The administration is revving up their campaign to promote the ACA and the forthcoming exchanges beginning in 2014, but some of America’s poorest will not be eligible to participate in their state Medicaid programs. Many southern and midwestern states have decided not to expand their Medicaid programs, which would have been almost entirely subsidized by the federal government in the initial years. The Supreme Court provided this opening by way of their ruling last year, which gave states the right to opt out of the Medicaid expansion under the ACA. People who have incomes from 138% of the poverty level up to four times that amount ($15,860 to $45,960) will be eligible for subsidies to purchase coverage on the exchanges, but without Medicaid expansion those below will be left out.
With the many twists and turns of the law, it is ironic that these mostly pro-business-leaning states will see the cost of the care for these members flow back into the system and negatively impact employers. While employees with available employee coverage could see some expansion, the cost of participating in their employer plan will most likely be prohibitive. Income thresholds will also exempt them from the penalty under the individual mandate. So what will happen is these citizens will continue to access care through emergency rooms, which means their care will go uncompensated and fall back onto employers through cost shifting to the private sector plans.
Certainly, states have fought hard for the right to set their own policies and with many states having balanced budget amendments, the Medicaid expansion was seen as a budget buster once the federal dollars dried up. A state like Tennessee, which shares a border with eight other states, is holding off on Medicaid expansion. Knowing that most bordering states would forgo the Medicaid expansion, Tennessee foresaw a spiral to costs with an influx of residents. There are many unintended consequences of this law, leaving states to deal with the harsh realities.