Negotiations are always a tricky process. One side gives a little, the other asks for more. The National Football League went through prickly labor negotiations last year before meeting in the middle, while the National Hockey League is in the midst of bitter labor talks now. Less well known are negotiations between the federal government and states whose outcomes will affect millions more Americans than the few well-paid athletes in professional sports.

The line in the sand between the federal government and states is expansion of Medicaid eligibility up to 133 percent of the federal poverty level. With the U.S. Supreme Court ruling establishing expansion as an option, some states are essentially asking for the full allowance from mom and dad, even without doing all the work (expanding eligibility only to 100 percent or so). It may be a long shot to ask, but states are trying, and the Centers for Medicare & Medicaid Services should make a decision soon.

Funding for partial expansion is one of the major unanswered questions for states. The answer will determine just how many uninsured will gain coverage through federal healthcare reform, and who picks up the tab?whether the feds pay 100 percent of expansion from 2014-2016 (and 90 percent thereafter), as outlined in the original law, or whether states pay for more if they come up with their own expansion plan. States are weighing a host of factors, including budget concerns, conservative governors wanting to one-up the Obama administration, and whether they run their own programs.

The feds have been using all the tools they can in the ?negotiation? process, consistently reminding states of that 100 percent federal match, along with the humanitarian aspect of providing better care for the needy. And, just for good measure, federal officials have been keen to point out that states are likely to see an influx of new Medicaid beneficiaries once the individual mandate and health insurance exchange portion of reform kicks off in 2014, so why not go ahead and expand and get that extra federal money?
 
Cindy Mann, director of the Center for Medicaid and Children's Health Insurance Program Services at CMS, said at a recent National Conference of State Legislatures meeting that CMS will allow states to expand Medicaid to 133 percent on their own timetable, not tied to January 2014, and then can scale back after the fact if they so choose.  In this regard, CMS is stressing the ?voluntary? aspect of the expansion?giving a measure of political cover to red-state governors who oppose federal mandates yet are considering expansion and the federal dollars attached. In the eyes of federal Medicaid officials, this is seen as the ?giving a little? part of the negotiation process.

However, some state officials have decided to press for more, seeing how far CMS is willing to budge on the issue, questioning whether the federal government would still pick up the tab if states expanded, but only up to a point. Appearances are that CMS will decline to go this route, taking an ?all-or-nothing? approach to expansion. Though CMS could surprise and agree to fund a partial expansion, it doesn?t seem likely?still leaving holdout states with a big decision to make.

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