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Partial Medicaid Expansion Not Permitted Under ACA, HHS Announces

Partial Medicaid Expansion Not Permitted Under ACA, HHS Announces

December 11, 2012 — The Affordable Care Act (PL 111-148) does not allow for a partial expansion of Medicaid, according to guidance sent to governors on Monday by HHS, The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 12/10).

Under the Medicaid expansion, individuals with incomes of up to 138% of the federal poverty level will be eligible to enroll in the program beginning in 2014. The federal government would fund the full cost of coverage for newly eligible recipients for three years and then cover a declining percentage of the cost until it reaches 90% in 2020 (Women's Health Policy Report, 12/10).

The U.S. Supreme Court in June upheld the ACA on the basis that states can opt out of the Medicaid expansion without any effect on current funding, which led some governors to raise the possibility of only partially expanding the program in their states. However, HHS said on Monday that it does not have the legal authority to allow states to do that (Adams, CQ HealthBeat, 12/10).

HHS' Explanation

HHS wrote, "The law does not provide for a phased-in or partial expansion," adding, "As such we will not consider partial expansions for populations eligible for the 100 percent matching rate in 2014 through 2016."

However, HHS will consider partial waiver requests beginning in 2017, when federal payments begin to decline ("Healthwatch," The Hill, 12/10). The guidance stated that states then might be able to get the higher federal match for a partial expansion under an "innovation waiver" (Aizenman, Washington Post, 12/10).

HHS officials also noted that states can apply to make smaller changes to their Medicaid programs but that the federal government would only match their spending, not pick up all of their costs, as it would under the expansion (Radnofsky, Wall Street Journal, 12/10).

The guidance also answered 39 commonly asked questions about the Medicaid expansion and the creation of state-based health insurance exchanges (CQ HealthBeat, 12/10).

Reactions, Implications

Mike Schrimpf, communications director for the Republican Governors Association, said, "The answer is disappointing for many governors who hoped the administration was more serious about providing states flexibility" ("Healthwatch," The Hill, 12/10). HHS' decision could mean that the Obama administration does not expect many states will pass up the offer of federal money, or that it accepts that not every state will initially participate in the expansion, according to the Washington Post's "Wonkblog" (Kliff, "Wonkblog," Washington Post, 12/10).

According to Matthew Salo, executive director of the National Association of Medicaid Directors, it is hard to predict how HHS' guidance will affect states' decisions on the expansion. "It pushes some of those states that were pushing for partial expansion to yes and some to no. ... It will be a mixed bag," he said (Washington Post, 12/10).