States May Opt Out of Medicaid Expansion, Court Rules

Margaret Dick Tocknell, for HealthLeaders Media , June 29, 2012

The ruling wasn't entirely surprising to stakeholders who follow the Medicaid market. The initial policy, which denied even their existing Medicaid funding to state's that declined to expand their program "always seemed like overreach," Mary R. Grealy, president of the Healthcare Leadership Council, told HealthLeadersMedia.

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Stakeholders reached by HealthLeaders Media in the immediate aftermath of the Supreme Court decision were split as to whether most states will eventually sign on to the expansion. The PPACA sweetens the participation pot with a guarantee that the federal government will pay 100% of the cost of the Medicaid expansion for the first three years and at least 90% after that.

That should be enough to get states interested, says Donald Fisher, PhD, president and CEO of the American Medical Group Association.

However, if the early reaction by governors like Scott Walker (R-WI) is any indication, pushback against anything related to PPACA will reign for a while longer. "Wisconsin will not take any action to implement ObamaCare," said Walker in a press statement.

Mark Lutes, an attorney at Epstein Becker Green in Washington, DC, said that even with the 100% sweetener and the elimination of the penalty, participation in Medicaid expansion is not to be taken lightly. "What happens when federal funding drops to 90%? A state that's already struggling with its existing Medicaid budget may not be able to take the risk."

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