Medicaid has seen many changes since the Affordable Care Act first came into order in March 2010. Expansion of the Medicaid program is one of the most crucial parts of the extensive law, offering more Americans public health benefits than ever before. While each state can choose whether or not to expand Medicaid, at least half of states increased eligibility by the first year of implementation in 2014.
Like the individual and employer mandates, Medicaid expansion under health reform was mandatory or otherwise a penalty was issued, according to the first version of the ACA. It was then made optional after the Supreme Court case closed in June 2012. Fear that each state’s budget would suffer immensely made skepticism popular among GOP state officials regarding the expansion, causing them to opt out immediately.
Some of those states retracted their statement and ultimately decided to accept federal funds for expansion, giving low-income individuals and families hope in some of the nation’s most populous areas, like California and New York. Several states with mostly Republican governments made their own version of Medicaid expansion in order to insure more low-income residents. These proposals have been approved by the Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) in most cases, enabling people to purchase subsidized coverage within a certain income range.
If all states expanded, an estimated 6 million Americans would gain insurance. As more states decide to expand, it is likely that several million will get insured, though a few of the most densely populated states have opted out (Texas and Florida). The Supreme Court also made it acceptable for members to be cut from the program if it was a hardship for the state budget, and making it more difficult to be eligible in some cases. After this decision was reached, each state could decide whether to expand or contract Medicaid.
ACA Provisions for Medicaid Expansion
If a state chose to go forward with Medicaid expansion, several changes would be made. Effective January 1, 2014, all states that participate in Medicaid expansion are required to cover nearly all childless adults between age 19 and 64 with income up to 138 percent of the Federal Poverty Level (FPL), as long as you are an American citizen or legal resident. This is a considerable increase to the previous limit for most states, as many did not even offer Medicaid to low-income individuals without dependent children, and set the income guidelines extremely low for parents, as well.
The parent/caretaker relative group has also seen an increase in income guidelines under the health care law, also going up to 138 percent of FPL. Below is an example of a comparison posted on Washington State’s government site, showing Medicaid income criteria current to 2012 and what it would after January 2014 — including financial assistance for exchange plans where it says Premium Tax Subsidy Credit, which is not Medicaid, to clarify.
Federal funding is what sets the ACA’s Medicaid expansion apart from previous expansions. Between 2014 and 2016, the federal government intends to fund the entirety of the program’s expansion in each participating state. The federal support will taper off gradually, covering 90 percent of expansion costs in 2020 and going forward. States that do not choose to offer Medicaid to a larger number of individuals will not receive any federal funding.
Benefits of the Medicaid Expansion Provision
At first, some states jumped to generating statistics demonstrating a massive debt in the state budget if Medicaid was expanded, while others embraced the expansion and prepared to offer coverage to a larger group of people. States must naturally consider the budget, but with how many lives it could save (meaning less unhealthy, uninsured patients, thus being a money-saver) in mind, and how much it would cost the state once federal funding decreases. According to a Harvard study, a longer life expectancy is projected in states where Medicaid has already been expanded, as people with access to care are already healthier. This statistic works in the favor of expansion, and decreasing tax-supported medical costs.
Large states, such as Florida and Texas, whose governors were the first to emphasize their favor for opting out, plan to block millions of people from obtaining coverage. The difference in mortality rates (shown by the Harvard study) in Florida would result in about 5,680 less deaths per year for adults under age 65. A consultant’s report also stated that Iowa Medicaid will cover up to 182,000 more residents if every eligible resident took advantage of their expansion efforts.
Around the time states were deciding whether or not to expand, from 2012 to 2013, Medicaid cuts also began to take place around the nation, with 13 states deciding to reduce benefits, pay health care providers less or restrict eligibility. Most changes went into effect July 1, 2012, others became effective later that year and some were denied approval. The states participating in the cuts included some that also expanded coverage, strangely. Alabama, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Louisiana, Maine, Maryland, New Hampshire, South Dakota and Wisconsin all took measures to reduce the cost of their programs.
In summary, Medicaid expansion is a helpful tool for the low-income, uninsured population, and there are mixed reviews on whether it costs more or less for states to implement. As a law, it is beneficial for ensuring the parents and childless adults without coverage in our country have the right to affordable medical care.