The Six States That Can’t Decide on Medicaid Expansion

A small handful of states remain in negotiations with themselves and the federal government over if and how to expand Medicaid under the Affordable Care Act.

National Journal
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March 19, 2014, 8:08 a.m.

For the fi­nal six hol­d­outs, the de­cision of wheth­er to ex­pand Medi­caid un­der the Af­ford­able Care Act has be­come a del­ic­ate tug-of-war between state of­fi­cials and the fed­er­al gov­ern­ment.

The Af­ford­able Care Act ex­pands Medi­caid cov­er­age to all adults be­low 138 per­cent of the fed­er­al poverty level. Un­der the law, the fed­er­al gov­ern­ment will cov­er 100 per­cent of the cost for the first three years — from 2014 to 2016. The fed­er­al con­tri­bu­tion then gradu­ally de­clines to 90 per­cent, where it will re­main.

However, the Su­preme Court ruled in 2012 that the de­cision to ex­pand must be left up to the states. While the Obama ad­min­is­tra­tion as­sumed that states would still jump at the fed­er­al fund­ing, this turned out not to be the case.

The “road to yes,” as Matt Salo — ex­ec­ut­ive dir­ect­or of the Na­tion­al As­so­ci­ation of Medi­caid Dir­ect­ors — calls the de­cision, is com­plex and unique to each state. In those still de­cid­ing, there are a num­ber of factors — polit­ic­al, fin­an­cial, ideo­lo­gic­al — to con­sider, and vari­ous ways the pro­gram can be im­ple­men­ted.

“This is not just a ques­tion of what does the state want,” Salo says. “In this case it’s a com­bin­a­tion of the gov­ernor and le­gis­lature, which can be of the same party or dif­fer­ent parties, and can have subtly or rad­ic­ally dif­fer­ent ideas of what they want done.”

“I do think that the vast ma­jor­ity of states would like to get to ‘yes’; it’s just yes for them may look dif­fer­ent from what the ad­min­is­tra­tion is cur­rently will­ing to do,” he con­tin­ued. “A lot of states are sit­ting on the side­lines at the mo­ment and try­ing see if they can get a bet­ter sense of how far the ad­min­is­tra­tion is will­ing to come.”

The White House did not set any dead­line for a fi­nal de­cision on Medi­caid ex­pan­sion, and states may change at any time.

Cur­rently, 25 states and the Dis­trict of Columbia have op­ted in­to Medi­caid ex­pan­sion, while 19 have op­ted out. That leaves six that have not yet de­cided.

Here is what’s go­ing on in those limbo states:

New Hamp­shire

New Hamp­shire is on the brink of ex­pand­ing Medi­caid to ap­prox­im­ately 50,000 low-in­come res­id­ents. The Re­pub­lic­an-con­trolled Sen­ate voted 18-5 earli­er this month to pass the state’s ver­sion of ex­pan­sion un­der the ACA. The Demo­crat­ic-con­trolled House is ex­pec­ted to pass the bill in the next couple of weeks, and Demo­crat­ic Gov. Mag­gie Has­san has said she sup­ports it.

The bi­par­tis­an New Hamp­shire plan calls for put­ting all newly eli­gible adults in­to a premi­um as­sist­ance mod­el sim­il­ar to the ap­proach in Arkan­sas, which will use fed­er­al funds to buy private in­sur­ance plans on the ex­changes.

However, be­cause the pro­cess for im­ple­ment­ing the “private op­tion” can be lengthy — with draft­ing the waiver and put­ting it up for pub­lic com­ment — the state will move for­ward with ex­pan­ded cov­er­age in the mean­time, ac­cord­ing to De­borah Ba­chrach, part­ner at Man­att Health Solu­tions, which is as­sist­ing with Medi­caid ex­pan­sion in New Hamp­shire. Be­gin­ning Ju­ly 1, newly eli­gible adults will be­gin re­ceiv­ing cov­er­age through the ex­ist­ing Medi­caid man­aged care plan, and will later be transitioned onto the private mar­ket.

“This drives home that this is time sens­it­ive; that state lead­er­ship wants to start cov­er­age, bring in fed­er­al dol­lars, and have the fed­er­al match­ing rate,” Ba­chrach says.

The state an­ti­cip­ates that some, if not all, of the Medi­caid man­aged care plans will be­come plans on the private mar­ket, which could have a sig­ni­fic­ant im­pact on com­pet­i­tion in the New Hamp­shire ex­change, as there is cur­rently only one in­surer par­ti­cip­at­ing.


