CMS official indicates states can opt in, out of Medicaid expansion at any time

A senior Centers for Medicare & Medicaid Services official said this week that the federal government would permit states to join and drop out of the ACA Medicaid expansion at any time, and also hinted that states may partially implement the Medicaid exansion scheme (Source: "CMS Points to New Flexibility for States Under Health Reform's Medicaid Expansion," Bloomberg News, Aug. 7, 2012).

In June, the Supreme Court ruled that the federal government could not require states to expand their Medicaid program under the ACA. The Kasich Administration has indicated that it is still weighing its options and has not reached a decision on whether Ohio will expand its Medicaid eligibility.

The ACA calls for the federal government to pay 100 percent of the cost for new enrollees for the first three years of the expansion, with the federal share then gradually reduced to 90 percent in 2020 and beyond. States would get the standard federal matching rate, which is about 67 percent in Ohio, for those already eligible for Medicaid prior to the expansion.

Another consideration for states is that if they do not expand Medicaid coverage to all individuals earning less than 133% of the  Federal Poverty Limit, there could be gaps in coverage for some lower income individuals. Premium and cost-sharing subsidies for purchasing insurance through the exchange start at 100% of the FPL, making it possible that in a state without a Medicaid expansion, some people may be ineligible for both Medicaid and exchange subsidies.

Last month, the Health Policy Institute of Ohio released a policy brief titled “The Supreme Court's ruling on the Affordable Care Act: A review of the decision and its impact on Ohio” (pdf, 8 pages) that outlines Ohio's considerations for expanding Medicaid eligibility under the ACA.