The health-care law aims to expand Medicaid by raising the eligible income level in all states to a higher standard — opening the program to adults with incomes up to 138 percent of the federal poverty line, or $32,499 for a family of four.
But the Supreme Court ruled last year that Congress could not require states to participate.
Maine has taken the opportunity to scale back its Medicaid program. The state currently provides Medicaid to adults with children if they earn up to 138 percent of the poverty level, but it will reduce that to the poverty line next year. About 14,500 enrollees will be left without Medicaid coverage as a result.
Though the law’s expansion of Medicaid is now optional, there remains a strong incentive for states to go along with it. The federal government will pay the full cost of covering the newly eligible for the first three years, then phase down its share to 90 percent by 2020. By comparison, the current federal contribution to Medicaid ranges from half to three-quarters of the cost, depending on a state’s finances.
Indiana Gov. Mike Pence (R) wants his state to get the higher match by providing Medicaid to all adults with incomes up to 138 percent of the poverty line, but only if they are limited to a plan that includes a high deductible that the enrollee is partially responsible for.
The state’s Medicaid program currently offers a version of this arrangement to parents with incomes up to 200 percent of the poverty line and to a limited number of childless adults — about 44,000 people in total.
State officials argue that setup encourages more responsible behavior by enrollees: Because they have “skin in the game,” they are more likely to avoid unnecessary and costly treatment, such as going to the emergency room for routine care. The plan also rewards them for seeking preventive care.
However, Indiana had to get a special federal waiver to design the plan that way. The waiver expires Dec. 31, and unless the Obama administration grants a new one, all those covered through it will lose their insurance.
A similar showdown looms between the administration and Iowa Gov. Terry Branstad (R). As many as 70,000 adults — nearly all of them below the poverty line — have been covered through a version of Medicaid that required a waiver, and they are slated to lose their coverage in October.
In Oklahoma, nearly 30,000 adults stand to lose Medicaid coverage provided under a waiver that expires Dec. 31. In Utah, officials are seeking to renew a waiver that covers as many as 20,000 people each year and runs out June 30. (In Maine, officials aren’t even trying to renew a waiver that covers about 10,000 people and expires Dec. 31.)
Judith Solomon, a health policy analyst at the liberal-leaning Center on Budget and Policy Priorities, predicted that it will be much harder for states to make the case for such waivers in the wake of the health-care law.
The waivers are intended to allow states to run demonstration projects that test alternative methods for furthering the goals of the existing law. And with the health-care law offering a way to provide a much broader benefit than either Pence or Branstad is proposing, Solomon wonders how they can argue that their plans advance the law’s objectives.
“The administration will have to look at these waivers in a very different light than when they granted them in the past,” she said. “There’s a real question of whether this can be approved, and, meanwhile, the fate of tens of thousands of people hangs in the balance.”