HHS to Exempt Low-Income from Mandate in States That Opt Out of Medicaid Expansion

In a letter sent to all 50 governors Tuesday, Health and Human Services (HHS) Secretary Kathleen Sebelius said that her department would exempt low-income individuals in states that choose not to expand their Medicaid program under the Affordable Care Act (ACA) from the law's individual mandate.
by | July 11, 2012

In a letter sent to all 50 governors Tuesday, Health and Human Services (HHS) Secretary Kathleen Sebelius said that her department would exempt low-income individuals in states that choose not to expand their Medicaid program under the Affordable Care Act (ACA) from the law's individual mandate.

The U.S. Supreme Court ruled that the Obama administration could not withhold existing federal Medicaid funding from states that decline to expand their eligibility to the law's new threshold: 133 percent of the federal poverty level. That effectively makes the Medicaid expansion optional, and some GOP governors have already stated that they will not voluntarily expand the program.

The Medicaid expansion is a key part of the ACA's goal of universal coverage: more than half of the 30 million people expected to gain coverage would do so through the low-income insurance program.

The law's controversial individual mandate also requires every American to have health insurance -- and many low-income people were expected to satisfy the mandate through Medicaid. In Tuesday's letter, Sebelius noted that the law gave HHS some latitude in exempting individuals from the mandate if obtaining insurance would be a financial hardship. She indicated the department would exercise that authority in states that opt out of the Medicaid expansion.

Sebelius also announced a series of four workshops this summer (to be held in Washington, D.C., Chicago, Denver and Atlanta) for state leaders to meet with HHS officials and discuss how they will implement the law, from the Medicaid expansion to the establishment of health insurance exchanges, now that it has been upheld by the Supreme Court.

The full HHS letter is below.

 

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