The Obama administration likely won't see Medicaid expansion in all 50 states. Will the next administration?

Topics: Health Care Spending, Health Care Reform, Medicaid, Politics and Policy, Federal Government, Health Care Legislation, Regulatory, State Government


The Obama administration has a renewed energy, focus and optimism in its efforts to expand Medicaid under the Affordable Care Act in all 50 states.

HHS Secretary Sylvia Mathews Burwell in a press briefing last month said she expects every state will eventually expand Medicaid -- and many experts think she's right.

Experts: All 50 states expected to expand Medicaid eventually >>>

Shortly before Burwell's prediction, Louisiana became the 31st state -- and the first in the Deep South -- to opt in to the law's Medicaid expansion. The state estimates about 300,000 state residents will enroll in the expanded program, which will launch July 1.

To keep up the momentum, President Obama proposed in his fiscal year 2017 budget proposal that Congress extend the federal government's 100% funding share of Medicaid expansion costs to cover the first three years of a state's expansion -- no matter when that expansion takes place.

Currently, the federal government funds 100% of Medicaid expansion costs only through 2016. From there, the federal government's share of the costs will gradually drop, reaching 90% by 2020.

Experts: Expansion may have to wait for the next administration

Most health policy experts believe Obama's proposal would be a game-changer for holdout states, but they are less optimistic that Congress will embrace the president's proposal.

Matt Salo, executive director of the National Association of Medicaid Directors, in an email to American Health Line noted that while such a proposal "definitely would be a strong compelling factor for a lot of states," it has "a zero percent chance" of being enacted by Congress.

According to Salo, "Much of the holding out is based on sharp political opposition to the ACA, but there's also a significant undercurrent of frustration with the [limited] flexibility that is being allowed by the current administration."

He said there would be "a lot more states in the yes column" if, after the SCOTUS ruling that allowed states to opt into the program, the administration had "said they would be open for business on ideas, and would entertain something as simple as allowing states to expand Medicaid to 100% of the federal poverty level, and have subsidized exchange coverage for those above that level." He added, "We've reached the limits of what the current administration is willing to allow, and so a bunch of the holdouts are simply waiting for a new administration."

Len Nichols, a professor of health economics at George Mason University, also told American Health Line that the proposal is unlikely to be enacted while Obama is in office.

Each state's Medicaid expansion battle is unique, according to Nichols. "Opposition will probably be stronger in non-expansion state legislatures this year, when the elections hold out hope ... of a new president and repeal," he said. However, the proposal "could be part of package deal amending/replacing the ACA" under the next president.

Where states stand on Medicaid expansion

Of the 31 expansion states, six -- Arkansas, Indiana, Iowa, Michigan, Montana and New Hampshire -- have struck alternative expansion deals with the administration, most of which include some form of cost sharing for beneficiaries.

Meanwhile, 19 states have not expanded their Medicaid programs. Five of those states -- Alabama, South Dakota, Utah, Virginia and Wyoming -- are considering expansion plans, although their efforts have mostly stalled:

Alabama Gov. Robert Bentley (R) in November 2015 said his administration is examining whether to expand the state's Medicaid program under the law;

South Dakota Gov. Dennis Daugaard (R) this week is expected to move forward with a proposal to expand Medicaid under the ACA after receiving commitment from CMS to cover 100 percent of care provided at facilities indirectly linked to the Indian Health System;

Utah Gov. Gary Herbert's (R) effort to expand Medicaid under the Affordable Care Act stalled in October after the state House rejected his proposal, which would have allowed individuals to receive financial assistance to purchase private health plans;

Virginia Gov. Terry McAuliffe (D) in December unveiled a Medicaid expansion proposal that would require most hospitals to pay an annual fee to help cover the state's share of expansion costs. However, lawmakers in the state House and Senate nixed the program in their respective two-year budget proposals; and

The Wyoming Senate last month voted against an alternative Medicaid expansion backed by Gov. Matt Mead (R). The plan, which would have extended the program to about 18,000 state residents with incomes up to 138% of the federal poverty level, called for a federal waiver to allow the state to charge monthly premiums and copayments to low-income individuals who choose to participate.

by Heather Drost, contributing editor