HHS: No Partial Medicaid Expansion Under the Affordable Care Act

Answering a popular question from the states, U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius told governors in a letter Monday that her department would not support a partial Medicaid expansion under the Affordable Care Act (ACA).
by , | December 11, 2012

Answering a popular question from the states, U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius told governors in a letter Monday that her department would not support a partial Medicaid expansion under the Affordable Care Act (ACA).

Since the Supreme Court ruled in June that the Medicaid expansion had to be optional for states, governors have peppered HHS with questions about how that decision changed the expansion. One of the most popular questions was whether states could partially adopt the Medicaid expansion -- up to, say, 100 percent of the federal poverty level instead of the full 138 percent as prescribed under the health reform law.

Sebelius's answer Monday was unequivocable: No.

In a blog post on an HHS website, the secretary said that the ACA "does not create an option... for a partial and phased-in expansion." According to numerous reports, Cindy Mann, deputy director of the HHS Centers for Medicare and Medicaid Services (CMS), told reporters in a conference call that HHS did not have the legal authority to offer a partial expansion. That was the opinion expressed by various policy analysts before the Obama administration issued its answer.

Sebelius reiterated that the federal government will cover 100 percent of the costs for the expansion through 2016 and never less than 90 percent after that -- a deal that several studies have concluded would actually save some states money.

Some speculated that HHS might find a loophole to offer a partial expansion in an effort to entice more states to participate in the expansion. Presumably, an expansion to 100 percent (instead of 138 percent) of the federal poverty level would be less expensive for states starting in 2017 when states have to start contributing a small share of the funding. And the ACA allows for federal tax subsidies for people with income greater than 100 percent of the poverty level, which would ensure those impacted by a partial expansion would still get health coverage.

But Monday's letter eliminated that possibility.

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