The Affordable Care Act (ACA) expands eligibility to the Medicaid program by requiring participating states, by 2014, to cover nearly all people under age 65 with household incomes at or below 133% below the federal poverty level. Medicaid is jointly funded by federal and state funds and the ACA requires the federal government to cover 100% of this expansion from 2014 through 2016, with gradual reductions beginning in 2017 until it reaches 90% funding in 2020 and continuing thereafter. Because federal funds are necessary for states to provide Medicaid, the states are arguing this expansion is “coercion” meaning they are being forced to provide Medicare coverage even though technically Medicaid is a voluntary program to the states.
If the Medicaid expansion is struck down, millions of low income patients who would be qualified under the expanded eligibility provisions will lose access to health coverage. Kaiser Family Foundation estimates that as a result of the ACA changes Medicaid enrollment is projected to increase by 15.9 million by 2019. These individuals likely would not be able to afford to purchase health insurance coverage in the Exchanges (were the Court to uphold those provisions of the law) or on the individual market.
If these individuals lack health insurance coverage they are less likely to see a health care provider until their condition worsen to the point where they need emergency care. This could result in not only an increase in overall health care costs, but would mean providers likely would not be compensated for the care they provide; a situation exacerbated by the payment reductions to hospitals and other providers called for under the ACA. Moreover, the ACA increased Medicaid reimbursement rates (which are historically low in most areas of the country) to Medicare reimbursement levels in order to encourage more providers to treat Medicaid patients to the benefit of both existing and newly eligible beneficiaries. Were the Court to strike these provisions, many of the individuals currently in the Medicaid program will likely continue to face challenges in finding providers who will treat them.