How Feds’ Rejection Of Partial Medicaid Expansion Affects Idaho

Molly Messick / StateImpact Idaho

Sen. Dean Cameron expressed last week that he would like see a proposal for what he called a "reduced benefit" Medicaid package.

The Obama administration told states Monday they cannot partially expand Medicaid eligibility and receive the federal funds the Affordable Care Act provides to cover the expansion.

As the ACA was originally written, people with incomes up to 133 percent of the poverty level would be eligible for Medicaid.  The U.S. Supreme Court’s June ruling on the constitutionality of Obamacare changed that, granting states the right to choose whether or not to expand Medicaid eligibility.  The federal government bears the lion’s share of the cost burden, initially covering 100 percent of the cost of the expansion, phased down to 90 percent by 2020.

As NPR’s Julie Rovner reports, Republican governors wondered whether the ruling allowed them greater flexibility.  Could they expand Medicaid eligibility only somewhat, to those with incomes up to 100 percent of the poverty line, for instance?  The short answer, Rovner says, is no.

After several months of consideration, the Obama administration delivered its decision Monday, as part of a series of questions and answers for states about Medicaid expansions and setting up health care exchanges.

“Congress directed that the enhanced matching rate be used to expand coverage to 133 percent” of the federal poverty level, says the document. “The law does not provide for a phased-in or partial expansion.” – NPR

What states are able to do is offer a stripped-down benefit package to those who become eligible for Medicaid under the expansion. “The way the law is currently written, you can provide a more limited benefit package than the traditional Medicaid package to the expansion population,” explains Laura Summers, of Utah-based Leavitt Partners.  (That’s the consulting group that prepared a report for the Idaho Department of Health and Welfare earlier this year on the size of the Medicaid expansion population in Idaho.)

Sen. Dean Cameron, co-chair of the Legislature’s Joint Finance-Appropriations Committee, said last week he would like to see Idaho consider that option.  “What I’m a little disappointed in is — no one has come forward to do the Medicaid expansion under a revised, reduced benefit.  Some minimal approach, if you will,” he said.

Leavitt Partners’ Summers says states are also considering cost-containment strategies that shift accountability onto Medicaid enrollees, such as the introduction of cost sharing, or the use of health savings accounts.  “There is some question, still, about how much flexibility states could have,” she said.

A work group appointed by Gov. C.L. “Butch” Otter recommended unanimously that Idaho opt into the Medicaid expansion, but several lawmakers have indicated to StateImpact that they believe the expansion faces an uphill fight in the Idaho Legislature.