The original idea for expanding coverage under the ACA was that about half of the newly insured would gain private health plans through the marketplaces and the other half would become eligible for Medicaid under a major expansion of the 1960s-era program that has been a joint responsibility of the federal government and states. Instead of the patchwork of eligibility rules that existed around the country, there would be national standard in which anyone with income up to 138 percent of the federal poverty level could qualify.
That expectation ended in 2012, when the Supreme Court, as part of a ruling that upheld the law’s constitutionality overall, gave each state the latitude to decide whether to participate in the ACA Medicaid expansion. As of now, 31 states and the District of Columbia have. For states that expanded Medicaid, the federal government paid 100 percent of the cost for newly eligible enrollees for the first few years, and the federal share is now ratcheting down to an eventual 90 percent.
While some states with Republican governors have expanded Medicaid under the ACA, the Trump administration and many GOP leaders in Congress oppose it. The president has recently indicated that he supports an idea, long popular in conservative circles, that would fundamentally change Medicaid, transforming it from an entitlement (meaning that everyone who is eligible can get into the program and the government spends whatever is needed to provide its benefits) to a program of block grants, in which the government allots to each state a fixed amount of money each year and frees states from many of the program’s rules about what health services must be covered.
Block grant proponents say that they would give states more flexibility to run their programs as they see fit; detractors say they are a smokescreen to curb federal spending and ultimately would hurt poor people.