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Medicaid Matters: Understanding The Limits Of The Affordable Care Act
01/02/2017 Health Care Andrew S
keywords: Medicaid ACA Obama Care

Few laws in American history have been more controversial than the Patient Protection and Affordable Care Act. Commonly known as Obamacare, the Act seeks to provide all Americans with health insurance. While Democrats praise the law for raising the insured rate and saving lives, Republicans condemn it as an expensive, invasive extravagance, and have sought to overturn it since day one. Whatever its ultimate merits, the Affordable Care Act has yet to achieve its goal of universal health insurance, thanks in large part to the Medicaid expansion gap.

Health Plan Particulars

Along with the individual mandate, the insurance exchanges, and federal subsidies, Medicaid is one of the main tools that the Affordable Care Act uses to expand health coverage. Medicaid is a public health insurance program for low-income Americans, jointly funded by the US Federal and state governments. The Affordable Care Act sought to expand the program so that individuals and families making less than 133% of the Federal poverty line could enroll. This would provide millions of Americans with insurance they could not otherwise have afforded.

Under the original text of the law, all states had to expand Medicaid, though the Federal government would pay for most of the cost of doing so. Any state that did not expand it would lose all its Federal Medicaid funding. Because no state could afford to sustain Medicaid on its own, this effectively compelled the entire country to expand. The Supreme Court, however, ruled in National Federation of Independent Business v. Sebelius that the Federal government could not constitutionally withhold all Medicaid funding from non-compliant states; it could only withhold the additional funding needed for the expansion. Since then, 18 states have refused to expand the program, voluntarily foregoing additional Federal funding in order to resist Obamacare.

Insurance Interdict

By refusing to expand Medicaid, non-compliant states have severely limited the effectiveness of the Affordable Care Act. Since 2013, the insured rate in compliant states grew from 76.8 percent of the population to 85.4 percent, an 8.6 percent increase. In non-compliant states, the rate has only grown by 4.6 percent, from 72.1 to 76.7 percent.

Critics of the Affordable Care Act argue that expanding Medicaid is too expensive. Although the Federal government pays for 90 percent of the long-term cost of expansion, some have argued that states cannot afford their 10 percent contribution. Supporters of the law counter that by improving public health, preventing deaths, and lowering emergency room costs, expanding Medicaid will more than pay for itself.

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