California Healthline: More States Are Exploring Alternative Medicaid Expansion Plans. What Does That Mean for Health Reform?

by Michelle Stuckey

Pennsylvania’s now in. Indiana might be next. Is the tide turning on Medicaid expansion? Recent moves by previously entrenched states indicate that might be the case. However, what does it mean for Medicaid nationwide when more states are choosing alternative plans?

The Affordable Care Act calls for Medicaid to be expanded to cover residents with annual incomes up to 138% of the federal poverty level and eliminates categorical eligibility. However, a Supreme Court ruling in 2012 made it optional for states to participate in the expansion. Some states that have been hesitant to increase program eligibility under the law now are looking at alternative ways to expand health coverage to low-income residents.

A recent report that focused on health care reform in the South notes that “Medicaid expansion remains on the table for many” hold-out states there. “Some of those in opposition are moderating their views by considering the private option as a third way in what once was seen as a dichotomous choice,” according to the report, which was issued by the Nelson A. Rockefeller Institute of Government in conjunction with the Brookings Institution and the University of Pennsylvania’s Fels Institute of Government.

Meanwhile, recent research has shown reductions in health care spending and uninsured rates in states that opened the program to more residents. For instance, a Gallup poll found states that have fully embraced the Affordable Care Act — by expanding Medicaid and setting up their own health insurance exchanges — have seen the fastest drops in the uninsured. As of this year’s first quarter, there was a 4.3 percentage-point gap in uninsured rates between states that expanded the program and those that did not.

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