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Medicaid in 2014: To Expand or Not To Expand?

The Affordable Care Act, which we’ve already talked quite a bit about, is controversial, and at times confusing. It’s the topic of much debate with its proponents and opponents.

 

Medicaid Expansion
Among the most controversial topics in the healthcare law is Medicaid Expansion in 2014. States have to decide whether or not they’re going to accept federal funding to expand the Medicaid program in their state, allowing healthcare access to about 17 million people who are currently uninsured.

It sounds like a no-brainer, but it’s actually very complex. In order for a state to receive federal funding (100% of the cost of enrolling a newly eligible state residents from 2014 to 2016), they have to fully expand their Medicaid program, not just partially expand, which is what a lot of governors were hoping for. Full expansion means a state needs to cover residents who make up to 138% of the federal poverty level.

What is Medicaid and How Does It Work?
Watch this Kaiser video to get a Medicaid overview.

Why Many States Are Hesitant
A state’s budget is made up of many expenses, healthcare being a big part of that. Many states have concerns that even though the federal government has committed to paying 100% of the cost for newly-enrolled residents from 2014-2016 (and 90% after 2016), the sheer cost over time may be too much for the federal government to bear. The result would mean states have to eat these costs after 2016. Currently, the state splits the costs with the federal government 50% / 50%.

There are 3 main reason states are hesitant to expand:

  1. They want incremental change, not sweeping change.
  2. They’re concerned that they will not have sufficient physician networks to see new Medicaid patients.
  3. They’re worried that federal funding will evaporate in 2-3 years due to federal debt.

A Patient’s Perspective: Why They Want the Expansion
Right now, most states base Medicaid eligibility on disability status and income level. Generally, you’re eligible for Medicaid if you make from 100-133% of the national poverty level. However, many Americans are stringing together 2 and 3 jobs to pay their bills, but still don’t qualify for Medicaid. The majority of uninsured are lower-income households with at least one adult working 40 hours a week.

Many times uninsured patients incur tens of thousands of dollars of medical debt that they never end up recovering from.

Expanding Medicaid would open up coverage to millions of uninsured Americans, resulting in a healthier population and workforce.

The question states are asking … does this outweigh the cost of expansion?

Which States Will Expand
As of right now, here’s where the states stand on expanding Medicaid:

  • 19 states (and the District of Columbia) will expand
  • 10 states will not expand
  • 11 states are undecided or have not yet commented on their expansion
  • 5 are leaning in the direction of expanding
  • 5 are leaning in the direction of NOT expanding

 

Where the States Stand

Via: The Advisory Board Company

 Note: This information is subject to change without notice.

Check Back for New Information
As new information becomes available, we’ll keep you updated, so be sure to check back often.

 

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