Now that most of the nation's anti-Obamacare GOP governors have ceded control of their state health exchanges to the feds, it only makes sense that the Obama Administration can't allow the states to piecemeal the ACA's Medicaid Expansion.

With the clock ticking toward January 2014, HHS will have to move fast to construct a plug-and-play healthcare exchange mechanism for at least 18 states (most led by Republican governors who oppose Obamacare) who are ceding a huge portion of their state insurance markets to federal control. (These governors, having run down the clock in hope of a judicial or electoral reversal of the ACA, have ended up making the meme of a federal takeover of healthcare true in their own states.)

So should we be surprised that the Obama Administration has issued a polite No. Regarding whether states can expand Medicaid eligibility to a lower threshold than 133 percent of the federal poverty level and still be funded by the feds. Realistically, the administration had no choice but to say no.

Here's why: The intent of the law was to provide access to health coverage to everyone (or nearly so). The first and most basic step was to simplify Medicaid eligibility, creating one simple income-based national standard rather than the existing 50-state hodgepodge. The threshold agreed on was that Medicaid should extend to all those earning below 133 percent of the federal poverty level, period. To ease the cost to states, the ACA funds those newly eligible Medicaid members 100 percent for the first three years, and 90 percent thereafter.

The exchanges are supposed to function as the clearinghouse for eligibility: both for Medicaid and for subsidized private coverage through the exchange. Any uninsured person will be able to answer a few basic questions and know whether he is covered by Medicaid, by a subsidized exchange plan, or can pick any qualified health plan and file for a tax break if they qualify. The idea was to provide a continuum: Medicaid coverage to the poorest, commercial coverage affordability to the working poor, and a transparent vehicle for finding coverage for everyone.

To make the exchanges work as intended, the Medicaid expansion has to offer a clear, easily determined definition of eligibility that does not shift depending on what state a person is in.

So now the states must decide to take it or leave it on the Medicaid expansion. In a non-political world, that decision would be a no-brainer: The ACA is the law of the land and isn't going away. Your citizens will pay the same federal taxes regardless. Expansion means states get millions of new federal dollars flowing into their health systems, near-universal health coverage, less cost-shifting of indigent healthcare costs, a healthier population, and a much-simplified eligibility process for their Medicaid programs. Three years in, the states will pay 10 percent of the cost of the expansion population. They can decide to drop out of the expansion at any time if they want.

But alas, it's a political world.

Indeed, some state governors have already rejected the Medicaid expansion outright, including Texas, South Carolina and Louisiana. Others are being pressured on both sides. Hospitals, insurers, pharma, employers and the uninsured have a huge stake in the outcome.

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