Will Six Million Americans Be Denied Healthcare Coverage? It's Up to the States

Last Updated Jun 1, 2010 6:30 AM EDT

State politics could play a surprisingly big role in determining how many lower-income people will get healthcare coverage under the Affordable Care Act. A new study suggests that state governors and lawmakers could determine whether more than 6 million people end up covered by an expanded Medicaid program. Given local opposition to many other aspects of healthcare reform, typically in Republican-controlled states, that could be be a big problem.

Depending on how aggressively states try to enroll newly eligible people in their programs, the number of new Medicaid enrollees could range from 15.9 million to 22.8 million, and the reduction in the number of uninsured could vary from 11.2 million to 17.5 million.

The states will take relatively little financial risk if they try hard to enroll the newly eligible adults -- who can qualify for Medicaid if they make less than 133 percent of the federal poverty level. According to the Kaiser Family Foundation report, the standard scenario -- which assumes that 57 percent of the newly eligible people sign up for Medicaid -- would cost the states only $21 billion from 2014-2019. The federal government, in contrast, would spend $444 billion more on Medicaid than it would have without the reform law.

In the aggressive promotion scenario, which assumes a 75 percent enrollment rate, state spending would increase by $43 billion while federal spending would increase by $532 billion. The federal contribution, while still covering most of the cost, would be a lower percentage because more people who are already eligible for Medicaid would sign up. But the states would benefit from higher enrollment because the reform statute reduces the amount of federal reimbursement for charity care that is reimbursed by the states. By bringing more people into Medicaid, states would reduce the shortfall they'd have to cover in their own uncompensated care programs.

Nevertheless, the researchers point out, it's difficult to predict how many states will aggressively enroll the uninsured in Medicaid. Partly because of the impact of the recession on state budgets, as well as the opposition of more than 20 states to the entire reform program, many will probably choose not to participate in the Medicaid expansion initiative.

Nineteen states have already turned down the opportunity to participate in Washington's high-risk insurance pools for people with pre-existing conditions. But on that issue, as a new study points out, their concerns may be justified: the $5 billion that Congress allocated for those pools between now and 2014 just isn't enough. By contrast, the Affordable Care Act requires the federal government to fund most of the Medicaid expansion. So if some states decline to participate in that program, which would benefit so many of their residents, it's hard to conclude that anything except politics is at work.

Ultimately, Americans have to decide whether they want to help the least fortunate among us, or continue with an "every-man-for-himself" approach. If it's the latter, the rest of us will pay even more as the system collapses around us.

Image supplied courtesy of Wikimedia Commons.

  • Ken Terry

    Ken Terry, a former senior editor at Medical Economics Magazine, is the author of the book Rx For Health Care Reform.