Medicaid Decision: The Fallout


By Hadley Heath

The lesser-told story about the Supreme Court's ruling on ObamaCare was the Court's finding of the law's Medicaid expansion to be unconstitutional.  The Majority rule, "The constitutional violation is fully remedied by precluding the Secretary from applying §1396c to withdraw existing Medicaid funds for failure to comply with the requirements set out in the expansion."  In English, this means states can refuse the Medicaid expansion and keep their Medicaid programs as they are currently.

Several states have already come forward saying that is exactly what they will do.  

As if on cue, The Atlantic Wire asks "Is Your State Refusing Federal Money for Poor People?"  Ha. If the sitution were truly that simple, then why would states have challenged the Medicaid expansion in the first place?  The "free" money from the federal government is anything but.  A careful analysis shows that after a 3-year transition period, states will take on an enormous financial responsibility for the Medicaid expansion, so it's understandable that cash-strapped states - especially in light of competing priorities like K-12 education - would opt out of the expansion.

The states that have opted out so far are Florida, Texas, Mississippi, South Carolina, Iowa, and Louisiana.  On top of that, the Atlantic reports, there are 27 other states (many led by Democratic governors) who are sitting on the fence.

And good for them.  Typically, the governors who opposed the expansion cite costs as the limiting factor.  But they should also be aware of the poor condition of the existing Medicaid program.  At low reimbursement levels for doctors, these patients often receive poor quality, slow care.  This should be enough to give pause to those who want to simply dump millions of new beneficiaries on to the Medicaid rolls.

There's another solution for Medicaid, a better one: block grants.  This would provide states with the ultimate freedom to address the needs of their low-income populations with no federal strings attached.  Americans understand that block-granting many welfare programs in the mid-1990's was a successful policy move.  Rather than throw more people and more money into the already broken Medicaid system, why not try some real reform? 


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