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States Still Struggling With Medicaid Expansion

By Randy Dotinga

Reviewed by Lisa Zamosky

WebMD Health News

July 26, 2013 -- As the clock ticks closer to Jan. 1, 2014 -- D-Day for health care reform -- several states are still figuring out whether they'll expand Medicaid eligibility to more poor people. Medicaid is the government's insurance program for people with low incomes.

Some states are tangled up in political debates over issues like financing and dependency on the government. Others have thrown the issue to committees that will make recommendations. And some states have looked at bending the rules to do things their own way.

To complicate things, there's no deadline for states to decide whether to expand Medicaid, although Americans will have to make decisions about their own coverage by Jan. 1. That’s when the Affordable Care Act goes into effect, requiring most Americans to have health insurance or pay a fine.

Some poor people will become eligible for Medicaid for the first time on Jan. 1 or earlier because their states approved expansion. But other states have turned down expansion, which covers adults under age 65 who aren’t pregnant, aren’t already eligible, and have incomes less than 138% of the federal poverty level -- that's $31,322 for a family of four in 2013 in 48 states and Washington, D.C; Alaska and Hawaii have their own poverty levels.

Heated Debate

The debate over expansion, which has been intense in some states, is “primarily about three things: economics, ideology, and politics," says Benjamin Sommers, MD, PhD. He is an assistant professor of health policy and economics at Harvard School of Public Health. "First, there are legitimate concerns in some states about how and whether they will be able to afford their share of the costs of the Medicaid expansion. While the expansion is very generously funded with federal dollars -- 100% for the first 3 years, 90% in the long-run -- some states may struggle to afford even that small share."

Second, Sommers says, there's a "debate about the role of government in general, and the federal government in particular." And finally, he says, there's the political reality that health care reform "is deeply politically unpopular in some parts of the country."

Earlier this month, the Kaiser Family Foundation reported that 23 states and the District of Columbia had agreed to expand Medicaid, and six were uncertain. Twenty-one weren't accepting expansion, at least at the moment. Because of differences in legislative calendars and procedures, though, the numbers are not that easy to pin down.

New Hampshire and South Dakota have thrown the issue to committees. Utah is looking at a system proposed in Arkansas that would allow poor people to buy private insurance with Medicaid dollars. In Arizona, where expansion was pushed through recently, a move is afoot to repeal it.

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