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November/December 2012 St@teside

Medicaid Expansion Decisions Still Unclear in Many States

The Supreme Court’s decision in NFIB v. Sebelius did not change the underlying Medicaid expansion provisions of the Affordable Care Act (ACA), but did remove the ACA’s enforcement authority for states choosing not to expand. As the decision looms for many states on how they will approach the implementation of exchanges (see previous article), many states face great uncertainty in terms of whether they will pursue the Medicaid expansion. For many states, the availability of 100 percent federal match for this population from 2014 through 2016, along with a substantial federal match that decreases to 90 percent by 2019, is a strong incentive to expand Medicaid. Regardless, most states are taking a measured and analytical approach to determining the fiscal impact of this choice before making a final decision.
Currently, nine states have indicated that they will not expand the program, while 13 states and the District of Columbia have officially stated that they will move forward with the expansion. Many of the remaining states’ governors have indicated interest and/or concerns, but have not officially released a decision.
As with the majority of ACA-related implementation decisions that have to be made by states, political ramifications will continue to impact state approaches to the ACA, and the Medicaid expansion is no exception. This week, governors came to Washington, D.C. to meet with the administration to discuss issues of concern – particularly the costs related to the Medicaid expansion. Furthermore, with potential Medicaid cuts considered in the fiscal cliff negotiations, governors fear the impact potential cuts will have on their already stretched budgets.
Medicaid Expansion Tool: Financial Impact Analysis
The State Network recently released a worksheet and considerations table that can serve as a guide for states considering their own Medicaid expansion analysis.
Created by State Network experts at the State Health Access Data Assistance Center (SHADAC), the Center for Health Care Strategies (CHCS), and Manatt Health Solutions, this analytical tool is limited to financial considerations related to the state’s decision to expand and therefore excludes many important financial aspects related to the ACA as a whole (e.g., remaining mandatory provisions). State-specific Medicaid expansion analysis should take into account existing program structure, available data sources (both state and national) and realistic assumptions about enrollment and costs. States also should note within the analysis whether costs are directly related to the Medicaid expansion or if they are likely to occur despite an expansion (e.g., the "woodwork" or "welcome mat" effect of individuals currently eligible but not enrolled deciding to seek coverage).