Some early reports on today’s Affordable Care Act (ACA) ruling stated the Supreme Court "overturned" the Medicaid provision. However, a closer look at the ruling shows the Court took a more subtle approach.
The Court rejected the portion of the rule that required states to choose between accepting Medicaid expansion or losing all of their Medicaid funds, notes Assistant Professor Karoline Mortensen, faculty member of the University of Maryland’s School of Public Health, College Park, Md.
To illustrate how the provision would have worked, Mortensen points to Texas, where the income eligibility requirement is 26% of the federal poverty level. Under the Medicaid Expansion provision, Texas would have to raise its eligibility requirements to 133% of the federal poverty level in 2014.
If the state didn’t comply it would have lost all of its Medicaid funds -- before Thursday's announcement.
The Supreme Court decision gives states the right to say no to expansion and continue to get the funds for the population it has now, Mortensen explains.
Though 26 states sued to overturn the Medicaid expansion, the feds are kicking in most of the new money for it -- by the Kaiser Foundation’s estimate, about 95% of the new expenditures between 2014 and 2019. So it's not like the states had much to lose, at least in the medium term.
But as the feds pull back and utilization increases, over time all states will probably see their Medicaid expenditures rise.