NYT: Feds Won't Fund Partial Medicaid Expansion, 6 State Health Exchanges Approved

Obama Approves Health Insurance Marketplaces in 6 States

By Robert Pear  New York Times  December 10, 2012


WASHINGTON - The Obama administration gave conditional approval on Monday to health insurance marketplaces being set up by six states led by Democratic governors eager to carry out President Obama’s health care overhaul.

The six are Colorado, Connecticut, Maryland, Massachusetts, Oregon and Washington.

At the same time, the administration rejected pleas from other states that want to carry out a partial expansion of Medicaid, to cover fewer people than the president and Congress originally intended. Some states want to expand Medicaid to cover childless adults with incomes up to the poverty level, $19,090 for a family of three.

But Cindy Mann, the top federal Medicaid official, said the federal government would pay the full cost of newly eligible Medicaid beneficiaries only if a state raised the threshold to 133 percent of the poverty level - or 138 percent, with an adjustment allowed by federal law. This would guarantee Medicaid coverage for a family of three with income less than or equal to $26,340.

Matt D. Salo, the executive director of the National Association of Medicaid Directors, which represents state officials, summarized the administration’s position this way: “No partial expansion of Medicaid. No phased-in expansion. It’s all or nothing.”

In upholding the health care law in June, the Supreme Court said the expansion of Medicaid was an option for states, not a requirement as Mr. Obama had argued. Still, the White House says the expansion would be a good deal for states because the federal government would pay the entire cost of Medicaid for newly eligible beneficiaries from 2014 to 2016 and then 90 percent or more of the costs in later years.

Republican governors expressed disappointment. “The Obama administration’s refusal to grant states more flexibility on Medicaid is as disheartening as it is shortsighted,” said Gov. Bobby Jindal of Louisiana, the chairman of the Republican Governors Association.

The White House policy, he said, “will make a state’s decision on Medicaid expansion more difficult.”

In a letter last week, Mr. Jindal and 10 other Republican governors asked Mr. Obama to meet with them to discuss Medicaid.

Dr. Bruce Siegel, the president of the National Association of Public Hospitals and Health Systems, praised the administration’s decision on Medicaid, saying it was consistent with the letter and spirit of the law, “to expand health care coverage as broadly as possible.”


The administration announced its policies in answering questions that state officials had asked about the expansion of Medicaid and the creation of online supermarkets known as health insurance exchanges.

Starting in 2014, the federal government will require most Americans to have health insurance, and it will offer financial assistance to millions of people to help them pay premiums.

Friday is the deadline for states to tell the federal government whether they intend to establish their own insurance exchanges. Federal officials will create and operate an exchange in any state that is unable or unwilling to do so.

Gary M. Cohen, a federal health official, said the federal government had received applications from 14 states that wanted to run their own exchanges. These include the six tentatively approved on Monday.

State legislators and governors of both parties say they cannot afford the Medicaid programs they have now, and they express two concerns about expanding the program.

First, they say many uninsured people already eligible for Medicaid will apply for coverage in 2014 and later years. For those beneficiaries, the federal government will pay its standard share of the costs, averaging 57 percent - not the 100 percent allowed for people who become newly eligible under the Affordable Care Act.

In addition, state officials fear that Mr. Obama and Congress will reduce federal Medicaid payments to states as part of a deal to cut the federal budget deficit.

On Monday, the administration repudiated a proposal for Medicaid savings that Mr. Obama made in 2011 and repeated in his budget request this year. The proposal would reduce the federal share of payments to health care providers treating low-income people under Medicaid.

Such a reduction could shift costs to states and reduce the likelihood of their expanding Medicaid. In negotiations with the White House, Congressional Republicans have demanded savings in Medicare and Medicaid.

Abby Goodnough contributed reporting.



First Six State Health Insurance Markets Approved by U.S.

By Alex Wayne - Dec 11, 2012

Six U.S. states became the first to meet Affordable Care Act rules for the creation of marketplaces by 2014 where local residents can buy medical insurance.

Colorado, Connecticut, MassachusettsMaryland, Oregon and Washington, all states with Democratic governors, have made enough progress building their health-insurance exchanges to receive conditional approval to begin enrolling members in October 2013, the U.S. Department of Health and Human Services said yesterday in a statement. The six represent less than half of the 14 states that have told the U.S. they will set up the online exchanges.

A majority of states, most led by Republican governors, may allow the U.S. to run the markets or choose to provide services such as consumer assistance in a partnership with the federal government. Twenty-two governors have already sent notice that they won’t build their own exchanges. The remaining states have until Dec. 14 to decide.

“The majority of states will play an active role operating their exchanges,” Kathleen Sebelius, the U.S. health secretary, said in a blog post.

The 2010 health law is expected to extend coverage to about 30 million Americans who would otherwise lack insurance starting in 2014. Congressional budget projections show that more than half of those people would buy subsidized plans through the exchanges and 11 million would become eligible for Medicaid, the state-run insurance program for the poor.

Medicaid Support

The Medicaid portion of the law is dependent on state cooperation after the Supreme Court ruled June 28 that governors can opt out of the expansion. Some governors asked Sebelius if they could expand Medicaid by less than what President Barack Obama wants while still taking advantage of a 90 percent federal reimbursement for the program’s costs.

The Obama administration responded yesterday, saying states won’t get full federal support for expansions of Medicaid that fall short of the level directed by the health law. Medicaid is the joint U.S.-state medical program for the poor.

“The Obama administration’s refusal to grant states more flexibility on Medicaid is as disheartening as it is short- sighted,” Louisiana Governor Bobby Jindal, the chairman of the Republican Governors Association, said in a statement. “The current Medicaid system is broken, and it is an inefficient mechanism for expanding coverage.”

The law calls for Medicaid to expand to cover everyone making as much as 138 percent of the poverty level, or about $31,809 for a family of four this year. The U.S. will pick up the full cost of the expansion until 2017, when federal reimbursement begins to decline to 90 percent of the cost.

If the U.S. approves smaller expansions, states will be reimbursed at the usual federal match rate, which varies from 50 percent to 74 percent this year, depending on the state.

“The enhanced match rate is a rate Congress reserved for the full expansion,” said Cindy Mann, the U.S. Medicaid director, in a conference call with reporters. “We are going to remain true to that intent of Congress.”