Medicaid and the Affordable Care Act after the Supreme Court Decision

Abstract

The June 2012 Supreme Court decision (National Federation of Independent Business [NFIB] v. Sebelius, 2012) upholding much of Affordable Care Act (ACA) marked major step forward in century-long effort achieve universal health care coverage in United States. As Elizabeth Clark, NASW's chief executive officer, noted, decision gives nation a great opportunity expand coverage and access, and bring spiraling health care costs under control (Clark, 2012). This is truly reason for celebration (Dworkin, 2012). Leading up decision, much attention had focused on question of constitutionality of individual mandate, which requires Americans maintain 'minimum essential health insurance coverage' or '[s]hared responsibility payment' Federal (NFIB v. Sebelius, 2012, p. 1). The government had argued that mandate could be justified under two clauses in Constitution: so-called commerce clause, which gives Congress right regulate interstate commerce, and clause giving Congress right lay and collect taxes (cited in Dworkin, 2012). In surprising decision, Chief Justice John Roberts, speaking for majority, ruled that mandate could not be justified under commerce clause, but it could under power of Congress and spend (Jost, 2012). Although Congress cannot require individuals purchase insurance, it can tax people who fail do so (lost, 2012). Even more surprising than decision upholding mandate was court's ruling on Medicaid. As part of its strategy expand health care coverage, Obama administration included in ACA provision requiting states extend Medicaid coverage individuals earning below 138 percent of federal poverty line (FPL), nearly $30,000 for family of four (Madrick, 2012). States failing do this would be denied all federal funding for Medicaid. By seven-to-two margin, however, Supreme Court ruled this unconstitutional, reasoning that because many states rely on Medicaid funds balance their budgets, this provision left the states no real option decline (Dworkin, 2012). The court's decision now gives states option of refusing expand coverage without losing all Medicaid funds. This was first time court has struck down conditions on federal grants states that it determined 'cross line from enticement coercion' (Swendiman & Baumrucker, 2012, p. 10). This decision could have dramatic and adverse impact on individuals living near and below FPL ($11,170 for single individual in 2012; $19,090 for family of three), particularly childless, nonelderly adults, who in most states have not been eligible for Medicaid but would be under ACA (Rosenbaum & Westmorland, 2012). Under ACA, individuals with incomes below 100 percent of FPL are not eligible for tax credits assist them in buying insurance through new health exchanges. The assumption was that these people, as well as individuals with incomes between 100 percent and 133 percent of FPL, would be covered through Medicaid expansion (Community Catalyst, 2012). Although individuals with incomes between 100 percent and 133 percent of FPL will still be eligible for credits, this may not be enough to make coverage truly affordable (Community Catalyst, 2012). In light of court decision, individuals with incomes below 100 percent of FPL are no longer guaranteed coverage through Medicaid or exchanges (Angeles, 2012). In median state, cutoff point for receiving Medicaid for working parent is around $12,000 for family of three and around $7,100 for an unemployed parent (Angeles, 2012). Individuals earning above this will be ineligible for Medicaid. At same time, according Congressional Budget Office (CBO, 2012), around two-thirds of people previously estimated become eligible for Medicaid as result of ACA will have income too low qualify for exchange subsidies. …