medicaid expansion Medicaid – To Expand or Not

Medicaid – To Expand or Not?

Summary: Medicaid to expand or not? Is Medicaid expansion a good idea? Will it be well received? Is your state currently opting to expand? Will it provide the intended results?

Under the Patient Protection Affordable Care Act of 2010 (PPACA), one of the goals for healthcare is to make health insurance more accessible and affordable to more Americans. In 2012, there was a huge debate on the expansion of Medicaid. Originally, any state not electing to participate in Medicaid expansion would lose all of their preexisting Medicaid funding. As a compromise, states were given the option to either expand or not to expand Medicaid. But what does expansion really mean? Expansion refers to covering individuals and families who earn up to 138% of the poverty level. It expands to include able-bodied individuals who don’t have kids or disabilities but do not have the income to support health insurance coverage.

The governors of each state, while they don’t have sole responsibility to decide whether or not to expand Medicaid, they do directly oversee the programs for their state. There have been many heated debates over the expansion issue. There are a lot of things which need to be considered.

Those in favor

Those in favor of Medicaid expansion have cited the following arguments:

  • Federal funding will be provided to cover 100% of the expansion for the first 3 years and will begin to decrease down to 90% after that time period.
  • More covered Americans will decrease healthcare costs, giving the newly eligible the opportunity to visit a primary care physician instead of a costly emergency room visit
  • More covered Americans will help shift the focus from reactive to proactive, allowing more time and energy to be devoted to prevention.
  • Will provide access to healthcare coverage to millions of veterans who are currently earning between 100% and 138% of the poverty level. These individuals tend to have many chronic illnesses that need to be treated.
  • Insurance leads not only to better care but better quality of care
  • Helps build on Medicaid expansion projects that are already in the works or have recently been completed. It would replace local dollars with federal dollars.

Those opposed or on the fence

Those who are opposed to Medicaid expansion have voiced the following concerns:

  • He that giveth may taketh away. The federal government has “promised” generous amounts of funding to the states that opt to expand. MedicaidSkeptics and critics are not confident that the proposed federal funding will actually come to fruition or at least not to the original extent.
  • Affordability and the impact on the state budgets
  • The ACA could lure those that were previously eligible (but opted not to enroll) into Medicaid which would cost more for individual states.
  • Federal funding is expected at the level of 100% for the first three years and then will decrease. The states will have to pick up the difference. This figure is hard to predict as we don’t know exactly how many states are opting for expansion, although preliminary results indicate less than 50%. Additionally, of those states which do opt to expand, how many individuals will opt for coverage?
  • Those that are on the fence are asking for additional information on federal requirements, cost and enrollment projections, and policy alternatives.

One final thought on Medicaid expansion

The Medicare and Medicaid Disproportionate Share Hospital Program (DSH) actually links Medicare to Medicaid. Reimbursement is partially based upon the number of uninsured individuals in the state. Therefore, additional federal funding is at stake when considering whether a state should expand or not expand.

What are your thoughts?

What is your state doing? Do you agree? What is your stance on Medicaid expansion? Do you think we will have an influx of newly eligible individuals seeking medical treatment? Do you think it will cut down on emergency room visits? Do you think the majority of those who are newly eligible will opt to obtain coverage? Will they opt to continue not to be covered and take the penalty? What about those that are below the poverty level? There isn’t federal funding for this group.

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