Vir­gin­ia is at an im­passe on Medi­caid ex­pan­sion, with the gov­ernor strongly in fa­vor and the Re­pub­lic­an-led House fer­vently op­posed.

Demo­crat­ic Gov. Terry McAul­iffe, elec­ted in Novem­ber, cam­paigned on the is­sue of Medi­caid ex­pan­sion and has made it his mis­sion to pass it in Vir­gin­ia. Yet while the state Sen­ate sup­ports the ex­pan­sion bill, the House is not budging. The polit­ic­al stan­doff con­tin­ues, as McAul­iffe travels the state to rally sup­port for the le­gis­la­tion ahead of the spe­cial ses­sion.

“The gov­ernor is re­l­at­ively new, and this de­bate has ex­is­ted in the Vir­gin­ia Le­gis­lature for years,” says Salo. “The gov­ernor said it’s his No. 1 pri­or­ity — the GOP prob­ably doesn’t want to hand him a vic­tory on his No. 1 pri­or­ity right away.”

The state’s Gen­er­al As­sembly ad­journed nearly two weeks ago without passing a budget or Medi­caid ex­pan­sion. The Le­gis­lature will re­turn for a spe­cial ses­sion at the end of this month, but neither side is show­ing signs of cav­ing. McAul­iffe has re­jec­ted calls from Re­pub­lic­an law­makers to sep­ar­ate Medi­caid ex­pan­sion from the two-year, $96 bil­lion state budget, and if the two sides can­not agree and pass a budget by the end of June, the state gov­ern­ment will shut down.

Ex­pan­sion would ex­tend cov­er­age to about 400,000 Vir­gin­ia res­id­ents.


If Re­pub­lic­an Gov. Tom Corbett’s pro­pos­al for Medi­caid ex­pan­sion is ap­proved, Pennsylvania will be the first state to tie work-re­lated cri­ter­ia to its Medi­caid pro­gram.

The plan is un­der re­view for ap­prov­al by the fed­er­al gov­ern­ment. Like a num­ber of oth­er states still in limbo, the pro­pos­al ac­cepts fed­er­al fund­ing to help low-in­come in­di­vidu­als pur­chase plans on the in­sur­ance ex­change. It would ex­pand Medi­caid to about 500,000 people.

However, Corbett’s pro­pos­al has at­trac­ted at­ten­tion for at­tempt­ing to es­tab­lish a work pro­gram with­in the health care pro­gram. It ori­gin­ally in­cluded a con­tro­ver­sial work re­quire­ment, which would man­date that those work­ing few­er than 20 hours a week par­ti­cip­ate in a job-train­ing pro­gram to be eli­gible for cov­er­age. The gov­ernor sent a let­ter to HHS earli­er this month, in­stead pro­pos­ing a vol­un­tary pi­lot pro­gram that would of­fer lower premi­ums and co-pays for con­sumers who par­ti­cip­ate.

The cur­rent hol­dup in Pennsylvania is more ideo­lo­gic­al than polit­ic­al, Salo ex­plains. “States are think­ing about things like how to cre­ate more per­son­al re­spons­ib­il­ity in gov­ern­ment be­ne­fits — wheth­er that’s look­ing to do drug test­ing for be­ne­fi­ciar­ies, or life­time lim­its on be­ne­fits, or re­quire be­ne­fi­ciar­ies to par­ti­cip­ate in a job search,” he says.

While HHS has ap­proved premi­um as­sist­ance mod­els in oth­er states like Arkan­sas and Iowa, these per­son­al-re­spons­ib­il­ity stip­u­la­tions enter new ground that fed­er­al of­fi­cials may not be will­ing tread.

“My sense is that the ad­min­is­tra­tion has no in­terest what­so­ever in en­ter­tain­ing any of those con­di­tions,” Salo con­tin­ues. “They don’t want to put that stigma on health care cov­er­age.”


Rep­res­ent­at­ives from Gov. Gary Her­bert’s of­fice are in D.C. dis­cuss­ing his Medi­caid ex­pan­sion plan with ad­min­is­tra­tion of­fi­cials this week. The state is cur­rently mov­ing for­ward with the Re­pub­lic­an gov­ernor’s plan, after pro­pos­als from the state House and Sen­ate failed to ad­vance be­fore the close of the le­gis­lat­ive ses­sion last week.

After re­frain­ing from opt­ing in for a long while, Her­bert made it clear in Janu­ary that he wanted to do something about Medi­caid ex­pan­sion, but he did not cla­ri­fy what ap­proach that might be un­til re­cently.

