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Feds rule on health care law's Medicaid expansion

Feds rule on health care law's Medicaid expansion

December 11th, 2012 in News

WASHINGTON (AP) - States must commit to fully expanding their Medicaid programs to take advantage of generous funding in the federal health care law, the Obama administration said Monday.

The ruling affects a federal-state program that covers nearly 60 million low-income and severely disabled people, caught in a tug-of-war between Republican governors and the Democratic administration.

President Barack Obama's health care law expanded Medicaid to cover people up to 138 percent of the federal poverty line, or about $15,400 for an individual. The change mainly affects low-income adults without children at home, as well as low-income parents who can't get coverage under current Medicaid rules.

Under the law, the federal government will cover 100 percent of the cost of the first three years of the expansion, gradually phasing down to a 90 percent share - still a far more generous match than states have traditionally received. The expansion, scheduled for 2014, is expected to provide coverage to about half the 30 million uninsured people who will benefit from the law.

But some governors said Medicaid was already straining their state budgets to a breaking point, and the Supreme Court in June gave states the right to opt out of the expansion. Since the court decision, Republican governors have been asking if they can do a partial expansion.

The administration's ruling puts the ball back in the states' court. Administration officials said states can expand Medicaid part way, but they wouldn't get the three years of full federal funding provided under the law.