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States Push Back Against Federal Medicaid Decisions

by Precise Leads

November 14, 2016

Arizona and Ohio have repeatedly tried to limit the expansion of Medicaid, only to be shut down by federal courts. Why won't these states take no for an answer?

As the current election cycle has clearly demonstrated, there are big differences in the major parties’ approaches to healthcare. While Hillary Clinton had planned to uphold and expand Obama’s Affordable Care Act (ACA), President-Elect Donald Trump has repeatedly promised to repeal it.

These differences not only apply at the federal level. While 31 states and Washington D.C. have accepted federal funding for Medicaid expansion under the ACA, 19 states remain resistant — largely influenced by Republican Governors and state Legislators.

The Battle Over Eligibility Requirements

Even states that have accepted ACA funding for Medicaid continue to resist its expansion. Arizona and Ohio recently filed separate requests to adopt strict eligibility requirements for their Medicaid programs. In particular, Arizona petitioned to make employment a necessary condition for health insurance, and Ohio hoped to drop beneficiaries who don't pay into a health savings account.

Proposals like these are sent to the Centers for Medicare & Medicaid Services (CMS), a federal agency that has historically refused similar requests. Since the passing of the ACA, CMS has turned down all waiver requests to impose work requirements and time limits for Medicaid, along with those that deny essential provisions like freedom of choice for family planning. According to CMS’s acting administrator Andy Slavitt, these proposed regulations threaten to "undermine access to care and do not support the objectives of the program."

If CMS has consistently turned down these proposals, why have Arizona and Ohio persisted with their proposals?

Ideological Opposition

According to Arizona state Sen. Nancy Barto, an advocate for the state’s strict eligibility requirements, one of the main reasons for the proposal is the "serious problem of welfare benefits becoming an incentive not to work." This ideological opposition to expanding Medicaid is one of the main components of the widespread resistance to the ACA, but it isn’t the only one.

The Arizona Daily Sun’s Christina A. Cassidy claims that the “cost of expanding Medicaid under President Barack Obama's health care overhaul is rising faster than expected in many states, causing budget anxieties and political misgivings.”

Cassidy argues that the number of Medicaid applicants, paired with more relaxed eligibility requirements and rising drug prices, have put a significant strain on the budgets of states like Arizona, and this has led to widespread resistance of continued expansion under the ACA. She cites a CMS report to Congress that lists the cost of expansion at $6,366 per person in 2015, which is 49% higher than anticipated.

The Future of Medicaid

While states with Republican leadership may continue to submit requests to limit Medicaid coverage for the unemployed and the poor, these requests will continue to be denied (barring any major changes to the CMS). ACA premiums may be in flux, but Medicaid expansion will continue to include coverage for the unemployed.

Of course, decisions at the federal level may completely alter the current course of healthcare — and as Trump prepares to take the presidency, all eyes will be on the future of state healthcare reform.

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