While the Supreme Court’s decision to uphold the Patient Protection and Affordable Care Act came as a surprise to many, its ruling did contain a significant change for how the law will impact Medicaid. Under the terms of the health care law’s Medicaid expansion provisions, states would have had to either implement the proposed expansion or face the loss of federally provided Medicaid funds. However, the Supreme Court declared this punishment scheme unconstitutional, and many who may have been covered under the proposed expansion may lose out on Medicaid health care insurance.
The healthcare law contains a significant expansion of the Medicaid program. Medicaid is paid for by both states and the federal government, though each individual state is responsible for administering its own Medicaid system. Under the healthcare law, all states would’ve had to provide Medicaid to any individual or family that made less than 133% of the federal poverty limit. This meant that about 16,000,000 more people would’ve had health care insurance through Medicaid if the expansion took place as planned in 2014.
The Supreme Court ruling declared that the punishment of taking away federal dollars if the state failed to comply with the expansion was unconstitutional. Currently, federal dollars account for about 10% of state Medicaid costs, so removing them is a significant penalty. The Supreme Court stated that the federal government cannot do this. While it can provide incentives to join, it cannot punish a state which chooses not to join.
For those who may have been eligible for Medicaid under the expansion, they’ll have to wait to see if their state chooses to adopt the expanded criteria.