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Supreme Court health care ruling allows states to cut off Medicaid to those now enrolled

WASHINGTON — Starting in 2014, things could get worse for people on Medicaid: Not only might some states opt out of increasing the number of adults in the government health insurance program for the poor as a result of the Supreme Court's ruling, but they also might cut people who now are enrolled.

This wasn't supposed to happen under President Barack Obama's health law, which was designed to expand coverage for 30 million Americans, in part by adding 17 million people to Medicaid. But the impact of the Supreme Court's ruling last week making the expansion voluntary is likely to be compounded by another provision in the law that the justices left intact: In 2014, states no longer are barred from making it harder for adults to qualify for Medicaid.

Experts worry that those two developments could spur some states to reduce the number of people covered.

States could throw some low-income adults "into a black hole with nowhere to turn for coverage," said Deborah Bachrach, who was New York's Medicaid director until 2010 and now is special counsel at Manatt, Phelps & Phillips, a New York law firm.

As a hypothetical example, if Mississippi opted out of the 2014 expansion of Medicaid, poor childless adults wouldn't gain coverage in that state.

State officials haven't talked about cutting Medicaid eligibility since the decision. But in the past several years, many have sought to reduce the cost of the program by cutting providers' rates and contracting with private managed-care companies, among other strategies.

"It's a perfectly reasonable concern" that states might make it more difficult for adults to qualify, said Sara Rosenbaum, a health policy professor at George Washington University.

Another way states might choose to minimize their costs is by shifting people who are eligible for federal subsidies to buy private insurance out of the Medicaid program and into the new online markets created by the law. That saves states money because the federal government pays the entire cost of the subsidies — unlike Medicaid, in which states share in the costs.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Supreme Court health care ruling allows states to cut off Medicaid to those now enrolled 07/04/12 [Last modified: Wednesday, July 4, 2012 10:02pm]

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