One of the most important outcomes of the decision of the century by the Supreme Court affirming the Affordable Care Act is the Medicaid piece of the puzzle. The Obama healthcare reform law expands Medicaid to 133% of the Federal Poverty Level (FPL) beginning in 2014. The intent was to provide access to health care coverage to lower-income American’s.
The hitch is the Supreme Court said states can now opt out of the Medicaid expansion. The large entitlement program is federally funded and administered at the state level under a federal state partnership. Now that states can deny the expansion we will see numerous things play out in the next few months.
First, conservative states with Republican governors will likely not go ahead with the expansion. Their argument is simple. With the rising cost of healthcare and balanced budget amendments the program is quickly becoming the biggest expenditure to their bottom line. They cannot afford to keep the program sustainable without cuts to higher education or raising taxes.
Second, liberal states with Democrat governors will expand and some have done so already. Others have tried to capitalize on federal waivers to expand the program further. Could other states follow suit? That remains to be seen.
Regardless of what happens, here are a few reasons why Medicaid matters to every American. Always remember if you are a working American that funding for these programs comes from your paycheck. Here is what you know to be an informed consumer.
First, Medicaid is a growing entitlement program and is very expensive. Like Medicare it contributes a large segment our a growing debt here in the United States. We are facing a fiscal cliff because of runaway entitlement spending and leaders in Washington must act before the economy tanks.
Second, Medicaid provides a critical safety net program to many older Americans and a significant amount of its spending goes to long-term care. Actually the bulk of the program goes to paying for long-term care. If you ever have had an older relative in a nursing home you will understand. America’s Healthcare Challenge explored this issue in episode nine.
Finally, Medicaid expansion being over-turned will have an impact on employers with low-income workers. If these workers are not insured and now cannot receive coverage in Medicaid, this means they will qualify for a subsidy in a health insurance exchange. This is more expensive for taxpayers collectively and could mean potential fines for businesses with more than 50 employees.