The gov­ernor’s Healthy Utah plan would ex­pand cov­er­age to adults be­low 138 per­cent of the fed­er­al poverty level, and use fed­er­al funds to buy private in­sur­ance for low-in­come adults. The plan would seek a fed­er­al block grant to cov­er the ap­prox­im­ately 111,000 Utahns un­der the in­come threshold. The three-year pi­lot pro­gram would ac­cept $258 mil­lion in fed­er­al funds in 2015.

“It’s more ro­bust [than the House and Sen­ate pro­pos­als],” says Kolbi Young, spokes­per­son for the Utah De­part­ment of Health. The House plan in­volved only state dol­lars with no new Medi­caid fund­ing, while the Sen­ate plan ac­cep­ted fed­er­al fund­ing but only ex­pan­ded cov­er­age to 100 per­cent of the poverty level.

Be­cause neither plan was passed, the gov­ernor is mov­ing ahead with his own.

The Healthy Utah plan in­cludes ele­ments of per­son­al re­spons­ib­il­ity as well. It in­volves some cost-shar­ing, and those mak­ing be­low $15,521 would pay $420 in an­nu­al premi­ums and med­ic­al costs. There is not an of­fi­cial work re­quire­ment in the pro­pos­al, but the motto as­so­ci­ated is “those who can work, do work.”

It is not yet known what the ad­min­is­tra­tion’s re­sponse will be. “The plan has not been presen­ted to CMS,” Young says. “That’s the next step.”


Mis­souri has thus far been at a stand­still between Demo­crat­ic Gov. Jay Nix­on, who very much fa­vors ex­pan­sion, and a con­ser­vat­ive Re­pub­lic­an Le­gis­lature that is very much op­posed. However, that dy­nam­ic is be­gin­ning to show signs of shift­ing, and there is cur­rently le­gis­la­tion pending in the House to ex­pand the pro­gram.

Re­pub­lic­an Rep. Noel Tor­pey chaired an in­ter­im com­mit­tee ex­amin­ing Medi­caid ex­pan­sion last fall, ac­cord­ing to the Mis­souri De­part­ment of So­cial Ser­vices. From this came the bill be­fore the Le­gis­lature, which in­volves a kind of hy­brid between premi­um as­sist­ance and tra­di­tion­al Medi­caid ex­pan­sion.

Un­der the plan, in­di­vidu­als would be eli­gible for Medi­caid be­low 100 per­cent of the poverty level. Those between 100 and 138 per­cent would use premi­um as­sist­ance to pur­chase cov­er­age on the ex­change. About 300,000 Mis­souri­ans would be newly eli­gible for cov­er­age.

The bill also in­cludes a work-re­fer­ral re­quire­ment, al­though is is not a con­di­tion of eli­gib­il­ity, ac­cord­ing to Ba­chrach.

The next House hear­ing on the bill is sched­uled for March 25.


In­di­ana has been held up on Medi­caid ex­pan­sion be­cause of a de­sire to con­tin­ue a pro­gram cur­rently in place in the state: the Healthy In­di­ana Plan.

HIP is a pi­lot Medi­caid pro­gram star­ted in 2008 that cov­ers low-in­come in­di­vidu­als whose in­comes are too high to qual­i­fy for Medi­caid but too low to buy in­sur­ance on the private mar­ket. The pro­gram is capped at about 45,000 in­di­vidu­als, and is modeled on health sav­ings ac­counts, re­quir­ing con­sumers to con­trib­ute a por­tion of their in­come so that they have a kind of buy-in for their cov­er­age. Medi­caid ex­pan­sion would ex­tend cov­er­age to about 400,000 in­di­vidu­als.

Re­pub­lic­an Gov. Mike Pence has re­mained com­mit­ted to main­tain­ing the HSA mod­el in Medi­caid ex­pan­sion con­sid­er­a­tions. In­di­ana has been gran­ted an year­long ex­ten­sion of HIP while of­fi­cials con­tin­ue to ex­plore op­tions for a full ex­pan­sion in the state.

“In­di­ana has been very very in­tent on us­ing [HIP] as the basis for Medi­caid ex­pan­sion—they want to be able to use this HSA ap­proach,” says Salo. “Un­til now, the ad­min­is­tra­tion has not looked on this ter­ribly fa­vor­ably; the ad­min­is­tra­tion is not at all in­tent on set­ting a pre­ced­ent of wide ex­pan­sion of the health sav­ings ap­proach in­to Medi­caid ex­pan­sion.”

“They’ve been at a pretty ser­i­ous im­passe there for quite some time,” he says.

The In­di­ana Medi­caid of­fice did not re­spond to a re­quest for com­ment.

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