As states decide whether to join the Affordable Care Act’s Medicaid expansion, which the U.S. Supreme Court essentially made optional in its ruling last week, their choice will ultimately determine whether millions of people gain health insurance through the state-federal program in 2014. According to new estimates from the Urban Institute’s Health Policy Center, nearly half of all uninsured Americans could qualify for Medicaid if the expansion is implemented as dictated under the law.
About 22.3 million people without insurance currently fall below 138 percent of the federal poverty level, the new Medicaid eligibility threshold under the ACA, making up more than 47 percent of the 47.3 million uninsured Americans. But as each state analyses the pros and cons of adopting the new eligibility standards in exchange for a 100 percent federal match to initially cover the newly eligible (and a permanent 90 percent match), they will be operating under vastly different scenarios.
In Alabama, Kentucky, South Dakota and West Virginia, more than 60 percent of their uninsured would qualify for Medicaid under the ACA. California, Florida and Texas would add upwards of 2 million enrollees each. That could lead to substantial political and fiscal pressure (from, for example, hospitals that are otherwise treating those people without compensation) to adopt the new standards.
On the other end of the spectrum, less than 40 percent of the uninsured in Maryland, New Jersey and Vermont would be eligible for Medicaid. Wyoming and North Dakota would enroll less than 35,000 additional people to comply. That could either make it easier for those states to adopt the new eligibility rules -- or lighten the political pressure to do so.
Unsurprisingly, initial reactions to the Supreme Court’s ruling that the federal government could not withhold existing federal Medicaid funding for states that didn’t apply the new eligibility rules (which limits the Obama administration’s ability to enforce the provision) were ideologically drawn. Republican officials in states such as Mississippi, Texas and Wisconsin praised the Court’s decision to limit the expansion and gave no indication that they would participate in the Medicaid increase voluntarily.
“Although I am continuing to review the ruling by the Supreme Court, I would resist any expansion of Medicaid that could result in significant tax increases or dramatic cuts to education, public safety and job creation,” Mississippi Gov. Phil Bryant, whose state would experience one of the largest influxes in enrollees by percentage, said in a statement.
Policy analysts, though, speculated that most states would find it difficult to resist a windfall of federal money to add to their Medicaid rolls. The Kaiser Family Foundation estimated in 2010 that the federal government would spend $443.5 billion to implement the expansion through 2019, while states would spend a combined $21 billion.
Again, though, there was wide disparity across states: California, Florida, Illinois, North Carolina and Texas would spend between $1 billion and $3 billion in additional state dollars between 2014 and 2019 under the new standards. Other states (Hawaii, Maine, Massachusetts and Vermont) would actually save millions as the federal government took over spending that they had previously been responsible for.
"For many states, it's going to be very difficult for them to leave that money on the table," Linda Blumberg, a health economist and senior fellow at the Urban Institute, told Governing last week. "I think there is going to be considerable financial pressure, both from providers and the reality of state budgets, to go with this."
With the Court’s ruling less than a week old, however, the political and financial calculations are just beginning.
The map below details each state's uninsured population that could be eligible for Medicaid and each state's expected spending for the ACA's Medicaid expansion. Darker states have higher percentages of uninsured residents who are potentially Medicaid eligible. Click a state for additional information.
Zoom out to view Alaska and Hawaii data.
SOURCE: Medicaid eligibility estimates obtained from Urban Institute analysis of American Community Survey and Integrated Public Use Microdata Series data. State spending figures obtained from Medicaid Coverage and Spending in Health Reform: National and State‐by‐State Results for Adults at or Below 133% FPL, published May 2010 by the Kaiser Family Foundation.