Obamacare Medicaid: All or Nothing!!

On Monday, the Feds said, “NO!” to partial participation for states in the federal Medicaid plan. Now the states will need to decide to expand Medicaid per Obamacare (“go all in”) or not (“fold”).

For the past few months, we have heard governor-elect Pat McCrory state that he was interested, as were most Republican governors, in a partial participation in the  federal expansion of Medicaid.  Meaning, the states would expand Medicaid, but not quite as much as Obamacare requires. Well, this is no longer an option.

Monday, Secretary of Health and Human Services Kathleen Sebelius, authored a memo that stated “the law does not provide for a phased-in or partial expansion.”  Sebelius reiterated Obama’s claims that the federal government will handle 100% of the costs of covering new enrollees in 2014, 2015 and 2016, and at least 90% in subsequent years.  However, this claim of the federal government “picking up the tab” has been under intense scrutiny.  First, no one knows where the colossal amount of money will come from, although Obama has slashed the upcoming Medicare budget by over 716 billion. Secondly, states are terrified that, once 2017 comes, the states will not be able to afford the Medicaid bill.

For states that do not decide to accept federal dollars to expand, those states will continue to receive federal funding status quo, at least from 2014 through 2016.  Those states would receive their regular federal match rate — which varies from 50 percent to 78 percent, depending on the state.  After 2016, it appears that the states could apply for federal permission for a partial expansion.
There is no deadline for states to make a decision on expansion, unlike the related decision about whether to operate a state-based insurance exchange. But states that opt-in sooner, will be eligible for increased federal funding.  No doubt the decision  on expansion will rest largely with state legislatures as they try to set the 2014 budget.
As for the decision to run state-based insurance exchanges, that the blueprints are due to the federal government Friday if the state would like to run its own state-based exchange.  As of Monday, the feds have received  formal plans from 14 states and the District of Columbia to set up their own exchanges, and that they had reviewed and approved six of them: from: Colorado, Connecticut, Massachusetts, Maryland, Oregon and Washington state.  The administration will sign off on those plans on a rolling basis.  There is no deadline by which states must declare their intentions regarding the Medicaid expansion.

According to a Forbes blog, just more than a dozen states appear certain to take part in the expansion. In about 13 states, officials have been leaning heavily against it. In the remaining states, the decisions are uncertain.  The Forbes blog has NC as uncertain.  No shock there. McCrory has only stated that he wants to research the possible consequences of expansion before making a decision.  A statement, in my mind, that shows McCrory is inclined to make an educated decision, instead via party lines.  He may also have been waiting to see whether NC could have submitted a partial expansion, but now that is not an option.

The fundamental question NC state leaders have to ask is, “Do I believe that NC will continue to get 90 percent of the cost of the expansion from the federal government perpetually, given that the federal government has no money?”


About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on December 12, 2012, in Affordable Care Act, Medicaid, Medicaid Expansion, Medicaid Funds, North Carolina, Obamacare and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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