When the Patient Protection and Affordable Care Act passed five years ago, on March 23, 2010, it dramatically changed the Medicaid landscape across the United States, just not in the way lawmakers intended. When President Barack Obama signed the ACA into law, it was heralded as, among other things, a law that would simplify an overcomplicated and bureaucratic program and standardize Medicaid eligibility across all states. And on that one particular day, that is what it did.
Rather than eligibility predicated on being a pregnant mom or disabled, for instance, the ACA expanded Medicaid to include all Americans with household income below 138 percent of the federal poverty level. Its goal was to extend healthcare coverage to millions of new members and transform Medicaid into a true healthcare safety net. States had no choice under the ACA as it was passed but to go along with the expansion, as they would be stripped of their existing Medicaid funding if noncompliant, a financial blow no state could endure. The federal government did sweeten the deal by agreeing to pick up 100 percent of the tab in 2014, 2016, before dropping down to 90 percent thereafter.
However, this plan ran into trouble in the halls of the Supreme Court in June 2012, when the Court ruled on the constitutionality of the law. In the single most disruptive decision for the ACA to date, the Court gave states the ability to continue with their Medicaid programs at minimum coverage levels while maintaining existing Medicaid funding. This allowed states to forgo the expansion, along with the significant extra federal funding. States continuing with their Medicaid expansion would receive the financial assistance.
In effect, the Supreme Court ruling took a plan to streamline Medicaid and turned it into a state-by-state toss-up. Since that time, 29 states plus the District of Columbia have expanded Medicaid, while 22 Republican-heavy states have not. This has resulted in millions of potential beneficiaries trapped in a sort of healthcare purgatory earning too much for Medicaid in non-expansion states, yet ineligible for federal subsidies on the exchanges. This unintended consequence of the ACA has been one of the driving narratives over the past five years, though not the only one.
Another result of the law, and the ensuing Supreme Court decision, has been the move by some states, such as Arkansas, Indiana, and Michigan to expand through waivers, allowing them to structure Medicaid more like private coverage while putting an emphasis on personal responsibility. Straight-up expansion did not fly in these states owing to their political makeup, with most Republicans still opposing the law. As a compromise, the waivers have allowed states to implement expansion and add new parts, be it a limitation on transportation benefits, new cost-sharing requirements, wellness incentives, or the use of dedicated health accounts, which function similarly to health savings accounts found in consumer-driven health plans.
This experimentation, not an intended consequence of the ACA but a byproduct of the Supreme Court ruling, has caught the eye of many of the remaining holdouts. Going forward, Republican-led states that expand will likely do so through waiver-based approaches, pushing the envelope with the federal government to get as many concessions as they can. In the meantime, millions are still left without coverage in these states as the expansion debate rages on. Certainly not what was intended or envisioned on March 23, 2010.
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