Last year the Supreme Court ruled on tenets of the Affordable Care Act that withheld Federal funding from states that chose not to expand their Medicaid programs to include many of the nation’s current uninsured. The ruling denied the Feds ability to withhold existing Medicaid funding if the state did not adhere to the Act’s required expansion to include many not currently covered under most state Medicaid programs.
This overturned portion of the legislation is starting to create a nightmare scenario for actuaries that relied on specific demographic models to determine the overall cost of the nationwide plan. The initial carrot for states was front-end funding from the Feds that would immediately free some of the cost of the current Medicaid program, but would return the burden to the states after the first few years. The politics of the decision is a state-to-state analysis that centers on a couple of key issues. The initial funding by the Feds can be a lifesaver for states as they scramble to recover from other budget areas hard hit by the recession. The long-term implication is how do they structurally expand Medicaid albeit with Federal funds, and keep it solvent; knowing a portion of the cost will once again be borne by the state.
It is interesting to note that some modification of the Medicaid expansion has been recently accomplished by states such as Ohio and Florida. Looking at states that have already agreed to expand Medicaid versus those that have not is curiously similar to the 2012 electoral map. When comparing the maps side by side, there are interesting corollaries. It is almost a blue state red state scenario. The big question is whether the states not willing to expand Medicaid will change their minds in time to receive the full benefit of the Federal Medicaid carrot. Here are a couple links that show the current status for the Affordable Care Act and the 2012 Electoral College.
