In June 2012, the U.S. Supreme Court ruled unconstitutional key provisions of the federal Affordable Care Act of 2010. These portions of the ACA would have denied federal matching Medicaid funds to states that chose not to extend Medicaid eligibility to people with incomes of up to 133 percent — practically speaking, 138 percent — of the federal poverty level.[*] Prior to passage of the ACA, most state Medicaid programs limited eligibility primarily to children and their parents, and only a few states enrolled childless adults earning above 100 percent of the federal poverty level. As a result of the court’s decision, Michigan and other states now have the opportunity to compare the costs and benefits of expanding Medicaid eligibility without the threat of losing substantial federal monies.
Graphic 1: 2013 Federal Poverty Levels
Source: U.S. Department of Health and Human Services.
The ACA was initially expected to provide coverage for 32 million uninsured individuals and families when fully implemented.[†] About half of the newly covered were expected to obtain private coverage, while the other half would enroll in an expanded Medicaid program. The ACA contains financial incentives designed to strongly encourage states to expand Medicaid eligibility. The Obama administration and advocates of the plan have touted the benefits of expanding Medicaid. In addition to providing health coverage and improved access to care for low-income uninsured individuals, the federal government promises to pay most of the cost.
Michigan has an important choice to make. A thorough discussion of the Medicaid expansion must involve costs, obstacles and potential pitfalls.