The Supreme Court ruling poked a major hole in the Affordable Care Act by allowing states to opt out of expanding Medicaid to people below 133 percent of the Federal Poverty Level. As the law was originally written, states would have been offered a very strong incentive—100 percent federal funding initially of the costs of covering the new enrollees, gradually declining by 2020—to expand coverage to the poor and near-poor, and a very strong disincentive to opt-out—the potential loss of all federal dollars for their existing Medicaid programs. The Supreme Court ruled that the government can still offer the incentive of more federal funding to encourage states to go along, but it can’t punish states that don’t by cutting off existing Medicaid funds to them.
And, because of the way that law is written, the official "poor"—those who make the poverty level or less—are not eligible get the subsidies to buy health insurance available to people with higher incomes, because they were supposed to be brought under Medicaid. So if a state chooses not to go along with the Medicaid expansion, their poorest and most vulnerable residents might have no access to affordable coverage.
Well, it didn’t take long for a number of governors in Republican-controlled states to announce that they will not go along with the Medicaid expansion, and for many others (including a few Democratic governors) to indicate that they are thinking twice about it. The major justification offered is that they are concerned about the costs to the states—even though the federal government pays almost all of the cost (they either don’t trust that the money will be there, or argue that it really won’t cover their costs). Ideological opposition to "Obamacare" is another factor, of course. A desire to pressure Congress into converting Medicaid into a block grant program may be another.
How all of this will play out remains to be seen, and it certainly is possible that some of the states that are now saying that they will opt-out may be singing a different tune as we get closer to 2014, when the Medicaid expansion is supposed to go into effect.
But if some states don’t go along—especially some of the larger ones like Florida, whose governor, Rick Scott, has already given thumbs down to the Medicaid expansion—it will mean that the United States will have many millions more uninsured persons in 2014 (all of whom, by definition, will be the poorest of the poor). In explaining his position, Governor Scott said that "the most important thing is working on getting everybody a job," to increase the numbers of people with health insurance. But the fact is that having a job doesn’t guarantee health insurance. A new Gallup survey finds that only 55.9 percent of adults aged 26 to 64 received employer-provided health insurance in 2012, down from 61.6 percent in 2008.
And the fact is that most of the poor have a job. More than three-quarters of the uninsured are in working families: 61 percent are from families with one or more full-time workers and 16 percent are from families with part-time workers. But the poor (including the working poor) are more likely to be uninsured mainly because their employers don’t offer it, or they can’t afford the employee contribution, and they don’t qualify for the existing Medicaid program (most states don’t cover adults without children, no matter how little they earn), and they aren’t old enough to qualify for Medicare.
So it is a fiction that "getting everyone a job" (a good thing, of course!) will get everyone health insurance coverage, it won’t. It is a fiction that the poor don’t have health insurance because they don’t have a job, they do.
And it is a fiction that Medicaid doesn’t do any good for the people enrolled in it, it does. A new study found that new enrollees to Medicaid have marked improvements in reported health status and financial well-being than their counterparts that do not have access to Medicaid.
By the way, speaking of fiction, the independent fact-checking organization PolitiFact, winner of the Pulitzer Prize for journalism, said that Governor Scott "gave a misleading account of how much the Medicaid expansion would cost the state."
I understand that governors have a responsibility to think carefully about taking on new budget obligations, but they should at least get their facts right. The facts are that most of the poor work, but having a job doesn’t necessarily mean they can get health insurance they can afford. And the costs to the state(s) of enrolling all of their poor in Medicaid is much lower than being represented by some in explaining their decision to opt-out.
All of this means that the states will be the next big battleground in the fight to expand health insurance to (nearly) all Americans. But if the Governor Scotts of the world have their way, we will end up with the poorest of the poor having no access to health insurance coverage.
Today’s question: Do you think most states won’t go along with providing Medicaid coverage to the poor? And what will be the impact if they don’t?