The 2010 law called for states, starting in 2014, to open their Medicaid programs to people with incomes up to 138 percent of the federal poverty level. Under the law, the federal government will pay the entire cost of covering newly eligible individuals for the first three years. After that, the federal government’s share declines, reaching 90 percent by 2020. If all states were to take part in the full expansion, an additional 18 million Americans would be covered by Medicaid.
But many state leaders, especially Republicans, have been leery of sharply expanding their Medicaid programs; many worry that the federal government might reduce funding. As an alternative, they have floated the idea of partial expansions — extending coverage, for instance, to all adults with incomes up to 100 percent of the poverty level — while still having the federal government foot the entire bill.
On Monday, Secretary of Health and Human Services Kathleen Sebelius said no. In a memo to all 50 governors, she said that “the law does not provide for a phased-in or partial expansion.”
States might still be able to get federal dollars to do a partial expansion, the memo said. But at least from 2014 through 2016, those states would receive their regular federal match rate — which varies from 50 percent to 78 percent, depending on the state. States would also have to apply for federal permission for such a partial expansion.
After 2017, the memo said, states might be able to get the higher federal match for a partial expansion as part of a broad “innovation waiver.” States can apply for such waivers starting that year.
These waivers exempt states from many of the law’s specific mandates as long as they can prove that there will be no increase in the numbers of uninsured residents and that insurance plans will be no less affordable or comprehensive.
Interest in the partial expansion idea has been growing since June, when the Supreme Court found that states can’t be penalized for opting out of the law’s full expansion.
In a statement Monday, Louisiana Gov. Bobby Jindal, chairman of the Republican Governors Association, said that by removing the possibility of partial expansion, the administration had made the decision facing states “more difficult.”
“The Obama Administration’s refusal to grant states more flexibility on Medicaid is as disheartening as it is short-sighted,” Jindal said.