Medicaid Directors Question CMS on Supreme Court Decision

The National Association of Medicaid Directors sent nearly 30 questions to the federal government last week on the health-care reform law's now optional Medicaid expansion.
by | July 9, 2012 AT 7:00 PM

The National Association of Medicaid Directors (NAMD), which represents Medicaid offices in all 50 states, sent 28 detailed questions in a letter to the Centers for Medicare and Medicaid Services (CMS) last week, seeking clarification on the implications of the U.S. Supreme Court's decision to essentially make the Medicaid expansion in the Affordable Care Act (ACA) voluntarily.

As NAMD's executive director Matt Salo said after the decision was announced: "The ruling, in effect, makes the ACA's Medicaid expansion optional for states." Chief Justice John Roberts stated that the Obama administration could not withhold existing Medicaid funding for states that did not adopt the ACA's new Medicaid eligiblity standards (133 percent of the federal poverty level, expected to add up to 17 million people to state rolls), as dictated in the law.

That removes the White House's ability to compel states to participate in the expansion, although there is still a substantial financial incentive (the federal government will provide more than 90 percent of the funding for newly eligible enrollees over the next decade).

Some states have already stated they will not voluntarily expand their Medicaid program. Texas Gov. Rick Perry made headlines Monday when he announced his state would not increase its eligibility threshold, citing budget concerns.

Salo noted after the Court's ruling that states would have to weigh the "political, fiscal and policy calculations of whether or not this expansion makes sense." Last week's letter to CMS seeks to give state officials more information as they have those conservations, Salo said.

NAMD asked the Obama administration to confirm that individuals between 100 percent and 133 percent of the poverty line would be able to access federal tax subsidies on state health insurance exchanges (thus giving them a private alternative to Medicaid). The letter inquired about how much flexibility states might expect from CMS as they decide whether to join the expansion.

It also asks about an alternative in which states increase eligibility to 100 percent of the poverty level (but short of the ACA's 133 percent threshold). The law provides for a 100 percent initial federal match for the newly eligible (and a permanent 90 percent match), but assumes an eligibility increase to 133 percent of the poverty level. NAMD asked: would states that stop short of the 133 percent line still be able to receive enhanced federal funding?

The Medicaid expansion aspect of the legal challenges to the ACA was generally ignored by commentators in favor of the debate over the individual mandate, and the Court decision to limit -- but not toss -- the expansion caught most observers by surprise. Salo acknowledged that NAMD had not planned for that outcome, making the clarifications sought in last week's letter necessary.

"The Medicaid expansion as an 'option' was a scenario that neither we, nor anybody else I would argue, anticipated," Salo told Governing. "Everyone knew that there was some small chance that the expansion itself would be thrown out as coercive, but our assumption was that it would invalidate the expansion, not make it optional."

The full NAMD letter is below.