Increased federal funding for partial Medicaid expansion on hold as federal ruling looms

With a decision looming in the Fifth U.S. Circuit Court of Appeals on the constitutionality of the Affordable Care Act (ACA), the Trump administration announced it will not increase funding for any state seeking partial Medicaid expansion.

The lawsuit against the ACA, led by 18 attorneys general, requests the court to throw out the entire health care act on the grounds that it is unconstitutional.

Earlier this year, attempts were made by some states to partially expand Medicaid. Utah requested the federal government pay 90 percent of its partial expansion costs, keeping the state’s share at 10 percent. But the Trump administration declined and Utah will instead be responsible for 30 percent of costs.

The Washington Post reported that "White House advisers argued that it did not make sense to approve generous federal funding under the ACA while the administration is arguing that the entire law should be overturned,” the Washington Post reported.

The Centers for Medicare and Medicaid Services said the administration would “continue to only approve demonstrations that comply with the current policy” of paying the 90 percent match to states that expand to 138 percent of the poverty level.

Currently, 36 states and the District of Columbia have adopted Medicaid expansion; 14 opted out.

States have signed up more than twice as many able-bodied adults as projected at a per-person price tag nearly twice as high as projected, according to an analysis by the Foundation for Government Accountability (FGA).

Individuals qualifying for Medicaid coverage can continue to do so in perpetuity as long as their incomes stay below 138 percent of the federal poverty level, regardless if they already have health coverage, the FGA notes.

"Medicaid expansion – whether partial or full expansion – threatens limited resources for truly needy individuals and creates a new welfare class of able-bodied adults," Kristina Rasmussen, vice president of federal affairs at the FGA, told The Center Square. "The Trump administration is right to prevent states from dipping their toes into the waters of bad policy. Hopefully, this move will dissuade other states from embracing Medicaid expansion and will instead encourage lawmakers to consider Medicaid reform that promotes work."

In 2010, the ACA allowed for the largest expansion of Medicaid, allowing the federal government to match funds for coverage of childless adults with incomes up to 138 percent of the federal poverty line or whose average annual income was $12,140.

As of December 2018, Medicaid covered roughly 65.9 million individuals, or 20 percent of those living in the U.S.

Nearly 54 percent of potential Medicaid expansion enrollees already reported having private coverage; another 12 percent of potential enrollees already had access to the coverage through the ACA exchange.