Because of a Supreme Court decision on Obama’s Affordable Care Act in June 2012, states can now opt out of “Medicaid expansion.”
Medicaid expansion would offer eligibility to Medicaid to those people who earn 138% of the federal poverty level (technically, only those under 133% of poverty level qualify, but 5% of income will be ignored, effectively making the new limit 138%). This means that in states that expand Medicaid, a family of four making $2,610 per month or less can get coverage from Medicaid. (In contrast, most states now limit Medicaid for adults to those who make under 50-100% of the federal poverty level.)
So far, about half the states have opted into Medicaid expansion. A handful are actively debating whether to join in, and about 20 states appear be opting out of Medicaid expansion. There is no deadline for states to approve a Medicaid expansion, so states that have not opted into Medicaid expansion may continue to debate it over the next year or so.
States That Have Approved Medicaid Expansion
As of late August 2013, most of the states in the North East and on the West Coast have agreed to opt into health care reform’s Medicaid expansion. In these states, the federal government will pay 100% of the states’ costs for covering these additional people for the first two years, and at least 90% of the costs after that.
Of the above states, all will operate their own insurance marketplace except for Arizona, Arkansas, Delaware, Iowa, Michigan, New Jersey, and West Virginia. Arizona and New Jersey plan to rely on the federal Health Care Marketplace, while Arkansas, Delaware, Illinois, Iowa, Michigan, and West Virginia plan to operate a marketplace in conjunction with the federal government.
States That Are Actively Debating Medicaid Expansion
In the following states, the legislatures are working toward legislation allowing expansion or debating it during a legislative session.
In New Hampshire, where Governor Hassan supports expansion, a special commission has made a recommendation to expand Medicaid, and the New Hampshire legislature will hold a special session starting November 7 to consider the matter.
In Pennsylvania, Governor Corbett is trying to expand Medicaid with a few changes to the federal requirements.
In Tennessee, Governor Haslam has offered up the idea of using the money the state would have to pay toward Medicaid expansion to instead help the people who would have been eligible for Medicaid under the expansion to obtain private insurance.
In Montana, Governor Bullock supports expansion and there are calls for a special session to consider legislation expanding Medicaid, so there is a possibility Medicaid may be expanded in Montana.
In Utah, Governor Herbert has announced a decision on Medicaid expansion won’t be made until sometime next year.
States That Won’t Opt Into Medicaid Expansion
Most of the American South and Mid-West have not voted to approve Medicaid expansion.
What happens in the states that don't allow Medicaid expansion? Many low-income adults who are under 65 and without children will go without health care. Some may qualify for a subsidy to buy inexpensive insurance through the federal Health Care Marketplace, but if they don’t, they won’t get hit with the penalty for not having insurance. (The individual mandate rules allow for those with very low income to avoid the penalty.)
Of all the following states that are not opting into Medicaid expansion, only Idaho is moving forward with plans to operate its own state-based health care marketplace to offer health care plans to consumers. Folks in the other states will need to use the federal Health Care Marketplace.
Based on Kaiser Family Foundation’s “Status of State Action on the Medicaid Expansion Decision, as of September 16, 2013.”