The new law expands Medicaid to a national floor of 133% of poverty ($14,404 for an individual or about $29,326 for a family of four in 2009) to help reduce state-by-state variation in eligibility for Medicaid and also include non-Medicare eligible adults under age 65 without dependent children who are currently not eligible for the program. Children currently covered by CHIP between 100% and 133% of poverty would be transitioned to Medicaid coverage.Under the supreme court decision, it appears, individual states can refuse to accept the Medicaid expansion.
These changes help to provide the base of seamless and affordable coverage nationwide through Medicaid for those with incomes up to 133% of poverty and then subsidies for coverage for individuals with incomes between 133% and 400% of poverty through state-based Health Benefit Exchanges. Individuals eligible for Medicaid would not be
eligible for subsidies in the state exchange. For most Medicaid enrollees, income would be based on modified adjusted gross income without an assets test or resource test.
We'll need to see some analysis of the consequences of this decision, and which states may decide to snub their noses at the Medicaid expansion.
Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.That means that states that refuse to accept the federal government's expansion of Medicaid can't be penalised by the government – the status quo remains.
That's actually a tricky decision, and it can be read as a defeat for the Obama administration. It puts the ball back in the court of the states that – for whatever reason – want to reject the Medicaid expansion, which is a key part of the reform's attempt to expand healthcare coverage.
This blows a hole inside the Affordable Care Act. Hold off popping those champagne corks.
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