California Healthline Daily Edition

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HHS: Affordable Care Act Does Not Permit Partial Expansions of Medicaid

The Affordable Care Act does not allow for a partial expansion of Medicaid, according to guidance sent to governors on Monday by HHS, The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 12/10).

Under the Medicaid expansion, individuals with incomes of up to 138% of the federal poverty level will be allowed to enroll in the program in 2014. The federal government would fund the full cost of coverage for newly eligible recipients for three years and then a declining percentage until it reaches 90% in 2020 (California Healthline, 11/27).

About the Guidance

After the U.S. Supreme Court in June ruled that states can opt out of the Medicaid expansion without any effect on current funding, some governors began discussing the possibility of only partially expanding the program in their states. However, HHS said yesterday that it does not have the legal authority to allow states to do that (Adams, CQ HealthBeat, 12/10).

The agency wrote, "The law does not provide for a phased-in or partial expansion," adding, "As such we will not consider partial expansions for populations eligible for the 100% matching rate in 2014 through 2016." However, HHS will consider partial waiver requests beginning in 2017, when federal payments begin to decline ("Healthwatch," The Hill, 12/10). The guidance stated that states might be able to get a higher federal match for a partial expansion then (Aizenman, Washington Post, 12/10)

HHS officials also noted that states can apply to make smaller changes to their Medicaid programs but that the federal government would only match their spending, not pick up all of their costs, as it would under the expansion (Radnofsky, Wall Street Journal, 12/10).

The guidance also answered 39 commonly asked questions about the Medicaid expansion, as well as the creation of state-based health insurance exchanges (CQ HealthBeat, 12/10).

Reaction, Implications

Mike Schrimpf, communications director for the Republican Governors Association, said, "The answer is disappointing for many governors who hoped the administration was more serious about providing states flexibility" ("Healthwatch," The Hill, 12/10).

Louisiana Gov. Bobby Jindal (R), chair of the RGA, said HHS' guidance "is as disheartening as it is short-sighted," adding that while HHS' "answer will make a state's decision on Medicaid expansion more difficult, governors will continue to ask the president to pursue real Medicaid reform and we hope he will join us." Jindal was one of 11 Republican governors who last week sent a letter to President Obama requesting a meeting to discuss the effects of the ACA, particularly the requirements of the Medicaid expansion (CQ HealthBeat, 12/10).

HHS' decision could mean that the Obama administration does not expect many states to pass up the federal money, or that it is okay with just a few states initially participating in expansion, according to the Washington Post's "Wonkblog" (Kliff, "Wonkblog," Washington Post, 12/10).

According to Matt Salo, executive director of the National Association of Medicaid Directors, it is hard to predict how HHS' guidance will affect states' decisions on the expansion. "It pushes some of those states that were pushing for partial expansion to yes and some to no. ... It will be a mixed bag," he said (Washington Post, 12/10).

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