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A possible problem repealing Obamacare

By March 3, 2017December 22nd, 2022No Comments

With the new Administration in the White House there has been a call by many when it comes to repealing Obamacare. Our nation’s healthcare law that was enacted in 2010 which is better known as the Affordable Care Act (ACA).

On the surface, it may seem simple to roll back any legislation that has been passed, but with this law things are somewhat more complicated and one of the lesser advertised reasons that is complicating things is how the ACA expanded Medicaid.

Under the ACA individual states had the opportunity to accept an expansion of Medicaid from the federal government. This expansion calls for the costs of each state’s Medicaid program to be covered in full by the federal government during the first three years of the program and after the initial three year period each state then had or has the opportunity to receive close to 90 percent funding of Medicaid costs.

One of the caveats of accepting the expansion was that each state had to be a little more lenient on the qualifications of who can enter the program, which is one of the main reasons why some states who accepted the expansion terminated the asset test.

Due to the requirements becoming less stringent enrollment into Medicaid increased by 37 percent nationwide from 2013 to 2016.

For the 35 states that accepted the expansion, on average (data is, currently, not available for Connecticut), enrollment increased by 38 percent into Medicaid. In states such as Utah, Vermont and Delaware the increase in new enrollment has been under 10 percent while states like Kentucky, Colorado and Nevada have experienced over 75 percent increases.

In terms of overall costs, California in 2012 paid out roughly $50 billion in Medicaid and by 2015, according to the Kaiser Family Foundation, that number increased to over $85 billion.

The remaining 16 states that did not accept the expansion (data is, currently, not available for Maine) experienced just over a 12.5 percent increase in enrollment with the largest increases, over 26 percent, being in Louisiana and North Carolina.

With the repeal of the ACA the states that opted for the expansion may just find themselves in a position of where they will not be able to fund the total costs of Medicaid, unless of course any new legislation considers these increases in enrollment as well as increases in costs.

With the promise of funding from the federal government possibly coming off the table, the states that accepted the expansion may be firmly against any new legislation that puts their budgets in jeopardy.

The ACA, ultimately, placed the states that accepted the expansion into what is known as “golden handcuffs” as these states would, now, have to rely on the federal government to meet their budgets when it comes to Medicaid health costs.

A repeal of the current law may just place these states in utter turmoil as many of them, like California, may not be prepared to handle the costs of Medicaid due to increased enrollment.

A breakdown of the states, according to Obamacare Facts, that did and did not accept the Medicaid expansion and the percentage of increase in enrollment from 2013 to 2016:

The increases in new Medicaid subscribers with Obamacare

States accepting Medicaid Expansion and the increase in new subscribers

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