Fallout From the Supreme Court's Medicaid Decision

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By Mary Duenwald

The collateral damage from the U.S. Supreme Court's Obamacare decision last June, which let states opt out of the law's Medicaid expansion, is coming into clearer focus. A study from the Harvard School of Public Health published Wednesday afternoon has found that so far fewer than half of states have decided to go along with the expansion.

Thirteen governors have declared their steadfast opposition. Sixteen remain undecided.

With the expansion, Medicaid was supposed to cover everyone up to 138 percent of the federal poverty level. With many states not participating, 6 million fewer people will be covered by Medicaid, according to the Congressional Budget Office. About 3 million of those left out  -- people between 100 percent and 138 percent of the poverty level -- can still receive tax credits to buy health insurance on state exchanges. But the poorest half of the group, the 3 million living below the poverty level, will be left with no means of acquiring insurance.

Sadly, this is a decision that the Court left firmly with the states.

According to the Harvard study authors, Benjamin Sommers and Arnold Epstein, almost all the recalcitrant governors say they are worried that the expansion will ultimately cost too much -- even though the federal government is to pay 100 percent of the cost for the first three years and only gradually cut back to 90 percent.

Some governors shamelessly admit they are worried about the expansion's "woodwork effect" -- that it would draw out people who are already eligible for Medicaid but not yet enrolled, raising state costs.

It's still not too late for governors to opt in; there is no legal deadline. But there are practical reasons why it isn't possible to wait much longer, as Sommers explained by phone. The state exchanges, scheduled to go into operation a year from now, are the places where the newly eligible are to sign up for Medicaid. And it won't be easy to build in a mechanism for this enrollment at the last minute.

This week, Arizona Governor Jan Brewer announced her desire to go along with the expansion. This is a particularly bright ray of hope, and not only because Brewer is a Republican. Arizona was the state that took longest to join Medicaid to begin with -- not until 1982, 17 years after the program was created.

It would be nice to think that other governors in Brewer's party are paying attention.

(Mary Duenwald is a member of the Bloomberg View editorial board.)

-0- Jan/17/2013 13:51 GMT