The Supreme Court's Decision On Medicaid Expansion - Leave The Carrot, Take Away The Stick…

Although the Supreme Court upheld the Affordable Care Act (ACA), it did limit one portion of the law – the Medicaid expansion. In the ACA, Congress expanded Medicaid to nearly all people under the age of 65 whose household income is at or below 133% of poverty. Currently, the Medicaid program, funded jointly by the states and the federal government, primarily covers pregnant woman, needy families, and the disabled. Each state operates its own Medicaid program within federal guidelines. Because the federal guidelines are broad, states have a great deal of flexibility in designing and administering their programs. Under the law if a state refused to comply with the new coverage requirements, it may lose funding for not only the expansion population but all of its Medicaid federal funds.

The Court ruled that the expansion can stand and that the provision is constitutional as long as states would only lose new funds if they didn't comply with the new requirements, rather than all of their funding. In real world terms, that means that states may now choose whether or not to participate in the expansion without risk of losing other Medicaid funding.

...Does the Decision Create a New "Donut-Hole" Population

What is not known is how many states will choose to participate in the expansion. If a state does not participate in the expansion where does that leave the population of people that are not covered under a state's existing Medicaid program who would have been covered under expansion. The law's provision of subsidies to purchase health insurance on the health insurance exchanges doesn't kick in until 133% of the federal poverty level. This means...

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