Medicaid Expansion: Texas Refuses to Take the Bait

February 20, 2014

Texas isn’t alone in refusing to take the bait that is Medicaid expansion.

Go here to access the interactive version of this map. Medicaid Expansion States1 Medicaid Expansion: Texas Refuses to Take the Bait

Medicaid under PPACA is expected to expand greatly in 2014, adding an estimated 17 million more individuals to its rolls. All individuals below 133% of the federal poverty level—approximately $30,000 for a family of four—will be eligible for Medicaid. This expansion puts even greater pressure on already strapped state budgets. So, to encour-age participation in the expansion, the federal government offered states a carrot. It will pick up 100% of the cost of “newly-eligible” Medicaid participants for 3 years and up to 90% of the costs after 2020. However, the federal government tied their carrot to a giant stick. Any state that refused to expand would not only be ineligible for the new Medicaid funding, but would lose all Medicaid funding.

Twenty-six states challenged this threat. Previously and most famously in the case South Dakota v. Dole, the Supreme Court ruled that a point existed where Congress’ funding threats would become so large as to be coercive. With the PPACA ruling, the Court found a spending program from Congress to be coercive for the first time in modern American jurisprudence. Under the original act, the states had no functional choice but to follow the federal government’s wishes. Losing billions in federal funding would force any state to participate, and thus the Chief Justice’s opinion described the situation as a “gun to the head” of states forcing compliance. The federal government, according to the Court, cannot condition previous Medicaid funding on expansion. As a result, states now have an option whether to expand. The Supreme Court’s ruling on the constitutionality of PPACA recognizes that a limit to Congress’ spending power does exist. The ruling gives states the option to expand their Medicaid population in 2014 without being punished by losing all Medicaid funding. States must now decide whether to cooperate with the federal government in expanding a broken, costly system.

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