The Supreme Court surprise: Medicaid ruling could reduce coverage

Buried in the Supreme Court’s 193-page decision on the health reform law was one big surprise: States can opt out of the law’s sweeping expansion of Medicaid, significantly reducing the number of Americans who gain insurance.

That ruling, experts say, could leave some of the poorest Americans in a “no-man’s land:” Not covered by the federal entitlement program but not eligible for the subsidized health insurance.

“Governors and state legislatures have a fundamental decision to make,” said Sue Sherry, deputy director of Community Catalyst, a Boston-based think tank. “They have to decide whether they’ll provide basic health care to their poorest residents.” In a lot of places, that expansion is pretty huge: In Texas, 1.8 million people would be expected to gain coverage under this provision. That number stands at 2 million in California and 950,000 in Florida.
What the Supreme Court said today was: States do not have to participate in that part of the law. If they want to leave their Medicaid program as is, there will not be a penalty. What was once a guaranteed insurance expansion is now left to the discretion of the states. http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/06/28/...
“Prior to the court’s decision today, failure to implement this expansion meant you lost all your Medicaid funding,” says Matt Salo, executive director of the National Association of Medicaid Directors. “Now, you have a political and financial decision to make: Do you do this?”
The Affordable Care Act provides financial incentives to entice states into the expansion. The federal government will, for the first three years, cover the entire cost of all these new patients. Usually states have to chip in for some of the cost.