurance if their state decides against Medicaid expansion.

SOURCES: Emma Sandoe, spokeswoman, U.S. Department of Health and Human Services. Benjamin Sommers, MD, PhD, assistant professor of health policy and economics, Harvard School of Public Health. Timothy Jost, professor of law, Washington and Lee University, Lexington, Va. Medicaid.gov: "California Medicaid Statistics," "The Affordable Care Act Becomes Law." Families USA: "2013 Federal Poverty Guidelines." Kaiser Family Foundation: "Status of State Action on the Medicaid Expansion Decision, as of July 1, 2013." The Boston Globe: "N.H. Republicans Blocking Medicaid Expansion." AARP South Dakota: "SD Medicaid Expansion Task Force Meeting." KUER: "Utah Considers Arkansas' 'Private Option' for Medicaid Expansion." Newsmax: "Ariz. GOP Split Over Brewer's Medicaid Expansion." South Bend Tribune: "What About Expanding Medicaid in Indiana?" Watchdog.org Virginia Bureau: "Medicaid Expansion: Hospitals Gain, VA Taxpayers Could Feel the Pain." MLive: "Michigan Medicaid Expansion." WBIR: "TN, KY Are Miles Apart on Medicaid." CBS Pittsburgh: "Pennsylvania Medicaid Expansion Shelved." Charleston Daily Mail: "Delays Threaten W.Va. Medicaid Expansion." Centers for Medicare & Medicaid Services: "Details for Title: HHS Final Rule and Treasury Notices on Individual Shared Responsibility Provision Exemptions, Minimum Essential Coverage, and Related Topics."

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