Supreme Court’s decision upholding the Affordable Care Act was a huge
victory for millions of Americans. But the Court’s ruling on Medicaid
expansion creates uncertainty about whether Americans with incomes below
the poverty line can access health insurance.
Each state largely determines eligibility for Medicaid, a federal-state partnership to provide health care to nearly 50 million low-income
Americans. Although all states must meet minimum federal requirements,
state Medicaid programs vary widely. In most states Medicaid only covers
certain groups of low-income individuals—mostly working parents with
incomes well below the poverty line.
ensure that those who most needed health coverage could access care,
the Affordable Care Act expanded the federal minimum Medicaid
eligibility level to all people with incomes up to 133 percent of the
poverty line—$14,856 for individuals and $30,657 for a family of four.*
Estimates showed that, once implemented, this expansion would result in 17 millionAmericans gaining critical health coverage.
federal government would cover the vast majority of this expansion.
Federal payments would provide 100 percent of the needed expansion
funding from 2014–2016, gradually transitioning to 90 percent of needed
funding for 2020 and future years. This arrangement would allow states
to increase the number of insured people by an average of 25 percent,
with an increased state cost of less than3 percent.
the Court ruled that this change to the Medicaid program was large
enough to constitute not just an expansion of the existing program but
the creation of an entirely new one. Because this is a new program, the
Court concluded that Congress may not condition the receipt of a state’s
existing federal Medicaid funds on its agreement to expand Medicaid
eligibility. That eliminated the biggest incentive for states to agree
to expand their Medicaid programs to meet the Affordable Care Act
requirements. Now if states reject this offer, they will not lose their
existing federal Medicaid funding.
states opt not to expand their Medicaid programs, many low-income
individuals and families living in those states will not gain needed
coverage through Medicaid. The Affordable Care Act provides tax credits
to help pay for coverage to people with incomes starting at the federal
poverty line—$11,170 for individuals and $23,050 for a family of
four—and up to 400 percent of the poverty line —$43,320 for individuals
and $88,200 for a family of four. But even with these tax credits, the
cost of insurance may still not be affordable for some low-income
Americans with incomes below the federal poverty line are not eligible
for tax credits because Congress assumed these people would be eligible
for Medicaid under the provisions in the Affordable Care Act. Due to the
Supreme Court’s decision, states may decide to not expand Medicaid
coverage to these people because they no longer risk losing their
existing Medicaid funds.
The result is that those who most need financial assistance to purchase insurance will be without any help.
the map above, the Center for American Progress illustrates how people
in each state will potentially be affected by their state’s decision.
numbers in the map include individuals and families with incomes equal
to 138 percent of the poverty line. The Affordable Care Act includes a
special deduction to income that effectively raises the eligibility
level by 5 percentage points.