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The Affordable Healthcare Act (ACA) expands Medicaid to all persons under age 65 with individual incomes of about $14,500 or less. Rejecting this ACA expansion would cost Texas about $52.5 billion in federal funds and leave 1.4 million low-income Texans without any health care coverage. Is rejecting this medical coverage wise? The question is complicated and it demands thoughtful consideration.

What is Medicaid and how did the ACA Expand It?

Medicaid is a 1965 federal act designed to provide minimal health coverage to America’s most needy. Unlike Medicare, a health coverage program for those over 65, the federal government does not fully fund Medicaid. Instead, Medicaid requires the states to share the cost of the program. Each state manages its own Medicaid program under federal supervision.

The original Medicaid left it to each state to decide whether or not to participate in the program. By 1982, all states accepted Medicaid.

Because the states manage their own Medicaid programs, these programs vary a good bit. The eligibility requirements differ. The covered health care services are not the same in each state. The amount of money healthcare providers are reimbursed for covered services is not the same in each state. But Medicaid uniformly reimburses health care providers significantly less for the same service than would Medicare or private insurers.

Beginning January 1, 2014, the ACA expands Medicaid to include everybody under Medicare age who earns no more than 133% of the federal poverty level—about $14,500 for an individual.

How is the ACA Medicaid expansion funded?

Unlike traditional Medicaid, the federal government will pay 100% of the cost of the expansion for three years. After 2017 participating states share the cost, but through 2020 no state will contribute more than more than 10% of the cost of the ACA Medicaid expansion.

Each state is free to reject the ACA expansion.

As passed by Congress a state could reject ACA Medicaid expansion, but risked losing all of its federal Medicaid funds. A month ago, the United States Supreme Court ruled that the threat of losing full Medicaid benefits was unconstitutionally coercive. As a result, each state is now free to reject Medicaid expansion without fear of losing federal funding for its current Medicaid program.

Are states accepting or rejecting the ACA Medicaid expansion?

Most States have not decided whether to accept or reject the Medicaid expansion. But seven States are formally preparing to accept: California, Illinois, Maryland, Massachusetts, Minnesota, Vermont and Washington.

In contrast, elected leaders of five states are adamant that their states will reject it: Florida, Louisiana, Mississippi, South Carolina, and Texas.

If Texas rejects the expansion, 1.4 million low-income Texans will lose this offered coverage, and Texas will forfeit about $52.5 billion in federal ACA Medicaid expansion funds.

What factors drive the decision to accept or reject Medicaid expansion?

A national election is less than 100 days away. This alone explains why most states remain formally undecided. Many would-be elected officials are grounding their election bids on a promise to “trash” the whole ACA.

Attempting to turn a deaf ear to overblown electioneering, my next few posts will isolate factors that seem critical to both a reasoned evaluation of the ACA as a whole and a state’s decision to accept or reject the Medicaid expansion.

 © Jack Edward Urquhart