The Supreme Court ruling upholding most of the national health-care law also struck down a provision that would have forced states to raise their Medicaid eligibility standards to cover more low-income Americans or face the loss of federal Medicaid funds for existing programs. The high court said the penalty was too coercive.
The law would have required states to grant eligibility to those with incomes up to 133 of the federal poverty level. Several states balked at the requirement even though Washington would pay 100 percent of the added costs for new enrollees the first three years and 90 percent after that. The federal reimbursement rate now is about 59 percent for the joint federal-state program. The broader coverage was expected to expand health insurance to another 17 million low-income Americans.
The ruling now makes participation in the expanded Medicaid plan voluntary. The governors of Florida, Louisiana, Iowa, South Carolina and Mississippi say they will not participate while 26 other states have not decided. Hesitant governors and state lawmakers question whether the increased federal funds will be maintained. If not, the added costs could shift more of the burden to already cash-strapped states.
Another aspect of the law in question is whether the court ruling allows states to further limit eligibility, which had been barred by the Affordable Health Care Act. Doing so could reduce Medicaid rolls as in Maine, which is considering changes that could slash 20,000 recipients from the program.
A possible alternative is to direct people to private online insurance markets being created by law.
States might be reluctant to add to their costs, but in such economic times it is important to preserve the safety net for those who need it.