In the Supreme Court’s recent decision upholding the Affordable Care Act, also known as Obamacare, an important question before the Court was whether it was coercive for the federal government to threaten to withhold current federal funding for Medicaid, the joint federal-state health insurance program for the poor, if states did not expand the program in compliance with a new requirement in the health reform law. The Court ruled that yes, it is coercive to do so.
Below are the six key things you need to know about the Court’s decision and how it will affect women, the working poor, and state and federal governments.
The federal government keeps its carrot but loses its stick
The Supreme Court said that it is up to states to decide whether they will join the Medicaid expansion established under the Affordable Care Act. That means states must have the ability to take or leave the new funds offered under the Medicaid expansion. If they take the new funds, then they must comply with the new rules of the program, which means extending eligibility to anyone who meets certain income requirements.
But if they choose not to participate in the expansion, the federal government cannot penalize them by taking away the Medicaid funds they already receive. This means that governors have full discretion to decide whether their states will participate in the expansion. Already seven states have denied Medicaid coverage to millions of citizens who became eligible under the Obamacare expansion.
The working poor will suffer if states do not participate in the Medicaid expansion
Under the old Medicaid rules, only certain categories of poor people such as pregnant women, parents with dependent children, the disabled, and the elderly could qualify for Medicaid. But under the Medicaid expansion, anyone can qualify for Medicaid as long as their annual income is less than 138 percent of the federal poverty level. In addition, the Affordable Care Act offers tax credits that help people with incomes between 100 percent and 400 percent of the federal poverty level ($11,170 to $43,320 for an individual) purchase private health insurance.
Two groups of people will be left out if a state chooses not to expand its Medicaid program: 1) those who make less than 100 percent of the federal poverty level but do not fit into one of the traditional Medicaid categories, including people who are single, childless, or do not
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