Policy Tip Sheet: Medicaid Expansion

Published January 22, 2012

In this policy tip from Heartland, the author notes that in the wake of the U.S. Supreme Court’s decision on the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, states must now decide whether to expand their Medicaid programs by accepting a larger federal subsidy.

The PPACA required states to expand their Medicaid eligibility to all individuals with incomes between 133 percent and 138 percent of the federal poverty level. States that failed to meet this requirement would no longer receive any federal Medicaid grants at all. The Supreme Court, however, ruled states could not be required to expand their Medicaid programs in order to continue receiving current levels of federal support. Therefore, states are not required to expand their Medicaid programs, but the offer of “free money” is proving tempting to many states.

The problem with PPACA, however, is that those states accepting federal monies will be saddled with more regulation and more costs to fulfill the requirements of the law.