Feds Get Tough On States Rejecting Obamacare Provision

December 11, 2012 1:16 pm

obama-health-care States must expand Medicaid all the way if they want to receive full Obamacare funding, federal officials said this week.

The health care reform law enacted in 2010 calls for Medicaid to be offered to anyone who earns up to 133 percent of the federal poverty level, which is $14,856 this year. Under the law, the federal government would pay the full cost of enrolling newly eligible people from 2014 to 2016, after which the share would gradually shrink until it reached 90 percent starting in 2022.

States have been slow to embrace this aspect of Obamacare, despite the unprecedented level of federal financing for Medicaid. Texas, South Dakota, and seven other states have said they won’t expand Medicaid. Officials in Indiana, New Mexico, Wisconsin and other states questioned whether they could offer benefits to fewer people by extending eligibility to some level of income below 133 percent of poverty.

After months of waiting for an answer about partially expanding Medicaid under health care reform, states received a simple reply from the Obama administration Monday: no. States that partially expand will not receive the enhanced funding that would come with a full expansion.

“The law contemplated that every American would have a way to get health insurance coverage, and Medicaid expansion to 133 percent of poverty to low-income adults was the method identified in the law,” Cindy Mann, the director of the Center for Medicaid and Children’s Health Insurance Program Services, said during a conference call with reporters.

“Some states have asked whether they could get the 100 percent federal match and expand Medicaid coverage to less than the 133 percent of poverty level specified in the law,” Mann said. That amount is “a rate that Congress reserved for the full expansion, and so we are going to remain true to that intent of Congress,” she said. There is no deadline for states to decide on the Medicaid expansion, and they can join at any time, she said.

Health and Human Services Secretary Kathleen Sebelius wrote a letter to governors Monday about the Medicaid expansion and other aspects of the health care law and included a question-and-answer document touching on details.