Medicaid Expansion PDF Print E-mail

On June 28, 2012, the U.S. Supreme Court ruled 5-4 against a portion of the Affordable Care Act (ACA), also known as Obamacare. The component of the act in question would expand the number of people currently covered by Medicaid as well as require states that fail to comply to pay a penalty fee. The U.S. Supreme Court ruled that it is unconstitutional to require states to expand Medicaid. This ruling will instead give states the decision to expand Medicaid or not.

If Michigan were to accept the expansion, healthcare would be provided to people within 133% of the federal poverty line (FPL), an estimated 500,000 people. To help supplement the cost of the expansion, the Federal Government will cover all of the new costs of the expansion until 2016 and then drop to around 90% by 2020. Supporters of the expansion say that it will save the Michigan government approximately $200 million through 2017. Healthcare providers often charge higher premiums in order to pay for uncompensated care. Supporters say the expansion would virtually eliminate this "hidden tax" due to the fact that the amount of uncompensated care would significantly decrease. Critics of the expansion argue that it will bring higher taxes for taxpayers as well as greatly reduce federal funded Disproportionate Share payments--payments that help hospitals pay for uncompensated care.

On September 11, 2012, State Senator Bruce Caswell (R) introduced Senate Bill 1245. This bill motions to reject the expansion of Medicaid in Michigan. "Michigan already is facing potentially rising Medicaid costs," Caswell stated. He also explains that pharmacies, hospitals, and physicians would have to pay increased taxes to help pay for the expansion. In opposition to the bill Rick Murdock, the executive director of the Michigan Association of Health Plans, said "Michigan will realize cost savings directly by being able to redirect current expenditures (100 percent of general funds) now being spent on this expanded population largely for mental health."

Michigan is not the only state to consider rejecting the expansion. Governors from Florida, South Carolina, and Georgia have all stated they will not accept the federal funds while governors from Arkansas, Connecticut, and Maryland are leaning towards accepting the expansion. Rick Scott (R), the governor of Florida said, "Florida will opt out of spending approximately $1.9 billion more taxpayer dollars required to implement a massive entitlement expansion of the Medicaid program."  Many states that have already rejected the expansion say that they will save up to a billion dollars a year in the long run.  In contrast supporters such as Farrah McDaid-Ting, of the California State Association of Counties, say the expansion will save states money in the long run by helping patients get treated faster and end up making less visits to hospitals.

Some say the largest problem with the expansion is that the effect is different in each state.  States vary in the percentage of uninsured citizens and levels of residents below the federal poverty line.  This results in some states receiving more in federal funding as well as having to pay more to match these federal funds.

Greene, Jay. "State must decide whether to expand Medicaid." Crainsdetroit.com. http://www.crainsdetroit.com/article/20120701/FREE/307019973/state-must-decide-whether-to-expand-medicaid

Pear, Robert. "Republican Governor of Florida Says that State Won't Expand Medicaid." Nytimes.com. http://www.nytimes.com/2012/07/03/us/politics/republican-governor-of-florida-says-state-wont-expand-medicaid.html?_r=0

Vizena, Michael. "Michigan Association of Community Mental Health Boards." http://www.macmhb.org/Friday_Fax/091412.pdf


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