Supreme Court Ruling on Medicaid Causes Concern Over Health Coverage

As Thursday’s Supreme Court ruling on the health care law is examined, experts are citing concerns about the Medicaid decision, which could end up insuring fewer Americans as states opt out of expansion.

The high court ruled that the Affordable Care Act could not force states to extend Medicaid coverage to 16 million Medicaid patients by threatening to withhold federal funding. The act’s provision to expand Medicaid, scheduled to take effect in 2014, is key to insuring more Americans.

Helene Levens Lipton, PhD

Medicaid serves U.S. citizens or legal permanent residents, including low-income adults, their children, and people with certain disabilities. Poverty alone does not necessarily qualify someone for Medicaid, which is the largest source of funding for health care services for people with limited income in the nation.

“This ruling is disappointing because now some states will be able to opt out of providing health insurance to the most vulnerable among us, our nation’s poor,” said Helene Levens Lipton, PhD, a professor of health policy in the UCSF School of Pharmacy’s Department of Clinical Pharmacy and faculty member of the Philip R. Lee Institute for Health Policy Studies in the UCSF School of Medicine.

“The beauty of the health care law as it was written is that it had a ‘stick’ to states that opt out of Medicaid expansion by running the risk of losing the federal share of the state’s Medicaid dollars,” she said. “Now that stick is gone.”

Edward H. Yelin, Ph.D

Ed Yelin, PhD, professor of medicine and health policy in UCSF Institute for Health Policy Studies, says the federal financial incentives for expanding Medicaid remain.

"As with everything in the law, for the Medicaid provisions there were two approaches — the carrot and the stick. The penalties that were challenged were only part of it; there is also a carrot — the federal government would pay for 100 percent of the expansion for the first couple of years and 90 percent thereafter."
 
Yellin, who has been a longtime policy expert at UCSF, says one of the reasons the Affordable Care Act received support is because it aims to insure more people. "When President Clinton tried in the early 1990s to reform the health care system, he didn’t have the support of the health insurance industry, the hospitals or the doctors on board. The reason that they came on board this time is that with the growth in the proportion of the population that is uninsured, it became untenable for health care institutions and individual providers to provide free care for the uninsured."

As cash-strapped states decline to expand coverage, Lipton is concerned that health disparities across the country will increase. Medicaid coverage already varies widely from state to state as the criteria for eligibility and the scope of benefits differ. Even California is cutting back on Medicaid funding, she said.

“California has a generous history of coverage in terms of benefits and choice of provider, but even here, the state has been slicing and dicing away at Medi-Cal in the face of the huge deficits,” she said.

Lipton asserts that this issue will need further analysis and discussion in the coming weeks and months.